1k people getting 1k a month for 5 years = $60 million. At the end of the day, an expensive group. Really impressed by the ambition here, and hope for great success for the project.
Basic Income research will be vital in the future when it actually becomes a genuine piece of public policy. Although I have little faith it will be used effectively by politicians/decision makers.
impressive, but i feel like this is why we invented computer models and have technology (maybe) to start returning immediate results.
We're basically saying here that $60M (plus the other group) is better spent to see what weights to give to models to see how UBI scales-up rather than spending it to run a full gamut of Test Cases through the models and figuring out which outputs to motivate people to do with the money.
I mean, why are we spending money to figure out what people will spend the money on when we can already envision all the possibilities. Or am i wrong, and no one has modeled this yet??
How do you model a population's (or even am individual's) innate preferences and behavior when their income patterns and ability to spend change? You're essentially describing the economic calculation problem.
Sorry for being negative but as someone who is paid for desingning and conducting experiments I have to say that this experiment is very poorly designed. (Many of the flaws have been discussed here and at previous occasions, no need to repeat them.) The fact that they are spending $60M on this makes me sad. So much great research could be funded with this kind of money.
1,000 will receive $1,000 per month for up to 5 years
What does this mean? Is it going to be 5 years or not? Will different participants get it for a different amount of time? Will they know when it is going to stop?
That’s a hugely important piece of information. Granted, if it is assured for any length of time it’s practically much more assured than the usual job.
I hope many of the study participants are living in a low COL area. If the $1000 per month covers most if not all of your expenses it gives someone a much greater opportunity to pursue something the can really improve their life rather than just a nice boon on top of their current income. Of course, this is more of an "I hope this improves peoples' lives" rather than considering how best to design the experiment.
this is not a question.
i know there are tons of those that say no to basic income (just glance the comments here), yet if i was eligible (different country) i would have applied right away and quit my job.
i have a few side projects and some of them just weeks and months away from release, i could return the money with interest if things go as planned (maybe a contract). banks are aggressive, i can not ask my family, kickstarter and similar are too visible, ventures are so noisy and my goals and the respect for the people in general not aligned with them. this would be ideal because it is quite relaxed. here you go, an ideal setup!
We tentatively plan to randomly select 3,000 individuals across two US states to participate in the study: 1,000 will receive $1,000 per month for up to 5 years, and 2,000 will receive $50 per month and serve as a control group for comparison.
So obvious question on many minds, "Where do I sign up for the free money?"
Also, will it be randomly selected or will the selection criteria factor in cost of living, current financial situation, education, etc?
And where is the potentially $66 million dollars for this coming from?
EDIT: On their FAQ[1] I found the answer to my first question:
> Can I be a study participant?
Unfortunately, no. It is important that participants are randomly selected into the study.
It's not clear (to me at least...) if the randomness applies to choosing the original 3000 people selected to take part in the study, the bucketizing of them afterwards into 1000/2000 groups, or both.
YC probably has the contacts to find $66m of philanthropic cash. Though if you wanted to find out whether UBI is a functional improvement on current systems as opposed to whether people like receiving free money from the SV elite, you'd need to test the funding system by raising taxes by much more than $1k per month on all the higher income recipients and eliminating most govt benefits for the lower income recipients. Of course, you might find fewer people willing to participate in the study then.
I would speculate yes. (1) You want subjects in the control group to be incentivized to maintain contact with the researchers throughout the study and be willing to spend time answering their questions. (2) Whenever feasible, you want all subjects in a research study to be better off than not participating in the study. (3) It also controls for some minor confounding effects like "gets in the habit of going to the bank monthly and cashing a check".
I wonder if it has anything to do with the $600 1099 floor.
Staying below that might encourage under-reporting on taxes; staying above that gives the researchers pretty reliable addresses and SSNs from participants.
Economists largely consider payments like this to be the best way to enact policies. It gives people more options instead of trying to control through legal pressures.
Economists largely consider payments like this to be the best way to enact policies. It gives people more options instead of trying to control through legal pressures.
Many economists would agree that, ceteris paribus, cash is "better" than an equivalent amount of earmarked money in most situations, because cash is more flexible. But that's a very narrow statement that isn't applicable here, because it's assuming that the set of people receiving the money would be the exact same (it's not, by the definition of "universal"), and it's also assuming that there are no other external consequences to the proposal (another topic which is, at best, debatable). So even that point of agreement among economists isn't relevant to this proposal.
The way that question was worded was a straw man. I’m referring to a general principle regarding transfer payments. They’re usually more simple ways to reach a desired outcome than alternatives.
Yes, and I'm explaining that that statement isn't true (in the sense of consensus among economists) in any way that is applicable to public policies. Certainly not this one, because that's explicitly not a dichotomy being proposed - there's no tradeoff being proposed between the $1000 stipend and all of the other forms of public assistance that the participants could be or are receiving.
It's only true (in the sense of consensus) on a micro level, looking at the value to an individual of cash vs. in-kind payments, ignoring secondary factors, ignoring externalities, and ignoring positive or negative feedback. That's not a relevant framework when discussing public policy.
Two thoughts: I'm nearly positive that basic income means _part of_ "your income", and not "your income".
The intent of basic income I have read about is to increase the personal freedom and provide a flexible safety net for the poorest individuals. And for personal freedom I'm guessing you can take or leave the basic income -- but none will because it's money right?
And about your second thought, you could use evidence for politicians elected based on their promises to raise or lower taxes -- which is essentially an income increase or reduction (for various income subsets of the population).
The freedom is freedom from immediate starvation. Rather than be forced to work a crappy job just so you can eat, you have more freedom to pick and choose your employment, spend time on education, work on art, or whatever.
Is everyone currently clamoring to elect politicians that want to increase welfare and other "Great Society" programs?
People aren't clamoring to increase welfare because the people whom it's perceived to benefit aren't the ones who actually have the largest voting power.
People absolutely do reward politicians for securing funding for their constituents, usually in the form of earmarks, targeted tax breaks (e.g. disaster relief, geographically targeted bailouts), and stipends. In fact, it's one of the strongest predictors of support for politicians representing smaller districts.
Only at the national level (ie, when running for president) does it become problematic to be perceived as having spent Congressional funds on your own district, because the new constituency includes people who had their money "taken away" in order to provide those earmarks.
I don't think richer people would think that the government giving $1000 a month to everyone would see that as benefitting themselves, there's your opposition to increasing BI or having it at all. And I don't disagree with those last two points.
I don't think richer people would think that the government giving $1000 a month to everyone would see that as benefitting themselves, there's your opposition to increasing BI or having it at all.
Huh? No, the point isn't what the richest people would think - they have an incentive to oppose either welfare or cash handouts. The point is that currently, welfare only targets the people with the lowest voting power, because they're both a very small bloc and also a bloc that doesn't vote very consistently in the first place. So there isn't a huge political incentive to increasing welfare.
As soon as you make that a handout that targets everyone (or appears to target everyone), you've suddenly put the largest voting bloc - those who are neither very wealthy nor on welfare - in a position where they will start to clamor to increase it more and more, because they'll see that as money flowing towards themselves.
Also I don't think it's hard to see how this thought would come about (not saying I'm advocating it). But there are plenty of ideas that would help society in general (lower college tuition) that many Americans are against whether rationally or irrationally.
If you fail to see how the American public would have a negative reaction to some kind of redistribution of wealth I think you should think about the average American's reaction to the idea of a socialist politician.
If you fail to see how the American public would have a negative reaction to some kind of redistribution of wealth I think you should think about the average American's reaction to the idea of a socialist politician.
That's not it - I'm not saying that the American public wouldn't have a negative reaction to "redistribution of wealth". I'm saying that the American public has a negative reaction to "redistribution of wealth" when they don't think it benefits them. In other words, they're generally fine with wealth being redistributed from other people to them, which is most evidenced by people of all income levels usually (though not always) being on board with federal money coming in to their district. This generally takes the form of federally-funded infrastructure projects or targeted subsidies.
I'm using that to explain why people in between welfare-level poverty and comfortable wealth would have a different reaction to a stipend that (they think) is coming out of other people's tax dollars than they would to current welfare programs (which [as they perceive] don't benefit them).
You're still free to seek out other sources of income under these models and the amount recieved from the government effectively decreases as income is raised due to taxes you pay into the system.
Wouldn't any politician campaigning on this automatically get elected?
No, lay people would be quick to confuse this with communism. The irony of it is that this sort of a system was one of the few things Keynes and Friedman agreed should be part of public policy.
The irony of it is that this sort of a system was one of the few things Keynes and Friedman agreed should be part of public policy.
Milton Friedman did not say that this should be part of public policy, though his words are commonly interpreted very generously to imply that he did, by people who wish to demonstrate that this is a policy with "conservative support".
What Friedman actually said is that the cash value of all welfare and other support systems is greater than the in-kind value. That's a pretty narrow statement. In theory, that sounds like it's a statement of support, but it's really not. In practice, basically nobody is actually proposing doing away with all welfare, social security, government subsidies, etc., because it would be a political non-starter. Even if we scope this discussion to the context of the YC research experiment, that's plainly evident, because there's no stipulation that the participants abstain from all other forms of public assistance, as well as deduct the cash value of every other stipend and subsidy that they receive from the $1000 payment.
Comparing what Freidman wrote about to this proposal is like trying to discuss Adam Smith in the context of the political left, on the basis of the common term "liberal". Yes, there technically exists a frame of reference in which that's a meaningful comparison, but it's not a particularly useful or relevant frame of reference, and it does nothing but mislead and obfuscate the actual details of the underlying facts.
At the point where they start to put back the conditions we have around welfare today. Or at the point they start to treat us the same way employers treat us today.
Sure, for a time, it may become impossible to have a runaway defense budget, might even indirectly make going to war less appetizing, certainly would decrease petty crime and the expense that comes with this.
Wow. Looks like they'll spend a lot of money for this research. Congrats to everyone involved!
I thought basic income was about a time where AI would take most of the jobs, and everything would be far cheaper thanks to automation. I cannot understand how it'll help you not work in the current world.
Because working part-time might not be an option for many, even if they are ready to forgo the money. We also have not built that automated world yet, so although $1000/m certainly helps, it is still not enough to pay for a comfortable life in the US.
Maybe someone more informed on the subject can enlighten me.
For what I know, basic income is not about allowing people to not work, but instead, push people to work by allowing them to take risks by trying to work in a field they actually want to work.
Starting this wood-carving artisanat shop that you're insanely good at looks a lot more promising when you know you'll have a bit of money to eat at the end of the month :D
A huge hope of defensors of basic income is that it may pay itself by the economy boost it gives, and won't just add $1000 to every rent bill in the area !
Because it is not meant to "help you not work." It is meant to ensure a basic minimum whether you work or not. It is also not meant to "pay for a comfortable life." It is meant to prevent you from starving.
For the sake of argument, however, as you say, going part time is not an option for many people. For the lowest paid jobs, on the other hand, going full time is often not an option. The jobs at the bottom tend to be part time with no benefits and no guaranteed hours. These are the people who will be most benefited by a basic income. If they are additionally stuck in a hostile work environment, the basic income may give them enough cushion to quit the job rather than hanging on just so they don't starve. It may also give them enough money to take time off work and go to school in order to earn a slightly better income. And, if they are laid off through no fault of their own, it may allow them to eat until they can find another job.
The effective tax rate an individual would face depends on how much income an individual derives from other sources during this time in addition to the basic income, along with their household demographics (number of children, marriage situation).
By itself with no other income sources the individual would fall below the US federal poverty level[0] by $60 and would likely qualify for some Earned Income Credits[1] as well as subsidized health care.
Adding children or a spouse (especially a working one) will crank the tax rate up or down.
Then there is an entire universe of tax complexity having to do with credits and penalties an individual or family might face.
Basic income is not the same as forced equality. I do fear that basic income will only result in hyperinflation, but it's hard to effectively estimate the impact without actually doing some trial run.
Really awesome to see this coming together. 2 q's - how was the $1,000 per month figure calculated, and will you be deploying in a small, low-income, isolated community where local inflation might occur, a large metropolitan community, distributed randomly across the 2 states? Interesting problems to consider in this study design!
Found the answer to my sampling question: "As described above, we will select areas for the study by taking a stratified random sample of Census tracts in large regions within the two states where median household income does not exceed the area median income. After sampling tracts, we will randomly select addresses within tracts from USPS DSF (a sampling frame of all addresses). We will screen selected addresses for eligibility, ultimately enrolling no more than one percent of individuals within a Census tract. We may use available administrative data eliminate as many ineligible households from the sampling frame as possible to cut down on recruitment and enrollment costs, but we are examining the reliability of this data during the pilot. We are contracting with a survey research firm with extensive experience fielding national studies to assist with sampling, manage recruitment, and conduct in- person enrollment and baseline surveys."
To my thinking it would have been interesting to study the possible inflation effects (treat the isolated community as representative for the whole country) but I'm sure there is a good reason/past research for structuring the sample this way.
You know this might be speculative, but I feel like a basic income applied to a national allows that population to act more like an ant hive. In the sense that only 3% of the population is actually doing the real hard work, but this is a healthy paradigm, and is much better than forcing individuals who shouldn't be doing the work they currently are to pursue things they actually care about, such as taking care of loved ones, or some creative pursuit. Jobs such as these don't pay much, but are equally valuable to society.
Much better than, say, working the TSA, a jobs program based on invading privacy under the ridiculous exaggerated thread of terrorism. I WISH those people would just stay home and play video games.
Maybe more twitch streaming, or more elite gaming as a result? I find that whole economy rather strange but then I remember that a lot of "work" these days is just shuffling imaginary money around.
Maybe for a year. Then people will want meaning in their lives and would seek meaningful productive things to do that they want to do.
The reason people right now love gaming so much and often to an unhealthy degree is because its an escape from a life they don't like living but have no choice in because they are chained to a job to survive.
Yeah, for a lot of people living in Azeroth is still going to be more fun than living off 12k a year. Entertainment is made to be addictive, none of those dynamics you are talking about are going to change.
I would speculate that any end date on this scenario will invalidate results. What a person does if it is guaranteed a job for life vs 5 years is wildly different, as you'll need to make sure when those 5 years are up, you'll be ready to enter the job market again, etc. I believe the same will happen with basic income. If we want to study where people gravitate to more fulfilling jobs, feel happier and so on, you need to guarantee them that stability forever. Otherwise people will just rationalize that they got some free money for a while and will not behave in the same way.
If the government guarantees a basic income, you're really only guaranteed (at best) until the next election cycle. Just recently, seven years after its passing, the ACA was nearly reverted, which would have kicked millions of people off government-subsidized health insurance plans.
That's why I have approximately 0 faith in the pension plan my government(s) have in place. I'll save for my own retirement so I'm not high and dry when they mismanage the funds or change policies or whatever.
While it is less likely, nothing is guaranteed. You assume your investments will be around until you cash them out for retirement, and they are all dependant on something not failing:
* Direct stock ownership depends on the company growing, not failing, not being bought out, etc.
* Mutual funds depend on the fund manager not going under / properly managing assets.
* Bonds depend on state institutions honoring them.
* You can't really save for retirement in a bank because their rates of return are below inflation. You lose money in banks.
* Hoarding fiat is obviously bad.
* Any asset you would try to store long term is subject to market volatility at the least and potential obsolescence at the worst. You simply cannot guess what anything will be worth decades from now.
The current US administration knows full well that throwing tens of millions of people off insurance will probably cost them the disenfranchised working class that elected them in the first place and lose them their majorities in congress and the presidency. I fully expect them to stab themselves in the foot with this, since a lot of monied interests benefit from the absurdly inefficient default state of healthcare where many people depend on emergency rooms for all problems, but in the same vein repealing social security would destroy their voting base unless they made it a grandfathered in shutdown where the next Democratic administration could just reinstate it and nobody on benefits would lose benefits.
Mutual funds depend on the fund manager not going under / properly managing assets.
Err, no. This is not a risk of properly structured mutual funds. The manager does not directly hold assets - they make decisions about what to do with the assets, which the custodian executes. And the fund's management has no recourse to the assets held by the custodian. How the fund goes under is if the assets they hold go to zero value.
There's still execution risk, though, which is why passive management is ideal. I'm pretty sure VTSAX can successfully hold a market-cap weighted mix of the 3600 largest US firms pretty much indefinitely. The risk is that the largest US firms stop being generally profitable, like what happened in Japan.
In the case of BI, I disagree. Politicians will see this for what it really is -- the most direct way to buy votes (by promising increased BI). It would be quite popular with both parties, I'm sure.
If we're living in a world where BI is a reality, it will be embraced. Once social programs are implemented, they're nearly impossible to remove -- see ObamaCare. Republicans have given up on going back to the old system and have, well, embraced a tweaked ObamaCare under a new name. They'd do the same with BI.
"Democrats promising $30K BI? Well we're gonna do $35K!"
This is circular logic. In order for BI to become a reality, it first must be embraced. In order for BI to be embraced, it must first be a world where BI is a reality.
The argument from the parent posts rely on ACA being repealed already. If the ACA does get repealed then the above arguments hold but this hasn't happened yet.
BI is the opposite of socialism when it's coupled with dismantling certain pieces of the social safety net. We don't need WIC or CHIP if we have universal BI, for example.
Even if we guarantee some sort of income floor, there will still be those who, despite that guarantee, need additional assistance. Whether it's because they have more children than the average, are irresponsible with spending, are victim to a drug habit, unexpectedly lose their jobs, or succumb to medical debt, we have to come to grips with the idea that UBI won't be a cure-all.
Even if we acknowledge (and not all will) that most people who are dependent on safety-net assistance are perfectly good and responsible, depending on what the amount is, what their life circumstances are, and a myriad other factors, I don't think we can take it for granted that UBI obviates those specific-purpose programs for the remainder of those who need assistance and for whom UBI is not ideal.
Put bluntly, there are people who will take the entirety of their UBI check and spend it on stupid things, and end up without money for food, or for their childrens' health. What are we to do about them?
Yes, BI involves dismantling certain pieces of the social safety net to replace it with a social safety net. The party that opposes wealth redistribution will oppose BI.
I think you're confusing the GOP's motivations and their rhetoric. See also: their failure to repeal the ACA despite having the presidency and a majority in both houses.
That's because the GOP isn't a party, it's a coalition of bickering factions that has chosen to prioritize winning over purity. (As opposed to Democrats, who prioritize purity over winning.)
How would this work? As I understand it pensions are almost never fully funded when they begin because the costs would be prohibitive. Can a smart contract guarantee that funds that are not available now will be made available at a later date?
It wouldn't work, almost nothing people want to do with smart contract can actually work because those people tend not to actually understand what a smart contract is or what it can actually do and what it can't do. Virtually every smart contract proposal is DOA due to a misunderstanding of their nature.
I didn't need to, the comment I replied to already addressed a valid why. Smart contracts can't enforce access to funds without locking the funds up from other use, and that's not how things work in the real world. Pensions aren't savings accounts where funds are locked up ready to be used in a black box. They can't interact with the real world without trusted oracles, but we already have that in the real world and they're only real use is when they can do something deterministic on chain. In short, they're largely hype without a real problem to solve... so far.
You're just claiming it's impractical today, not technically infeasible for any reason.
1. Pensions don't currently work like this
There are many thousands of different pension systems across the world.
It stands to reason that you could create new system, and if it had significantly attractive advantages, people would use it.
2. Trusted oracles are a problem
Yup, we need more decentralized services that smart contracts can take advantage of. Wait a few years, they're coming.
3. Smart contracts are only useful for deterministic changes
Making deterministic change is precisely what you want. Do you mean statically defined? Because that's obviously not correct. And are you considering a new system specifically designed for pensions?
Virtually all innovative technology is "hype" until it isn't. I agree we have a ways to go.
To the extent they are funded, that money could never be rescinded. And you could negotiate early funding as a feature now, because it would actually mean something to the recipients. There are no untrustworthy promises required.
And you could do new things based on control of your pension, which might radically change how we think of them.
The main thing that smart contracts remove is the need for trust. And that's the main problem with pensions.
It's not completely private if bureaucrats tell you what you can or cannot do with it, as well as when you may do it, stealing from you if you step outside of their rules.
Completely private accounts are called savings accounts; governments aren't telling you what to do with your money, they're telling you what you have to do in order to avoid that money being taxed, IRA's offer you a benefit, that benefit isn't without strings. Smart contracts offer nothing here you can't already do easier.
Using a broad definition of theft merely serves to raise the noise floor. Your definition of "completely private" seems like "free markets" or "perfect competition": that is, things which are free from government interference only in misanthropic delusions. As Jefferson explained, stable ownership is not a natural concept; that you are considered to "own" things absent direct physical possession is a function of society. We also collectively agree to believe in this thing called 'money', which is also not an inherent property of mankind. That society can dictate rights and rules about property is inherent to the concept of each.
The "smart contract" is still reacting to things in the real world. It's not going to magically cause the stock market to not fail. And, as we've seen, they are vulnerable to hacking.
That's... that's not really true. For one, we've already seen how these "smart contracts" can be hacked. I can almost guarantee that they will put something in them that will allow them to take the stuff back.
And that hasn't really explained how the funding would be there.
Actually, the fact that it hasn't been unrolled completely yet without backlash is a testament to how angry people are when you try to take their protections away.
If you’re attempting to study how a Basic Income would affect its recipients, then yes. It is terrible. It completely skews the behavior of the recipient in a way that a lifetime BI would not.
Absolutely, and this is also the problem with every* other basic income study that's been conducted over the past few decades.
If you promise basic income for only 5 years, then I'm probably not going to quit my job and become an artist because I can't be unemployed for 5 years and expect to waltz back into a job. If you promise basic income "forever", then I'm far more likely to retire at 30 and plan to never work again.
* I believe this is the case, correct me if there are any I missed
Would you not work? Basic income is nearly not enough to access luxuries. Sure you should be able to live off it, but I think most people would likely want more, the difference from forced equality being that you can still work and keep that as luxury money.
Would they, though? That's the key question that I believe this study (and others like it) fail to address. Depending on the basic income amount, I believe it would be possible to live a fulfilling (if somewhat minimalist) life without needing to supplement that income.
I would want more. Currently I don't really care what I buy at supermarkets, I can go on 2 week holidays and potentially buy gadgets I like. However I can't really afford a car or buy a home or fancy synthesizers.
With BI I could spend more, but I would still keep on working towards a relaxing financial freedom where money is not a problem at all.
Besides a few monks, everyone I've met that makes under $20k/yr wants more. I've never seen a real area where people are comfortable until the $40k/yr mark. Yeah, I know there are exceptions (there's always outliers in data, but you can still find means and trends). So I am confident you wouldn't see a significant difference in number of workers unless you brought that UBI level up by several times the proposed $1k/mo.
I never understood that point. Almost everyone I know works fulltime although they could live a "fulfilling (if somewhat minimalist) life" on maybe 15h/week of work. If minimizing work would be a goal, most people would be able to do it right now.
Yes, this requires employer flexibility and the move from 40h->15h per week grants much less freedom than stopping work entirely but masses of people suddenly being content with a minimum amount of money does not sound convincing to me at all.
Haven't most studies around UBI shown that the only people that usually don't work when given a UBI are students and mothers (so they can focus on school and their children, respectively)?
Living off the basics is pretty dull. Most people who live ascetic lifestyles by choice usually come from a position of relative wealth and choose it more as an aesthetic or affectation than anything.
I think there are plenty of people who would be happy having a minimalist life, and there are those who would choose to see the world. And I believe that there are those who are drawn to doing things; working on stuff that they're interested in. And there are those who do want more stuff, and so will work.
All in all, I think there are enough people that things would be fine.
I agree. I think a lot would move to affordable places where that guaranteed income goes a lot further. If that's true then we aren't going to be as competitive on a global scale. Maybe that's not a big deal, maybe it's a huge deal; I don't know.
Anecdotally my friend is part Native-American and gets 4k/mo from the tribe's casino money and they're bumping it up more soon. She's chosen to be a stay at home mom.
The question really isn't whether someone person on Hacker News would want to work.
A better question would be, "how many would report their work out of an entire country was offered a basic income?" There are already data points for comparison, when that question is asked.
Most people on Hacker News are really not any different from anyone else in their country - they're just in a different line of work. The idea that you're a better/more moral person if you get paid more is a fallacy.
An interesting question is "can we reasonably automate things that people currently get paid less for than a basic income would be, or will we have to pay them more, and if we have to pay them more, what will be the economic effect of that?"
>Most people on Hacker News are really not any different from anyone else in their country - they're just in a different line of work. The idea that you're a better/more moral person if you get paid more is a fallacy.
People on HN are significantly different and not even close to a representative sample. No one at any point is saying that HN readers are better or more moral, but there are huge, huge differences in technical skill, intelligence, knowledge, college attendance rates, social skills, empathy, and so forth compared to an average sampling of the population of the United States. I'll leave it up to everyone to decide which direction the arrow points in the above fields.
This is the problem with a lot of economic reasoning. The 'rational actor' construct works in toy models, but is much less useful in reality.
I took a couple years off a long time ago. I didn't stop working on stuff. Really, if you pay me, all that means is that I work on what you want me to work on, and maybe show up at particular times. It doesn't motivate me to work, it just motivates me to change topics.
I absolutely know people who would never work again. I know other people like me, who do it because they enjoy it. And details matter a lot, and tend to be ignored[1] by simplistic first-principle reasoning.
A big part of this is the ratio of those, and how quickly the number of jobs drop. I would fully expect this sort of thing to need tuning as it goes - I personally see the biggest change being a sudden explosion of people with lots of free time. Just as a tiny example, what does this do to the video game market? What about dry cleaners when fewer people wear business-drag?
Anyone who makes confident predictions based on econ101-style reasoning is simply dressing their politics up in an argument from authority.
[1] What does assortive mating look like under such a scheme - how much status will holding a job gain? Is the income set at an "uncomfortable" level, how will that change over time, what sort of barriers (class, academic, opportunities, etc.) will grow up around it? Are there any incentives to do something useful, even if it isn't what we think of as a 'job'?
being time limited it gives you an actual hard value, so it becomes negotiable. I wonder if anyone will instead just use that to negotiate some credit at a favorable rate (say, 50k for those 60k) and actually start something greater than the expected subsistence.
Generally speaking, this would probably be the most efficient use of UBI: you trade it all away as soon as you exit college and invest it in something. I can see whole branches of financial and life insurance services growing out of this market.
Idea: what if they could hide from the recipients how long the program will take, while guaranteeing they'll get two years advance warning? Then for the first three years we might get something more representative of behavior on indefinite BI.
I do realize that by this point this would be hard to hide.
The whole point about Basic Income (at least the unconditionally one) is that there are not going to be any jobs (or very few and only for highly talented people). And even if there are jobs it will always be worthwhile working (as long as it's unconditional)
So if you, like me, believe that's the case, the whole discussion about whether people want to take a job or not becomes moot. It doesn't matter if they would have, they can't.
A much more important discussion then becomes how we make it work financially.
The whole point about Basic Income (at least the unconditional ly one) is that there are not going to be any jobs (or very few and only for highly talented people).
If there are no jobs, it will be because we designed it that way, not because it was inevitable. Tech giants proposing basic income as the solution to their lazy lack of desire to figure out how to better distribute work tell glowing stories of how lovely it will be for low paid workers to get this extra money. They never actually explore the scenario they are actually proposing that all you get is $10k-$20k and you have little or no hope of getting a job at all ever again.
That would be a dystopian nightmare and I think it is likely to end in bloody revolution.
Lots of hopeless people with nothing but time on their hands who are being completely fucked over by the system with no way out of this black hole but just enough money to keep eating well, even if they are living in a tent, sounds like a recipe for creating a well trained guerrilla army.
Technology isn't inevitable but to the extent that we wan't to reap the benefits of it is. In other word, we aren't designing anything other than our own replacements.
With regards to how SV tries to paint it thats a different discussion and have nothing to do with whether it will happen or not.
It doesn't have to be dystopian (ex. Post scarcity society) but until we get there it's going to be worse not better for a lot of people.
But I would challenge you to come up with an alternative that by and large at least compete with the reliance on technology.
The problem is that no specific part of the whole system is responsible and everyone in the system is more or less acting rationally.
So I fundamentally disagree it's not inevitable (with the above context considered)
But I would challenge you to come up with an alternative
Actually, I have. I was homeless for nearly six years until earlier this month. I am medically handicapped and can't work a regular job. I was a homemaker for a lot of years, I had a corporate job for a few years and I currently do freelance writing, resume editing and I blog, which gets me a little money via ads, tips and Patreon.
UBI will solve nothing as long as we do not have universal basic health care and affordable housing. If we establish universal basic health care and create sufficient affordable housing, then the last piece of the puzzle is redistributing work. We did this once before under very similar circumstances where automation was "taking our jobs."
It was called The Industrial Revolution. It gave birth to the 40 hour work week, overtime pay and unions.
If work is structured properly and you can get a cheap SRO or similar somewhere and not have to worry about medical bills, you can cover your basic living expenses working part time. If it is well structured where you work as little or as much as you want, then people who are unambitious hedonists or who have personal burdens, like chronic health issues, can just get by without it being a dystopian horrifying black hole that seems inescapable. Folks with more energy and/or more ambition can work harder and do more with their lives.
I have written a number of pieces laying out the details. Some are listed on this page of my old blog:
You are assuming an awful lot of things about me. Why would I challenge you if I wasn't intersted in what you had to say?
You completely ignore that there is no need to structure work if I don't have to hire people to produce or develop my products. This is the whole point and why I believe you are fundamentally looking at this wrong.
The industrial revolution replaced physical work, this revolution is replacing intellectual work.
You are betting on some political/ideological/moral change in people, not actually addressing the points I was making.
And, yet, your out of hand dismissal fits very well with my assumption that you aren't actually interested in hearing a solution other than UBI.
I am not betting on a political, ideological or moral change. Whether we establish a UBI or go with something akin to my above proposals, these are equally political solutions. Neither will happen without a great many people working to make it happen.
The only question is what kind of future do we want? I think UBI makes no sense and will not work. Universal basic health care would be vastly easier to implement, if only because it has already be done in multiple other countries, so we have models to borrow from. Yet, people think that is a bridge too far and will not happen.
So, to me, the good news is that UBI is unlikely to happen and Gig Work is already on the rise, such as Uber, writing services and delivery services. The challenge here is just getting the word out that such services need to be a win-win scenario for both company and workers.
I am already living this reality. Gig Work has been an ideal solution in the face of a medical situation that makes a normal job not work for me. So, I know firsthand that Gig Work can be a terrific option for the worker if it isn't designed to screw over the little guy.
That can totally coexist alongside factories with very few workers. The rise of the machines does not have to be a terrible thing for humanity. The Industrial Revolution raised standards of living and quality of life across the board. There is no reason The Second Industrial Revolution cannot do the same.
But we do need to set that as a goal and work towards it. My only real concern is that, currently, some very rich and powerful people do not see the 99 percent as actual human beings. They see them as sheeple. And the solutions that grow out of such contempt tend to be self fulfilling prophesies that force powerless people into the narrative imposed on them from high.
I am intersted in hearing actual solutions not wishful thinking based on the idea that humans decide themselves when we obviously don't.
If you want to argue that then I have already asked you how that would happen given the reality we live in.
Gig-work will also be replaced by technology either through digitalization or automation.
95% of jobs created since 2010 are temp jobs i.e. part of the gig-economy, that's obviously not sustainable as there isn't any rise in salaries while as I said the cost of living is rising.
So again unless you believe that technology is not going to take the jobs
I agree with you that tech giants promoting basic income are probably only doing that as an easy and attractive answer to - what will happen to all the jobs?
However, I really don't think UBI is the answer. I don't understand where the money will come from/who will do the leftover work. I think we should continue to cultivate an innovative society and new types of jobs - more appealing I think - will be created.
People that rich are used to solving certain things by whipping out their checkbook (so to speak). It may be superficially well meaning, but, no, I don't think UBI actually works. If they manage to get a UBI instituted, I think that is a case of the road to hell is paved with good intentions. But, the odds seem pretty long against it being instituted in this country at all. So, that makes me feel it is mere posturing.
I do a lot of "light one candle rather than curse the dark" type projects. I try to promote things that already exist (like gig work) that I think work. I do my best to get such info into the hands of people who seem hardest hit by the societal growing pains we are witnessing.
It can be hard to measure the results of such efforts and it can be outright impossible to prove to others that it makes a difference. But, I have had experiences* that convince me that it does make a difference, so I persist.
But what are you basing that belief on? Thats what I would like to know. Unless you don't think computers will be able to do most of the things that create fundamental value in society. Of course you can imagine all sorts of services on top (prostitution, games etc) but the idea of the job market as something that we just keep creating new jobs for is simply not backed by reality.
What fundamentally new jobs have we really seen the last 100 years besides computer engineer and how many people does that industry actually occupy. As it turns out not a lot.
Everything else is just a more refined version of things that already existed in some form or another and rapidly being replaced by technology.
Which part of it? Not too many generations ago, many people lived entirely off the land. A large portion of people's "jobs" were displaced from agriculture and yet over time new jobs keep getting created. There are jobs that no one had even thought of that are now providing for the livelihood of many people.
Yes I believe there will also be new things that people want and new ways that other want to help them get it that will keep fueling the economy. There are things that are inaccessible to many people now that will become more everyday and "middle class".
Unless you don't think computers will be able to do most of the things that create fundamental value in society.
No not at all. Of course I think automation can keep getting better but there are plenty of jobs that I don't see computers doing anywhere in the near term - building a house, paving a street, cooking food, being a nurse, being a garbage man, etc etc.
What fundamentally new jobs have we really seen the last 100 years besides computer engineer...
Um seriously? I know people who literally are "social media managers". I know people who sell eBooks for a living or do Youtube. I know folks who attempt to at least live off the music they make.
These are just "new" jobs that no one could have envisioned before. But think of all the greater demand there could be existing jobs. I have a friend in Fiji and apparently there nearly everyone has a housekeeper, even "middle class" people. There is a demand for stuff like that even in America - people keep pushing toward whatever improves their standard of living as long as they can afford it.
Technology is growing fast but its far from the only thing desired by people.
Which part of it? Not too many generations ago, many people lived entirely off the land. A large portion of people's "jobs" were displaced from agriculture and yet over time new jobs keep getting created. There are jobs that no one had even thought of that are now providing for the livelihood of many people.
New jobs keeps getting created simply because the markets have grown through population growth and globalization. If you look in the US out of all the new jobs created since 2009 95% of them are temp jobs not structural jobs. Temp jobs means that the job is being perceived as less valuable (no healthcare) than ex a structurally solid job. The actual market value of most jobs is diminishing. At the same time cost of living is going up up up.
The jobs no one have thought of are literally a drop in the ocean. They pay a few people very well while 90% don't make a dime on them. And they are only "new jobs" in the sense that they are about a new medium or technology. But fundamentally nothing new about them.
The problem with most jobs is that they don't actually require the whole human only a small part of the humans abilities. Unless you don't think technology can replace that function I have a hard time seeing where you get your view that it's not an actual problem from.
Technology allow you to be competitive which mean you need to keep investing in technology to be competitive. Yet income is actually declining and cost is going up.
Here is an interesting graph showing price change:
How is that an illustration of things becoming more accessible? Unless of course you mean that TV series covers people fundamental needs.
No not at all. Of course I think automation can keep getting better but there are plenty of jobs that I don't see computers doing anywhere in the near term - building a house, paving a street, cooking food, being a nurse, being a garbage man, etc etc.
Yet there are already technologies doing that today. This will only increase over time.
Um seriously? I know people who literally are "social media managers"
Social media manager are just marketing people in another medium nothing new there. Selling ebooks is just selling books in another media. these aren't actually new types of jobs and it's a very very very small fraction of society who actually make a living from these. You can't live on likes.
The benefits of technology is desired by people and thats what matters here.
How many people and jobs are we talking about, if these are the jobs expected to support the vast majority of the populace? And on a related note, why would these people not feel resentful that (by necessity) a major chunk of their earnings is directed towards everyone else?
Assuming that humans will behave differently and be driven by different things than they have _for millenia_ is foolish, and why BI will never work.
Humans are part of a larger system, that system is evolution. For millions of years evolution have favored those who adapt to a new environment.
Thats the proper perspective to understand this discussion, not pointing back to a few thousand years of human civilization, unless of course you claim that humans is the last word in evolutionary process.
If you (like me) believe technology will take over most jobs then (U)BI is so far the best model we have as it will always make it worthwhile to work.
Seems like the most obvious conclusion is that labor for crappy jobs will become a lot more expensive. Basically any sector that relies upon cheaper labor, or is highly undesirable (think working on pipelines, coal mines, agriculture, sanitation, even low level medical care). And if it isn't based on wealth and only income, I can see a lot of professionals dropping out too once they've become comfortable.
I think you're right at least to the extent that this complicates drawing conclusions. Another issue I see is that in this study we're talking about a single household in a likely poor community getting a basic income. This is totally different from a scenario where the recipient knows that everyone else in their community is receiving a basic income too. Imagine this: a woman in a poor community who works a low-paying job starts receiving a basic income. Her boyfriend loses his job, and he starts to rely on her for support. In a world where both parties have a basic income, she'd have an easier time eventually telling him he needs to get out on his own feet, but in this scenario, she's the one with this "extra money."
And what about border policy? You can't have open border policy + UBI together... I mean why not try to come to America then. I would I come if I had a chance to get UBI and live there, and millions, millions of others. Would the system still work?
I think you mis-understand UBI. UBI enables 'survival' within the country. It will just about pay for a room and basic food. You want to eat steak, you will need to get a job.
Look at social spending rates by government over time. It's typical that they rise, despite attempts to restrain them. Critics call attempts to slow the growth rate "cuts" and paint the reformers as heartless.
Because people lack gratitude for the life we have. (including me) No generation before has been so prosperous or lived so long, healthy lives. Now how do you solve that problem?
Richer society's can support higher standards of government spending. So IMO, the only metric that matters in Government spending is per person spending / per person GDP.
And in that context you see various growth and cuts over time.
However, even that is misleading as richer society's have a higher percentage of discretionary income and may be willing to pay higher tax rates.
No I did not. Doesn't it come as obvious that people start asking for equal treatment? Or you just build new barriers and second class citizens.
If USA would pay UBI I would do my best to somehow become citizen, there is no reason for me why I shouldn't try. And there are over 7 billion people on the planet, I'm not the only one who thinks that way. That is why I raised the question of borders/immigration + UBI. It's very different situation when it is now for illegals and also people who want to become citizens.
On the other hand, since you're not going to be the only one with this line of thinking, it will create a potentially large incentive for other countries to establish their own UBI to prevent a "brain drain". (It wouldn't totally eliminate the draw of the USA's UBI, though, since foreign UBIs would likely be lower.)
Presumably any UBI system would be limited to citizens only.
In combination with open borders, you do risk having a class system, where the citizens have money and immigrants don't, but at the same time, it solves the issue of certain jobs not being worth the time of someone who gets UBI (and therefore being for immigrants).
It's a tough balance for sure, and one of the main arguments against UBI (accidental creation of a class system).
again showing that socialism causes division and tribalism. i dont want to give more money (currently near half my earnings) to the top 1% of the world (any american on minimum wage) over the current global charities I give to
This assumes people will enjoy a 5 year vacation though. In Norway if you're chronically disabled you can apply for something that seems very similar to basic income. I'm in that system and in my experience most of the people I know in this system are bored. It could be because all their friends are working so it's difficult to meet new people, there's also that this system is for disabled people and people with mental issues could find it difficult to meet other people, etc.
I remember working somewhere where I was being tested before getting into this system and I met plenty who said they were heavily advised not to go back to work by their doctors. They want to do /something/ because being at home watching TV gets boring after half a year. So they were sent to that place in the meantime. I have other friends who are in this system who end up working in charity somewhere.
But most of my friends i met in this system ended up finding a job, despite being promised permanent "universal income".
In the past if you tried to work somewhere while being in this system, and it worked but you got sick again you'd have to reapply (which is a very long process) but now it's changed so it acts more as a safety net in case working somewhere doesn't work out for your health. I've heard this is to encourage people to work and I've heard (from the people who work in the system) that it's successful so far.
This doesn't assume they'll take a 5 year vacation at all. It's the difference between deciding to become an artist because you know you'll never worry about money, and deciding to study accounting so you can eventually have an accounting job you don't care about that will support your evening art practice.
It's common sense if you have any interaction with US society. Not every common sense thing needs to be verified by a costly scientific study. Though some researchers try.
Plenty of things that people think are "common sense" are far from it. If you want to make a assertion such that you have, you'll have to have evidence.
It's commonly said to be common sense to justify cutting and severely restricting social programs, but rarely with supporting evidence of widespread abuse. Usually just small amounts.
In my experience it is hard to take a 3 week vacation without coming across an idea which "I would do if I had more time". I bet some interesting results will come out of this research even if every single person starts their 5 years with a vacation.
Maybe you would, and you know what? Good for you if you do.
Just about everyone I know would start a business, volunteer, do creative things, contribute to making the world a better place.
But, at the end of the day, I don't care how people spend their time or their money. If some fraction of the population wanted to bum around on their minimal UBI for the rest of their lives, fine by me. It's never going to lead to a life of luxury, and I quite honestly don't care if that's how they want to waste their lives.
This argument has no foundation in logic. There is a subset of people who are fine with paying those taxes and do not care how the intermediary recipients of those funds spend them.
Shit, man. If "financing things I don't like with my taxes" is the hill I'm going to die on, I'm going to set my sights on the insane military budget we use to turn far-away countries into toilets and parking lots.
Funding my fellow countrymen who want to squander their lives, so long as they're doing so peacefully and in the privacy of their own homes? Sign. me. up.
because of the multitude of positive effects it has on society that i live in. less depression, less poverty, less risky or criminal behavior, more economic activity, better educators, better medical care workers. this list can go on forever.
But most of my friends i met in this system ended up finding a job, despite being promised permanent "universal income".
So this experience stands against one of the most common arguments against basic income, "nobody is going to work anymore". It validates my belief that people will still seek purpose (and monetary rewards) even when their basic needs are fulfilled.
I've heard this is to encourage people to work and I've heard (from the people who work in the system) that it's successful so far.
Always good to hear of policy that's actually working. At times, watching the news makes it feel like all of politics is just a smoke and mirrors game without any positive outcomes.
I feel like we already have tons of examples of people not really working for the money. CEOs of major companies typically have more than enough saved to just live indefinitely off the returns of that money. And yet, they don't.
While I'm hoping to see this system work I'm not sure if it will and whatnot. It's great to see research for it and maybe they can study some existing systems as well.
I feel a lot of people on here want to be or are already an entrepreneur. So of course your friends are most likely gonna start a business if they had the time, opportunity and safety net. But maybe that's enough?
Another thing I hear a lot from people in this system is saying they wish they had more money and wish they could do something to earn more. (But then again I think this is always the case)
The money we get is based on some average income. It's enough to pay the rent for an apartment, save up a little to buy a TV, maybe even a trip to another country if you're careful, etc.
I don't think it's enough to own a car, buy a house, have kids, etc. To live that kind of "dream" you need to find a full time job. Which sounds fair within the UBI context but maybe unfair if you're disabled. (I personally don't know, my own life is more than good at the moment)
I should have mentioned that there's a social stigma with not working (at least in Norway). Many of my disabled friends are not very open about it because they think it's embarrassing. I have one friend who choose to work at charity-ish place just so he can say he's working. He's 40 years old though and I believe the stigma was much stronger back in the past.
Personally if people ask what I'm doing I tell them that I'm disabled but I like programming, making music and so on. I've never had anyone react negatively to this, but this is face to face, first time we meet, and maybe the non disabled people I meet have similar mindset as me. (programmers, freelancers, artists, etc) The friends I have who are disabled is another friend circle entirely.
So I don't experience the stigma but I can imagine there are some people who don't like it of course. It's just that I don't hang around those people.
But this stigma could be an important factor as to why people want to work.
I feel like I'm talking for https://www.nav.no (the system in Norway I'm talking about). Maybe they have more useful (and more accurate) data for the people who research UBI.
Since they have a control group, they can at least learn how people's behavior changes when they get free money for 5 years. 5 years is enough for going back to school, getting retrained, moving to a new location for better work prospects, etc.
They can't claim to know how people will behave if it is a lifetime, but evaluating some change is better than evaluating none.
I think you overestimate how much the average person prepares for the future. Look at the number of people who have emergency funds. 62% of Americans have <$1k and ~20% have no savings [1]. That number is too high to be explained away by necessary expenses. It is clear that people are just bad at saving. We can even look at the old game of "I'll give you a dollar today or five at the end of the week." Most people take the dollar today.
So with this time frame I believe initial ideas of "I'm going to put this to savings" will quickly disappear. Five years is a pretty long time, especially when considering at how bad humans are at preparing for the future.
What I think will be interesting is to see the different spending trends over time. I would imagine the first and last years are different than the middle three. But that's just a guess.
That's still not the same thing. Failing to save is partially because people think jobs are stable. That's unrelated to knowing you will need to get a job in 5 years after your extended basic income vacation.
Saving $1k has nothing to do with your job being stable or not. That's a safety net for life. It is the basic emergency fund. Cars break down, people get sick, life happens. So to extend your premise, "Failing to save is partially because people think expenses are stable." Which is clearly poor planning. We know humans are bad about estimating risk. I'm not sure why this is such a controversial idea.
What I'm saying is that if even those above the 50% income level are bad about saving a basic emergency fund, I don't expect those receiving this kind of grant to be any better at preparing emergencies. I do think they will be able to handle them better, but I do not expect them to plan better.
The 60 percentile income is < $46k. That people have little emergency funds on incomes less than this is largely explained away by necessary expenses. 20% have no savings -- the 20 percentile income is $17k. Show me a net savings budget on $17k.
The median income is $57k/yr [1]. Or we can go to the second chart and get the following: 11.2% make under $15k. 20.8% make under $25k. 30.2% < 35k, 43.1% under 50k, 60.1% under 75k.
The point isn't that the lower can't save, it is that people above the median income still don't save. These people should be able to save, but don't.
You also have to look at the effect of UBI over generations. Children growing up with UBI may never see people close to them who do actual work. I once had a summer job at a welfare/employment agency. A lot of the people who received welfare in the second or third generation often had no idea how a job works. They were late all the time or just didn't show up for a week. The social worker had to explain to them how a job works.
I don't blame them. They just never had seen what people who have a job do. When I grew up everybody close to me was working so I could observe how a job works. And people who grow up around high-powered people like CEOs know how being a CEO works.
Hi, I’m someone who happened to both grow up on welfare AND watch zero people close to me work any sort of job ever.
Your comment reads to me as an implicit argument against UBI. Is that your case?
Allow to me comment from an insider perspective.
- The welfare money didn’t cause the lack of work. They were not strongly related or if anything it’s the lack of work that drives the need to take up welfare.
- It’s likely an extremely small minority of children in welfare-assisted families who see zero closely related adults working at all.
- People who grow up without working role models do have a harder time learning the ropes on the work life, on that we agree. That doesn’t mean they’re doomed to fail completely. (Saying this as someone who had no idea how to do this right but eventually learned, went through grad school, now works in tech, outearns the median income in her city, etc). Also how do you explain the many underemployed/unemployed/deadbeat kids of successful high-status parents? The connection seems rather spurious to me.
- Taking away the welfare money would do nothing to get someone employed. Instead it might endanger the family’s life. You realize that right?
I am not arguing against welfare or UBI. I am just saying the long-term effect may be different from what people are thinking. Especially at HN people seem to think all people on UBI will turn into artists or develop software all day. Maybe that will be the case but I have my doubts.
"People who grow up without working role models do have a harder time learning the ropes on the work life, on that we agree. That doesn’t mean they’re doomed to fail completely. "
People certainly can escape their upbringing but from my observation on average most people stay close to their social class. That doesn't mean that some won't do much better or much worse than their family.
The basic problem with welfare as it currently exists, is that it actually provides disincentives to working. If you start working they take away similar amounts of welfare. You'd have to get a job that is way more than the welfare for it to make even a little sense.
That disincentive goes away with UBI, which is the main reason I think it would work better. Under that system, every dollar you earn directly translates to a better standard of living.
I don't completely disagree with you. I personally know two 2nd-generation 'trustfunders' who many would say don't do much. That is, they 'just' do leisure work. One plays poker part time, and he volunteers the rest of his time. The other promotes bands that she likes. But, are they really doing nothing of value? I think many people who meet them are sort of envious: seems like a nice life!
I also know more than a few 1st-generation 'trustfunders'. Some are artists, some scientists, a couple work as university professors. They certainly are all doing useful work, right?
Just look at HN as a case study. There are many people here (myself included) who could live off of their savings indefinitely. In fact, I've tried a few times. But, as others have pointed out, sitting around doing nothing is dreadfully boring. Once one removes the usual daily stressors (e.g. being able to pay for rent, food, kids, etc.), escapist behavior quickly grows dull. Believe me, when not required to manage stress, there is only so much Netflix one can watch and only so many video games one can play.
I wouldn't worry about the vast majority of Humans doing nothing. People just do stuff. It just means changing perspective of what is valuable work. There are many types of work that are valuable to Humanity even if the market can't support them.
Edit: just want to add that I would be concerned by younger adult males forming gangs. Their PFC's aren't completely formed, and they have raging hormones. In Christian western countries, it's a common saying that "idle hands are the devil's workshop". And, I find that true. So, young adult males, with nothing to do and risk-taking brains, tend to get into trouble.
I wish technically-inclined people who could live off their savings would work on FOSS communication tools (e.g. FreedomBox, MatterMost, Matrix.org, Smallest Federated Wiki, or similar) to create viable alternatives to the centralized profit-driven communication and search systems created by venture capitalism. Or do whatever other worthwhile FOSS floats your boat like for educational simulations or whatever to be part of the gift economy. We desperately need alternatives -- and they are mostly not going to come from the surveillance capitalism culture (or its captive governance) which privatizes gains while socializing costs and risks (including costs and risks to privacy and democracy).
And non-technically-inclined people with savings could help by promoting, documenting distributing, training, prettifying, and providing other support for such systems.
And yes, I've put all my spare resources into that kind of FOSS technical work myself (although at the moment I'm once again working for pay to climb out of taking on debt to finish another FOSS project done with my wife -- this one called NarraFirma).
Related by Alan Kay: https://news.ycombinator.com/item?id=15261691
"In the interview -- to say it again -- I'm not calling for the field to implement my vision -- but I am calling for the field to have a larger vision of civilization and how mass media and our tools contribute or detract from it. Thoreau had a good line. He said "We become the tools of our tools" -- meaning, be very careful when you design tools and put them out for use. (Our consumer based technology field is not being at all careful.)"
And yes -- a Basic Income would make that possible for everyone someday. But if you can live that way now, why not help create a more joyful and sustainable alternative right now? Isn't it plausible that our direction coming out of any Singularity may have a lot to do with our moral and technical infrastructure going into one?
(Obviously, there are some paying jobs that align more closely with such ideals, but they tend to be few and far between, and if you have savings and take one, you displace someone else who might not have your options.)
Personally I don't believe in idea that many people would be able to build successful FOSS projects and communities around them while living off their savings. It's could be a good for the start, but nothing would work without project having viable business model like MatterMost or Discourse have. Or if someone sponsors it be it some corporation or individual.
Reason for this is simple: successful project it's not just the code, but also community around it. Coordinating even small team across different time zones, helping new contributors, reviewing the code and keeping it all together is exhausting daily job and not everyone can handle that. Now projects that you find valuable would require highly skilled programmer to work on them.
So the person it's require to build such software can easily find a job in one of corporations that pay very well or FOSS-related job that might have lesser pay. Why should someone prefer to live off savings or in debt just to build software that don't have business model?
This is the reason I don't think basic income would help here at all. Of course some could be okay in living just above poverty while working on project they believe in, but most would prefer job for some corporation that would have have 3-10 times better pay.
So instead of basic income there should be viable way to fund open source projects and to distribute the pay fairly according to the job done. For individuals and small teams there is already Patreon, but there no simple solution for distributed teams usual open source project have because it's extremely hard to collect and distribute the money without offending someone or contributors lose motivation to work on project when one guy is being paid while they get nothing. Unfortunately I don't even sure if ever will be solution for this.
I agree anyone competent enough to run a good FOSS project from their savings will face a daily temptation of abandoning their precarious existence for a substantial secure income working at a corporate job. And I agree also that it is problematical how to divide donations to a project when there are multiple contributors (especially versus donations to specific developers, but even that is problematic if a multi-person project is involved). I also agree on the need for building a community around a project.
Where we differ regarding the BI and FOSS is possibly in thinking in these areas:
* There are many small but important projects (Mithril, Vue, many others -- even Linux early on) which are initially the work of one developer, eventually supported by a community. A BI would make more such starts possible, and also make contributions more feasible. While it is not quite "if you build it, they will come", certainly there are a lot of cases where a good project, well supported by one person, makes a big difference to a lot of people. Khan Academy in its early years is another great example of this.
* There is an entire gift economy of volunteerism. In some ways, much economic activity in even the USA is voluntary (even if it is ignored in the GDP) when you consider child care, helping neighbors, volunteering at non-profits, conversing with strangers to share knowledge, and so on. So, I know it is possible.
* Regarding "most people" and "some people": If you multiple seven billion people on the planet times even 0.1% of people being civic-minded at any particular time (and the percentage is probably much higher), then you get 7 million people. That is still a lot of people who can put a lot of time into things. And even without a BI, Clay Skirky said, there is a lot of time that could be liberated for improving free software and free content:
https://web.archive.org/web/20110102193349/http://www.shirky...
"Two hundred billion hours [of TV watching], in the U.S. alone, every year. Put another way, now that we have a unit, that's 2,000 Wikipedia projects a year spent watching television. Or put still another way, in the U.S., we spend 100 million hours every weekend, just watching the ads. This is a pretty big surplus."
The bottom line is that the way people make a lot of money is by standing between someone and something they want and asking for a toll to access that thing. Almost all venture business models are based on some variation of that (or aspire to that such rent seeking). It's not the only way to make money, but it is the way to make a lot of money. The problem is that tolls have lots of external costs. For tolls at bridges there are delays, health costs of fumes, and increased risks of accidents. For online software, there is the externality of lost privacy (but only one-way, consumer to aggregator) needed to make possible the tolls Google and Facebook charge advertisers as they sell human eyeballs. There is also the externality of risks from central points of failure (whether loss of service or censorship).
Small-scale exchange commerce may make a lot of capitalistic sense at the scale of, say, running a local farm, bagel shop, or plumbing company. But on a large scale, like Facebook, Google, Slack, and so on, the centralization of control of information flows poses enormous risks to democracy.
If there was not so much regulatory capture, we might expect our governments to pour literally trillions of dollars a year into software (and content) for democracy right now given how important that is. Instead we have a proprietary centralized Facebook, Google, Twitter, and even Windows -- and our democracy and culture is at great risk from an imbalance of power. Governments at the behest of content publishers have continually expanded copyright and passed ever more draconian laws about sharing information. And every day we get more funding pouring into the next venture (like Slack) that can figure out how to capture and centralize more information and data mine it for the benefit of the investors.
As we move into an age of AI, the emphasis on monopolistic business models is even more dangerous. It's bad enough to have a communications system shaped by short-term greed and competition -- it is far, far worse to have autonomous inhuman AIs shaped by short-term greed and competition let loose on the net.
Of course, ultimately, there are lots of moral failures all around. If people had rejected Facebook or Slack from the start, the world online might be a very different place.
Zuck: Yeah so if you ever need info about anyone at Harvard
Zuck: Just ask
Zuck: I have over 4,000 emails, pictures, addresses, SNS
[Redacted Friend's Name]: What? How'd you manage that one?
Zuck: People just submitted it.
Zuck: I don't know why.
Zuck: They "trust me"
Zuck: Dumb fucks
Now, we all need to trust other people in this world to have a happy life. But in a democracy, the idea is to spread that trust around as much as is feasible and have checks and balances. There is also the notion of incrementally earned trust -- and also the recall of trust (like impeachment).
But how do we impeach Facebook, Slack, Google, or Equifax? In our society, we can't. The best we can do is create alternatives.
Instead of centralized proprietary services like Facebook or Slack, we could instead have shared standards (e.g. email, IRC, or what comes next) and a variety of implementers of those standards. But if all the techies are being paid by VC to work for Facebook or Slack or the next similar service, that creates a vacuum of developers working on better email or better IRC standards (and implementations).
We may benefit from some hierarchy, but we also benefit from having that mixed with some meshwork (as Manuel De Landa suggests: http://www.t0.or.at/delanda/meshwork.htm ).
There are several options for moving forward -- a Basic Income is just one of them. Maybe there can be better business models that affirm democracy. And maybe there can be more court rulings protecting democracy. And maybe there can be more collective investment by government and foundations in FOSS. (One other place I suggest that is here, suggesting the intelligence community fund FOSS intelligence tools: http://web.archive.org/web/20160508005451/http://pcast.ideas... ) But we may not get there if we believe a conventional rent-seeking business model is the only way to fund most software and communication services.
While I wish to be as positive as you are about the future there still few points I feel important to make.
* First of all I don't think that important projects started by single developer is right example for benefit that BI could bring because they managed without basic income in past and they don't need it today.
If project don't get enough traction during period when project originator actively work on it that's usually mean that will never happen. But if original developer leave there still chance for someone else who believe in idea to take control or just fork it and continue. Also this rotation seems like one of crucial parts that make open source successful.
So while BI would let someone to work on the same code indefinitely or at least much longer than now I don't think that will greatly increase number of popular and widely used open source projects. And who knows might be it's will even decrease that number.
* Another note about voluntarism. It's great that in developed countries there is endless number of ways for society to participate in all kind of useful activities and I wish it's was even remotely close in country of my origin. Though for the reasons stated before I simply don't believe that crowd-sourcing can be applied to build successful software projects. You might say that community can go promote software instead of helping with development, but today you can't even promote project efficiently using centralized tools we have simply because companies companies like Facebook and others want you to pay for that. Number of communities outside of centralized social networks is dwindle over last 10 years.
So I wish to think positively, but so far all I see is that distributed FOSS projects cannot successfully compete with corporate or VC funded products. With direction where Internet, hardware trends, Internet and society itself going I don't see how we going to get more people involved in open source and not less.
But hopefully someone will come up with idea how to fund truly distributed open source teams so they can at least somewhat compete with VC money burning centralized proprietary alternatives. Without that best we can hope for is that open source will keep positions it's have today.
A basic income makes it possible for, say, 100 software developers to choose to work together on the same project of their own choosing and of their own free will -- as opposed to having to work for someone else on someone else's choice of project just to be able to pay for food and rent. That's the difference a BI would make.
Now, getting 100 software developers top agree to work together on the same project might not be easy ("herding cats"). But it seems doable, as we can point to quite a few projects (including big names like Linux, WordPress, Apache, and Python) where it has happened. And there are even some books out there on how to create and manage FOSS projects.
Granted, those particular big-name projects have also had commercial support eventually -- so we don't know all the details of what might be possible otherwise. But there are plenty of examples of voluntary groups of significant size dedicated to a common purpose (fire companies, sports clubs, historical societies, and so on) so it is not inconceivable the same will continue to happen for software if people have the free time to participate in them.
Supporting your third paragraph, I had some contact with the unschooling movement while growing up. The experience is typically that kids will do nothing for a while. Maybe quite a while. But then they get bored, and start to pursue things they find interesting. Art, music, literature, science, programming. You sort of need to detox from living under a very defined structure before you learn to self direct and spend time doing things you enjoy. It also seems possible that this transition could become more difficult as people age. Intuitively that makes sense to me, and might partially explain why some adults have a hard time transitioning into retirement.
I'm not sure if I or the people here are representative of the people the proposal targets, but if I had a guaranteed basic income for 5 years, I would attempt to start a startup full time.
One factor that would be lost in a controlled, basic income test is the inflation effect. Implemented on a national scale, cost inflation of basic consumer needs is a near certainty. On a controlled test of 1000 people inflation would be nearly impossible to achieve without localizing the test to an absurd degree.
I could see this test could serving as a dataset for calculating anticipated inflation rates on a national scale. If money is sent out via a trackable card instead of raw cash, you could begin to extrapolate where this basic income spends would be going, be it consumer products, bills, etc.
I like the thought behind the trackable card idea, but most participants are going to have other income and savings too, so what you're really learning from them is what spending they're willing to share with people who've given them money to track how it's spent.
Even if it was people's entire household budget being tracked, it'd be difficult to draw too many inferences from spending in the absence of price pressures driven by everyone else having UBI too.
Yep, basic consumer staple price inflation is something I never see addressed with any satisfaction when people are talking about UBI. Housing prices and rent will assuredly rise proportionally to the basic income amount if this were to be implemented nationally, so wouldn't pumping all this money in basically just have the effect of increasing inequality?
Housing prices and rent will assuredly rise proportionally to the basic income amount if this were to be implemented nationally, so wouldn't pumping all this money in basically just have the effect of increasing inequality?
Unlikely. UBI removes the connection between location and income. As a result you can move to somewhere incredibly cheap to live since there's no need to be in an in demand market in order to have a nice job.
Housing is really quite cheap in the US. With Real Estate you pay for the location not the actual land or building.
Of course people won't necessarily want to move away from their "hip" city, but UBI is "basic" and if you want to stay in a high demand area you will have to supplement UBI with work.
As for basic consumables, demand is unlikely to go up for these fundamental goods because people are _already_ consuming them at their basic required levels under the current system (toilet paper, eggs, milk, bread, chicken, beans, rice, birth control, etc).
If people in every location have their income increased, then the housing prices inflate in every location. Saying, "People can just move" is missing the point.
It isn't that they can't afford to live where they are now, it's that BI will be absorbed by price inflation everywhere.
A big reason for the current rise in real estate prices is urbanisation (centralisation of population in big urban centers) - e.g. London, NY, SF, and plenty other cities. (The other reason is foreign investments, but I'd argue the investment comes after the initial rise in prices, simply because real estate is perceived as a good investment opportunity.) This urbanisation is to a large extent driven by the fact that the most high-paying jobs are available in these cities, which consequently also increases the availability of lower-paying jobs. I.e. people move to cities to succeed/earn money.
If you remove the last implication - if people can earn a living without moving to big, overpopulated cities - then arguably the concentration of population would drop and the "bubble" would pop/deflate.
You're assuming that there can only be one cause of real estate price increases.
Housing prices are a function of income elasticity - raising the income for everyone will raise housing prices for everyone. Note - this is not the only way that real estate prices can increase (as you described urbanization), but it is one that BI would cause.
raising the income for everyone will raise housing prices for everyone
This is a truism but incorrect in the context of this conversation.
UBI does not increase incomes for everyone. It is a wealth redistribution. Many will see their income fall, especially initially, in order to prop up the incomes of the poor and those who decide to live solely off UBI.
This is a misunderstanding of how both macro inflation occurs (money supply growing faster than true value of wealth it abstracts), and how price is set (supply and demand).
UBI does not "create" new money and just give it to everyone (which would cause inflation). It's a wealth redistribution. That is, many people will see their income go down under UBI (probably most HN readers for example). The money supply will represent the same amount of wealth, what changes is who owns that wealth and as a result who decides how to use that wealth to consume.
Regarding price changes, price is set by the amount of a good/service demanded by consumers, and the supply of the good/service created by suppliers. High discretionary income does cause the demand for certain goods/services to go up (especially luxuries), but UBI is so basic at $1k per month it won't make much of a change in the demand curve because the type of goods/services that will be consumed by someone living on UBI are so fundamental they are already consuming these goods at the same rate under the current system.
So far as housing is concerned, UBI will pretty much "explode" the supply of acceptable housing for people living solely on UBI since they get access to housing in the entire US instead of having it constrained to locations where they could conceivably "make a living." I'm sure you realize what happens when supply increases drastically but demand stays somewhat constant (everyone has to live somewhere and you can only live in one place at once) -- the price of housing on avg will plummet considerably for UBI'ers.
The idea of UBI at $1K per month shows that UBI advocates don't know how to do math. The US tax revenues (combined Fed and State) are roughly $6 Trillion. Giving 150 million people $12K per year is $1.8 Trillion. Unless you raise taxes by 1/3, you're going to cause inflation.
Not a strawman at all. Many UBI proponents claim that it's more efficient, by directly paying for services already provided. Then when called on that, they switch to your strawman that "Everyone knows UBI will require an increase in taxes..."
Again, good luck trying to raise tax revenue 30% without killing the US economy.
My taxes are already pushing oppressive. Raise them further, and I'll seriously consider "going Galt" - cash in my investments, buy real estate & capital equipment outright, and live quite comfortably on $4000/mo ($UBI * family population).
You're subsidizing the unproductive, and punishing the productive. I can be productive in untaxable ways.
It doesn't seem like a strawman to me. The money has to come from somewhere or else mass inflation will happen instantaneously. The number of goods and services that exists is finite. Giving people free money which removes their burden of supplying value to others will not only fatally harm the buying power of the dollar but it will actually reduce the number of goods and services available which will have the opposite affect than intended. UBI will fail spectacularly if implemented at any meaningful scale.
Sounds like yet another argument trying to deny the law of supply-and-demand, like those who quote the laws of thermodynamics and then claim they have a perpetual motion machine.
Instead of having to work for that first $1000/mo, it just...appears. Yes it was earned elsewhere, and whoever earned it won't miss it as much as the recipient will appreciate it, but since the recipient has done nothing for it, its local value plummets. Instead of some low-income people having $1000/mo for rent, now everyone has $1000/mo for rent - and basic prices will rise accordingly.
I won't notice much change for losing a sub-1% of my income, but those for whom UBI is really intended can go from really struggling to renting (even buying) housing. With limited housing supply, suddenly prices will rise.
While I'm a staunch advocate of "move already!" for solving economic problems, I don't see enough people moving - nor enough housing for them to move to - to cause "the price of housing on avg will plummet for UBIers".
Imagine the poor section of town. Many/most rent. Suddenly, with no additional productivity, everyone is getting checks for $1000/mo. You think rent etc prices aren't going to suddenly skyrocket? I grasp your theory that people can now move to more affordable locations, not needing to be near jobs - but will they really? before they can, rent prices just shot up, consuming their newfound income. Destination rental prices similarly increase - still relatively attractive, but higher than before since there is more demand and more money to pay for it.
Yes the supply of acceptable housing for UBIers increases, but those markets already existed and were already priced for a low-demand market; now you've "exploded" the demand - prices will rise, matching people who now have $1000/mo and few expenses.
Here you claim to earn more than $100k every MONTH, yet in another comment you claim the amount you are taxed is nearing oppression. It sounds like maybe you're just saying whatever helps your argument at the time.
I’m not convinced that UBI will dramatically affect the housing supply for many people who would rely on it. Maybe you can expand on what you mean in light of an example:
I live near Vancouver, which is the most expensive housing market in Canada. Poor people here have access to free health care, a provincial welfare program, and a permanent disability allowance. The income amount is enough to live on in some parts of the province, but not Vancouver. Still there's a glut of unemployed poor people who prefer substandard housing or homelessness over relocating to where they could afford to live. They don’t choose to live anywhere else, even though they're not in Vancouver to “make a living”.
Programs aimed at helping the poor here focus on providing subsidized housing, not relocation.
It seems to me that if UBI doesn’t help these people afford a better standard of living where they are now, then it won’t help them at all unless they’re forced to relocate. What am I missing?
Figures put 14-20 million unoccupied houses in the US. A lot of those are just rich people buying valuable real estate and hoarding it as a store of value, but a lot of them are also in locations where nobody who would want to buy them can afford to live because there is no work available. There are thousands of ghost towns in rural America which depopulated for a wide variety of reasons since the 70s but all could be cheaply renewed if people could survive living there without guaranteed constant employment.
So its not that the whole housing market just moves up the value of UBI and nothing changes. UBI introduces a new market of houses that currently are unsellable and rotting.
Those are obviously not a long term solution, but the existence of UBI and the economic pressure it produces will incentivize builders to develop the cheapest possible living conditions to supply to people living on UBI. That almost certainly would be an entirely new model of building - constructing for density, but without the limitations of building in already densely populated areas.
The unoccupied homes in the U.S. is primarily due to banks holding onto foreclosed properties.
You could say, "This is a problem with the current financial system," which it is, but it's not a problem that UBI will solve.
If UBI is enacted, then prices will still inflate and people who purchase foreclosed homes at auction will continue to do so today, because they will also have the same increase in income as everyone else.
If you assume UBI is based on an income tax, then that's not universal basic income, that's negative income tax.
Even so, if you hypothetically see a decrease in income for 3% of the population and an increase in income for 97%, you still have inflation. 100% of the population purchases housing, which is income-elastic, meaning housing prices will increase because 97% of the population's income will increase.
Inflation is a result of the money supply growing faster than the national wealth it represents. Example: US goods & services increase in value 5% but the Fed increases the money supply by 8% leads to inflation - the money/value abstraction is out of sync in such a way that money represents less value.
Wealth redistributions don't cause inflation. The money abstraction still represents the same amount of wealth, it just changes who can choose how to use that money to consume.
That said, you'll probably see some radical pricing changes in the market from the new system, but probably not as much as you would expect because UBI will be so limited at first, the money will be spent on absolute necessities that people are already consuming under the current system (ie demand won't go up for toilet paper and basic consumables, and UBI isn't enough for luxury goods).
That's one cause of inflation. Another cause is raising the income for everyone (i.e. minimum wage, etc.).
There exist goods and services with prices that are a function of income-elasticity, meaning that they inflate with the more money that people make (e.g. housing). This is one of the reasons that many welfare programs are targeted spending, like food stamps or medicaid.
Arbitrarily raising wages for everyone is the same as increasing the money supply without increasing the underlying value it represents (which causes inflation).
UBI does not do this. It doesn't "increase" the amount of money floating around, it simply redistributes a portion of the created wealth from one population (the rich) to the total population. UBI money isn't pulled out of thin air, it's taken from one group (via taxation) and distributed.
Of course prices for certain goods and services will change as a result of this wealth distribution, but to suggest global inflation will occur (ie the value that money represents decreasing within the complete system) is incorrect. Furthermore, while I obviously can't say for certain, I imagine prices for fundamental goods will not change drastically simply because UBI doesn't provide enough money for real discretionary spending. The goods/services you consume under a UBI program you already would be consuming at the same rate under the current system.
Sure, what you're describing is the quantity theory of money, but there are other reasons why you could see inflation given a universal income, depending on the circumstances.
If you consider the velocity of money, you will almost certainly see inflation on consumer goods if the money to be redistributed would have otherwise just sat in some rich guys's savings account.
There are also inflation expectation to consider, liquidity traps, the actual demand for money, etc.
I expect prices to change in order to reflect the new system, but I think people's "sky is falling" concerns about the price of consumer goods shooting up is way off base and sensationalist.
UBI alone simply won't provide enough discretionary income to cause sharp increases in demand of goods. Not to mention, the type of goods that a basic income affords are those that are already scaled out and are easily scaled out - ramping up supply would happen relatively quickly in the unlikely scenario that demand for these goods does go up drastically.
As I've repeatedly said in other comments, I believe demand for these simple goods will stay relatively flat since they are such fundamental necessities people are already consuming them and won't necessarily increase demand significantly (UBI won't cause demand for toilet paper to go up significantly).
Currently we have an economy that motivates companies to spend 1000x more capital developing innovations for a consumer with 1000x more buying power. Basic income introduces a source of capital that motivates companies to innovate in that area of "basic consumer needs", i.e. things needed by the majority of people, not the majority of dollars.
You're right that the short-term effect of this is indeed inflation on the prices of these needs, but the long-term effect is larger portion of the economy dedicated to filling basic needs instead of superfluous luxuries.
Implemented on a national scale, cost inflation of basic consumer needs is a near certainty.
How so? Is there are large number of consumers that are currently not able to satisfy their current basic needs? Otherwise aggregate demand will stay the same and on the supply side nothing changed, so there is no reason why prices would change.
Its also worth noting that inflation only happens like that when demands cannot be met. IE fixed quantity of goods that cannot grow, being demanded more and more over time. That is not how basic necessities work at all. If you increase the profit margin in almost any food crop or raw material by a few fractions of a percent you see dramatic investment in sating that demand because its an extremely safe profit center.
Why do you think nothing would change on the supply side? There are plenty of low income workers that would quit their jobs, driving their wages up - thereby either driving up the cost of goods or reducing supply. Unless of course the goods are shipped from nonUBI countries
Good point, I hadn't considered those second order effects.
There are plenty of low income workers that would quit their jobs, driving their wages up
I don't think we have enough information currently to unequivocally state that. How many low income workers would quit? It's not like many people in better paying jobs reduce their working hours up to a point where they make the equivalent amount of money as a UBI. How many currently unemployed people would be picking up the slack?
thereby either driving up the cost of goods or reducing supply.
Labor costs are a small part of the price of basic goods. I couldn't find much good information, but e.g. [1] says that for fresh fruit and vegetables a 40% increase of labor costs amounts to a 4% increase for consumers.
On a first moment, possibly. After that, we would see how free the market really is. If it's reasonably free, the market will self-correct and prices will decrease.
A thought experiment: you have a business; now everyone has money; then prices rise "together"; so market distribution remains the same; you decide to reduce your price to the old price and your competitors don't. Now you get customers from your competitors that you didn't have before.
The amount that this happens depends, naturally, on how free the markets involved are (if free at all).
Trillions. That's what's currently going around in quantitative easing. That's why many are calling for QE for the people. Instead of giving money to financial institutions, give it directly to the people.
You loan 1T to the poor one year and get paid back 1T from the rich the next from all those poor spending money on goods the rich sell.
UBI isn't like defense spending. It isn't a black hole you put tax dollars down and get nothing out. It means tremendous goods demand for the necessities of life that is extremely stable and reliable for businesses to profit off.
No offense, but defense spending is exactly the same as what you describe. It's money that goes to hundreds of thousands of workers that spend it in the economy.
Unlike (some) defense spending, UBI doesn't intrinsically create some economic value. Increased stability would indirectly create economic value, but it needs to be more than the face value of the UBI check for it to not lead to gross inflation.
Presumably, the amount given could be on a sliding scale, where more wealthy people receive less money, but I'm sure there would be challenges to such a system.
Personally, I'd love an extra 1k / month, but I rather see that go to a lot of other people before me.
It would not be an extra cost. It's just distributing money differently.
Most people would pay $1000 more taxes per month and get it right back as $1000 in BI. The benefit would be that if their income suddenly fluctuates, that $1000 would be there as a baseline.
I like the idea of basic income but I confess that my ideal of a basic income recipient is someone akin to the 19th-century amateur scientist subsisting on a private income whilst making original contributions to human knowledge, and, as a side effect, to society.
Whereas the reality of people receiving free money might be somewhat different. There's the drip, drip welfare payments of just enough money to survive without being motivated to find a job. Then there's the fallout, family break-up and chaos that occur in the wake of a lottery win. Both morally questionable.
Or perhaps there might be a settling down period of people acting irresponsibly followed by a recognition that engagement with the problems of civilisation and survival doesn't end because one has food, shelter and internet. There are novels to write, structures to design, problems to solve and of course there's science to be done. Work is more fun than 'fun'. Pick something worthy of your talents or start the slide into mental disorder and addiction.
Whatever the truth it almost goes without saying that a study alone cannot sort these issues out. Perhaps it can help. But in science experiment is insufficient there has to be theory to go with. (This is a major reason why so few studies in medicine and psychology are reproducible. I assume in sociology too.) What makes it more difficult in this case is there are moral components which can't be assessed empirically, only by conjecture and criticism.
It means putting 99% of recipients, or more, into illustion which will result in nothing but a severe depression in a few years. Suddenly being able to contribute to the world in a 'larger' way, they will quickly realize that they can't - just as many startup founders. Maybe, need to meet the bills by mind-numbing work is really a blessing for most people - i had stable income almost without work for years and i got very, very depressed.
I disagree that everyone would be depressed. Cityfolk probably but they deserve it because they will be the ones voting in ubi. They will also be the ones starving when us country people start only making enough food for ourselves and spend our days at the river drinking beers and fishing or hunting
Having to work to survive keeps people engaged with reality and I think this may explain why people in the past and in developing countries today seem to be at least as happy and mentally resilient as modern westerners, maybe more so. In spite of hardship, disease and early death.
Whereas many of us spend our limited freedom chasing pleasurable (and unpleasurable) illusions that lead only to disorder and despair. That said, there are plenty of sane, wealthy people in the West who do important work for the sake of it, because they wish to. How do more of us become like them?
Also, despite apparently comfortable conditions, there are plenty of survival problems which remain. For example, meteor strikes, super-volcanoes, cancers, toxic ideologies/religions. Plus an unlimited number of as yet unidentified problems.
These problems are more abstract than working for a pay packet to buy food but they are nonetheless real. And they are not being sufficiently addressed! Universal Basic Income could turn out to be an important breakthrough in this regard, I think, if we also address the question I posed at the end of paragraph 2 above.
Whereas the reality of people receiving free money might be somewhat different. There's the drip, drip welfare payments of just enough money to survive without being motivated to find a job.
That's why I always clarify that an essential piece of Basic Income is that it is unconditional. Whether you're on the bottom rung of society or the top, employed or unemployed, basic income should be the same amount.
When the choice to get a job changes from "Well I'd lose my benefits" to "Well my basic income is no longer enough, I'll work part time", then state welfare no longer becomes as much of a trap. It can finally make strides towards lifting people out of poverty.
If it isn't unconditional and universal, it's just welfare under a different brand name with the same inefficiencies and rent seeking political problems.
Certainly not. Any UBI policy has to be set for a universal basic standard of living in a contiguous zone of free movement. US citizens can live anywhere in the US - UBI reverses the current bubble of housing prices that is concentrating people in cities that then resist increasing density and thus just drives property values to infinity. It lets people who don't want to live there the option to move elsewhere that is much cheaper and thus lets them live off the UBI.
Trying to peg UBI to regional cost of living costs an incredible amount of money (the cost of living in the Bay Area has to be at least 10x the rural Rust Belt) and has practically no benefit (because all it means is people get the privilege of living wherever they want on redistributed money, rather than choosing to either live where they want and seek the means to afford it or living where its cheapest and costing society less in macrospect.
This is, by the way, another reason UBI is a Utopian fantasy: It’s impossible to imagine an elected government resisting the temptation to fiddle with the formula to achieve policy goals and reward constituents, just like today’s tax code.
There would be an industry overnight that would pop up to help people migrate where cost of living is affordable on a UBI because that is an insane amount of dependable profit to be made. It would be as simple as "your first month pays the move, and every month after that is last months rent payment".
There already exist communities and retirement homes whose entire agreement with its residents is "give us your social security checks, we give you food shelter etc". If you know constant money is coming in, arranging your business around being super easy to use for that money is a very lucrative opportunity.
I think the parent comment I was replying to was more concerned about the situation where we have UBI without full automation. In which case there may be a push for jobs not yet automated to be split into part time positions. If society really feels like keeping people employed is a moral good in the face of increasing automation, then there may be pressure to increase workforce numbers and reduce working hours. Especially possible if UBI can close the gap and maintain a safety net.
In addition, full, 100% automation doesn't seem likely to me. Service sectors of the economy may simply keep smaller human staffs in order to keep their hospitality atmosphere. Not enough to offset job loss in other sectors, but there are already plenty of businesses today that have a human element that don't _actually_ need them. It might even look like a luxury business model. No reason that will go away just because robots can do it better.
There is already sizeable group of have independently wealthy people with inherited money. If we look at how many of these people behave in different wealth categories, it might give a clue.
If it's determined that money makes lazy and that's moral hazard there should be really high tax for inheritance.
Correct me if I'm wrong, but doesn't UBI operate on the premise that it's replacing many of the existing social programs? For example, unconditional money rather than food/housing assistance. If the participants of the study also get access to these things, doesn't that severely limit the usefulness of this study?
Also, $1k/mo is pretty small. Are you just hoping to observe some behavioral changes at the margin with which to extrapolate?
There seems to be a common bait-and-switch tactic performed by proponents of UBI, in which they mention UBI as a replacement for social programs when talking about affordability, but back away from that assertion when questioned about how to handle (for example) recipients that spend all of their UBI on drugs instead of food.
I see that as a societal symptom instead of a personal failure. I would rather a person spend their time playing videogames* instead of being stuck working dead-end jobs until the day they die.
*Drugs are a different issue, that should be treated as a health problem and dealt with accordingly.
We handle them exactly as we do now... by doing nothing. Today's social programs don't give people more money just because they spent all that they were given yesterday.
It's universal INCOME, not universal "take care of all your problems for you".
That's the end game, certainly, but having guaranteed income and additional programs doesn't hurt the experiment.
The idea is you can help pay for UBI by cutting the then-superfluous programs. But the benefit for people is in having the unconditional safety net, not in having access to only one program.
In the end, though, isn't that just an observation of how people behave with marginally additive wealth transfers? Shouldn't we have enough people who chose the annuity option of a lottery or had an unknown trust bequeathed to them to adequately study this phenomenon? I thought the real idea to be tested would be to take away the $1000/mo section 8 house, and instead give the recipients $1000/mo, and just see if they can more effectively use that resource.
Also, if we're making the usual assumption a UBI is intended to replace [most] needs assessment of state benefits, we need to test how people respond to having $2500/month value in various state cash and in-kind benefits replaced by $1000/month in cash (with the difference pocketed by people hitherto deemed less in need of support)
Basic Income is often proposed in conjunction with cutting basic social services & welfare payments, thus achieving a net gain for the government. This seems to make it attractive to both the neoliberals and the neosocialismés, but I believe this is a terrible mistake that will have the exact opposite effect to what its supporters intend - there will be more poverty and debt slavery, not less. (Methodology debates aside, I generally think both sides want people to propser & be happy).
My proof is by example through thought experiment: I'm a grad student who has a bicycle accident. Without free gov healthcare I now must go into debt to either the hospital or a lender (medical purchases are just one example of an essentially non-negotiable expense). Perhaps I already had other debts, but somehow now my interest payment + living expenses payments are more than my basic income, otherwise known as the normal life of a grad student in todays society anyway - in my case BI didn't work. This is just one example of how easy it is to slide back into poverty with such a system, it could occur slower and over a few generations but sooner or later poverty is back. We just pushed the goal posts back a little bit.
Instead I believe we should leave our dealings with money to the marketplace, but should definitely act as a society to provide a good life for all citizens by seeing that their basic needs are met. Make free public housing that all citizens have a right to ask for. Provide basic but nutritious food to the populace, for free. Encourage free markets and capitalism, but see that the basic needs of every citizen are met - and perhaps a little power in the marketplace i.e. money is also a basic need, but its still only one of many. "If they didn't already exist, people would think public libraries were the most radically extreme socialism".
For these reasons, the growing popularity of BI is worrysome to me. It's just neoliberalism made pallitable by a once-in-every-few-generations wealth transfer.
If you strip out all the regulations in healthcare all it takes is one preexisting condition to make healthcare runaway expensive for a majority of people.
Most UBI proposals include universal healthcare because healthcare is a problem best solved when everyone is in the "insurance pool" automatically. As long as the hippocratic oath exists and doctors have to provide life saving treatment it will always be in our macroeconomic self interest to incentivize people to seek healthcare before its life threatening.
"it could occur slower and over a few generations but sooner or later poverty is back." But, if the UBI is set to a percentage of GDP, then as overall wealth increases, the wealth of those depending on UBI increase. In the past few generations, ex. since the 1950's, real GDP has grown 6x [1] while the population has only doubled [2], meaning the real wealth of our society has grown three-fold in "a few generations".
I'm not sure that it gives good incentives to have it directly linked to GDP. I think it would make more sense to have a circuit-breaker type provision where if GDP increases by more than x% the amount increases by y%, but I doubt we would want to decrease it immediately when GDP decreases, since that has the potential to cause a runaway feedback loop.
That's really smart. I hadn't even considered that and was naively operating on a default assumption of increasing GDP. Especially during a recession, adjusting the basic-income downwards with GDP could create a devastating runaway feedback loop. I think as you wouldn't want the economy to grow faster than basic income, though, in the circuit-breaker-style implementation as GDP increases by more than x%, the amount should also increase x%, by default. When the GDP is assessed, say annually, it should only increase or maintain the current basic income rate. In the event of an unprecedented long-term decrease in productivity, the congress should be required to take action to lower the payouts.
But, if the UBI is set to a percentage of GDP, then as overall wealth increases
That's an extraordinary assumption. The majority of nations in fact do not see routine, much less significant, overall wealth increases. Major economies as varied as Germany, Mexico, Russia, Britain, Japan, Brazil - have seen near zero economic growth for the last decade. The US appears in fact to be starting a protracted stagnation of growth, due to its extreme debt (in most every regard from public to consumer to corporate), resulting in problems similar to those experienced by Japan due to its egregious debt problems (low productivity gains, weak or negative income growth, weak or negative real wealth gains, low GDP growth, etc).
UBI can't be implemented in a nation in which population growth is falling rapidly (fewer workers to carry the tax burden), while debt is already sky high, incomes are stagnant, and existing entitlement system IOU's are already set to bankrupt (either directly via default or indirectly by currency debasement) the government (with already dire perpetual half trillion plus dollar deficits with the public debt soaring toward $30 trillion next and annual deficits set to climb toward a trillion dollars).
Make free public housing that all citizens have a right to ask for.
Median rent in the US is $934 thus this one benefit costs the US goverment as much as this proposed BI would. Unless we are talking about housing where people aren't which is likely a non-starter for a slue of reasons.
UBI isn't expensive. Its wealth redistribution, not consumption. Military spending is a black hole of money - you get very little R&D or productive GDP growth yields out of it but it stucks hundreds of billions out of the country every year. Social security is better than military spending but usually worse than UBI - recipients of social security are some of the richest people right now as an age class, so transferring wealth to them often doesn't see it stimulating economic growth - it just gets reinvested. Additionally, social security taxes are not progressive - they cap out, and anyone making any money over 10k is paying into them. Its a regressive tax scheme that takes money from disproportionately the working poor and moves it into a richer age group.
It still isn't a black hole, though. A ton of social security money is then spent on essentials. Its much less wasteful than defense spending.
On the other end of the spectrum is a lot of infrastructure spending, especially big projects like Eisenhowers national highway system that built the interstates - money goes in, but the productive gains and economic stimulant from the spending is greater than the money going in so it is a net positive for the economy. I'm hesitant to even call that government spending or debt or the cost of the state since it doesn't really cost anything - you are using money to make money. It is state investment.
Now, of course, state investments have variable success rates. You can look back at successful projects and say they were obviously worth doing in hindsight because they have produced substantial prosperity. The highway system, the national railroads, the panama canal, national electrification, the Hoover dam, etc have all proven valuable. But often a bridge built or rails laid go unused and were wasteful. And then there is the matter of how bad the government is at keeping these projects within sane budets - Boston's Big Dig took significantly longer and cost multiple times more than initially projected, and that brings the value into question after its done whereas beforehand it looked obviously beneficial.
UBI I think is in a very optimal spot on that spectrum. It is immediate wealth redistribution, going almost exclusively to the poorest who per dollar earned spend the most of directly stimulating economic demand that grows the economy most optimally. But unlike infrastructure investment the return is immediate - as checks go out money is spent often same day, and as long as money is moving from slow growth (investment) to fast growth (consumption) its a net benefit to the economy, as long as said benefit is greater than the overhead of administrating the taxes to fund it and the distribution of the money. Which comes back to the infrastructure is great scenario - its great until you are being wasteful and corrupt in spending on it. If money is actually going to building infrastructure or money is actually going to the poor it is a colossal boon. When money goes into private pockets as it does in spades with the DoD it is wasteful. It isn't the amounts you take, it is how you spend that, and how predictable your spending and taxing will be going forward - markets can handle very high taxes as long as they are predictable.
>Military spending is a black hole of money - you get very little R&D or productive GDP growth yields out of it but it stucks hundreds of billions out of the country every year.
I am no fan of the military and I agree with your premise, but I would strongly, strongly disagree with the "little R&D" portion of this comment. A great deal of technology we take for granted today was first made available due to the military taking on the huge reverse asymptotic cost curves of early adoption and invention of new tech.
The military is an inefficient and potentially immoral R&D department, but it is not one that generates very little. A quick historical look at what has come out of the machinations of war and preparing for it will illustrate the point, and fast.
In terms of R&D for dollar spent, the military is awful compared to fairly parallel state institutions like public universities and NASA. If you want R&D, you shouldn't do it indirectly through researching ways to blow people up and murder - you should just do R&D spending.
A lot of the problems when discussing the military budget are intentions. Nobody is proposing to grow or keep the current scale of the military on the idea its a valuable source of research. It is in the same vein as how you would not fund a basic income for research purposes - surely a lot of valuable R&D would actually come from a UBI by letting more people experiment as a hobby, but you wouldn't use it as an argument for making a UBI because the research per dollar spent ratio would be awful compared to dedicated research institutions.
Funding CERN et al is on the order of magnitudes more bang for your buck if you are spending money to advance science than spending it on a military.
Which relates back to my original point. All government spending needs to be interpreted through one of two lenses - either the government is absorbing an absolutely unavoidable expense and using its scale to lessen the burden (infrastructure maintenance, healthcare, retirement) or it is investing money with the intent for it to improve the country. There is absolutely a lot of overlap, but we are back at intents - when healthcare makes your citizenry healthier more often so they can be more productive that is a nice perk but does not come close to justifying public healthcare spending. Infrastructure can fall into both camps - building last-mile roads is absolutely not in all likelihood going to grow the economy - people would live more densely if not for state subsidies on public housing developments hooking into the public road network. But when they build highways to increase traffic throughput that is almost always with intent to grow the economy.
A UBI falls in both camps, but conservatives should focus on the later benefits. The economic growth potential. On the topic of the military budget, anyone arguing for the current scale of the US military is arguing for a "necessary expense" perspective, not an investment one. Because its investment value is atrocious. And in general people are very skeptical of anything suggested to qualify for the first camp - and we should always be skeptical of those expenses, because they are the legitimate expenses where government spending actually contracts the economy.
UBI doesn't need to cover the median cost of living in the US. In fact with just income tax that is an impossible line to hit as it would certainly trigger inflation.
But that doesn't mean that X dollars won't matter. In fact that is the entire purpose of this study "If we give people $1000/month, what happens?". Sure it isn't representative of what would actually happen with BI but if the study is done well and its findings are sound through review, then it would be a great way of answering "would that amount of money matter".
You're right - it serves both conservative and liberal ideals, which is a good thing.
but I believe this is a terrible mistake that will have the exact opposite effect to what its supporters intend - there will be more poverty and debt slavery, not less
My proof is by example through thought experiment: I'm a grad student who has a bicycle accident. Without free gov healthcare I now must go into debt to either the hospital or a lender (medical purchases are just one example of an essentially non-negotiable expense). Perhaps I already had other debts, but somehow now my interest payment + living expenses payments are more than my basic income, otherwise known as the normal life of a grad student in todays society anyway - in my case BI didn't work. This is just one example of how easy it is to slide back into poverty with such a system, it could occur slower and over a few generations but sooner or later poverty is back. We just pushed the goal posts back a little bit.
Two arguments against this. The first is that you are comparing a steady income with an insurance. You can always spend your BI on insurance. Wether insurance would be more expensive if you had BI or not, has not been proven in this model, but it could go either way.
The second is that BI in that tought experiment, even if you eliminated insurance-type nets, would still yield lower poverty. Its just not the exact same people. That is one of the hardest problems on any social welfare program: if you need to improve everyones position absolutely and relatively, you basically cant do anything. You have to let some lose for others to gain.
The pathologies of income schemes that cause all of them to be degraded and cancelled build up over time as people adjust to the new scheme and work out who is failing to reciprocate.
What we need are guaranteed jobs at a guaranteed living wage, paid for by the state working for the public good. Then private businesses finally have to compete for labour and that maintains the wage share.
People need something to do where they can be of service to others. Not paying off and left to rot.
Given that the discussion is a research proposal to test basic income as a concept, rather than focus your comment on dismissing the concept of basic income (which it's worth noting is totally fine to do but isn't relevant to the thread), why not propose changes to refine the study so that it may more effectively assess whether basic income is viable?
You would need a small nation state to run the experiment with its own currency and limited natural resources (as in, it can't just sell oil and distribute profits like Alaska).
It would also have to be very librial about borders and illegal immigrants to simulate the US.
I would suggest the minimum size of this nation should be around 15+ million people.
It should be noted that the parent is basing his conclusions on Modern Monetary Theory[0], a heretodox economic theory in which fiscal policy is unconstrained, deficits aren't relevant, and a country is always able to spend.
MMT doesn't model fiscal policy as unconstrained in real terms, only nominal terms. And given the legal authority, of course a sovereign issuer is always able to spend. In this case spending is merely typing digits into a computer. This fact doesn't imply deficits/debt "aren't relevant", but rather deficits/debt work very differently for the currency issuer as opposed to the currency user.
At one of our dinners, Milton recalled travelling to an Asian country in the 1960s and visiting a worksite where a new canal was being built. He was shocked to see that, instead of modern tractors and earth movers, the workers had shovels. He asked why there were so few machines. The government bureaucrat explained: “You don’t understand. This is a jobs program.” To which Milton replied: “Oh, I thought you were trying to build a canal. If it’s jobs you want, then you should give these workers spoons, not shovels.”
Disagree, basic income is equitable distribution of a collective legacy of increasingly advanced tools and a necessary recognition of limited natural resources and duty to share a small portion to every human being on the basis of birth into our society, aka social contract.
Your abstract 3rd-party justification from a distance fails to note the rest of that sentence:
"Overall basic income is theft from workers and will be seen as such by those workers."
When enough of those producing wealth decide that UBI = theft, they aren't going to just continue producing without pushing back. Personally, if UBI is implemented, I will "go Galt" and move to a self-sufficient homesteading-style life, leaving any cash-requiring activities (like paying taxes) to my $UBI/mo check. That I am a productive person does not mean my productivity will necessarily be taxable; I grew up in a live-off-the-land family, and would be happy to return to that lifestyle if you're going to just take a big chunk of my income just to give to others.
There are enough jobs (yes, there are). Wealth is not durable (you eat a hamburger, $1 of economic wealth turns to *). Encouraging idleness by funding it is an unsustainable economic strategy, because so many people find paid idleness a desirable lifestyle.
because so many people find paid idleness a desirable lifestyle.
You're close, and it's an easy mistake to make since it seems intuitive. However, the reality is that people find THE IDEA of paid idleness desirable. Small N, but everyone I know who has found themselves in that position has only remained idle for a very short time. Productivity quickly returns, although not in the form of trading time for money.
I believe you but that is anecdotal. I know people that not only want to remain idle if their basic needs are taken care of but currently do, and have been doing it for decades.
Like most human traits, there is a wide degree of variance. As such there is no doubt in my mind UBI would allow a greater number of idlers because it would be more easily available. Just as it would allow more people to trade a job they don't like for a constructive activity they do.
While I actively help the poor, it frequently appalls me how many of them choose to live that way. Basic needs met, a significant percentage find no reason to do more than watch TV, eat, and reproduce. Hence my comment elsewhere on this thread lamenting that Y Combinator, having focused on financially assisting the hyper-productive, have lost comprehension of how much of society is populated by those that only produce because they have to for survival; supply basic survival, and they do nothing.
(I'm not saying that about all poor, but the fraction thereof who are is significant.)
I'll grant you that you've found a clever justification for stealing from producers. The question is what do you do once the people who are generating the value no longer agree?
The ever shrinking % of people who can viably trade labor for wages will have to count on a robot army to cleanse the world of undesirables. Either that or you pay people to dig holes and fill them back in for moral value?
My tin-foil theory: The poor are no longer able to purchase consumer goods as their entire income goes to their basic needs. With the middle class being pushed to the poor class, this will have devastating consequences for our consumerist-based economy. Thus, BI is nothing more than recession prevention.
A huge part of what makes basic income appealing is that it is unconditional and guaranteed. Otherwise it seems like it would create unsafe levels of government control.
For many people, BI would end up being a large portion of their income, such that losing it would be catastrophic. Now those people would become beholden to any government demand made on penalty of revoking BI.
If a government enacts unconditional BI in the year 2020, who's to say they won't change their minds in 2028 and make it conditional on good behavior?
Are there any mechanisms that could make basic income a true unconditional guarantee?
Are there any mechanisms that could make basic income a true unconditional guarantee?
Maybe a government backed cryptocurrency? One that distributes the BI through some sort of immutable smart contract? Lots of problems with the approach, but maybe we can solve enough of them.
Now, whether our current governmental or political realities would ever give up control in that manner is another story :(
Social security income is indispensable for the majority of pensioners now. It used to be only for day laborers who it was understood never had an opportunity to save. Things have changed for sure.
Similarly, most old people wouldn't be able to afford their healthcare if it wasn't for Medicare, even it they never even filled out a Medicaid application.
They could make it a constitutional amendment or whatever your countries mechanism for codifying founding documents is that requires more than a simple majority to make law.
You could e.g. require a national poll for any change to the BI. Or it would not be introduced nationwide but per state or even communal so individuals have more control over what happens.
1. People given Basic income and minimal addictions will fair best
2. People without basic income and minimal addictions will
fair second best
2. People without basic income and addictions will
fair third best(drugs, major alcohol, internet/game)
4. People given basic income and addictions will fair worst(drugs, major alcohol, internet/game)
I'm probably completely wrong. 3 and 4 could be switched in which case Basic income would be always better.
My general premise is giving people with a strong addiction money without some kind of life structure is a bad idea.
Please don't down vote me if you disagree. Please just comment on how you disagree.
Makes sense but I still imagine addicts with UBI will fair better than people with addictions under the current system.
It's _way_ easier to be a functional addict if you have financial stability. The real problems with addiction (crime, disease, etc) start to compound when you can't afford the habit.
I do see a lot of existential crises occurring in people born under the current system who transition to a UBI lifestyle. Probably less so for those born into UBI.
That sounds awfully static. The interesting thing will be to see if people with unconditional money end up becoming addicts at higher rates. Are the study researchers planning on making the data openly available? Is it going to be cash payments, or will it be some sort of debit card where the researchers can track whether people are spending money at grocery stores, or at casinos?
My bias is that inherited wealth passed down down through the traditional family structure remains the greatest guarantor of multi-generational financial prosperity and stability. Even a single member of your immediate extended family attaining professional status as Doctor or Lawyer results in a higher probability of entry to the middle class for the entire family than any other indicator.
The big question proponents of Universal Basic Income must answer is: does direct stimulus of aggregate demand result in real growth? Is risk de-incentivized when a labor market participant is not required to work for marginal increases in "happiness"?
Taking our current central bankers experiments with quantitative easing (and now, perhaps, quantitative tightening) as a proxy for injecting liquidity into the system I think there is at least one evident result: bubbles forming in even the unlikeliest of places.
In any case, full support for YC's experiment and can't wait to see the data and results. Best of Luck and thanks for your vision and efforts!
One interesting thought, maybe, would be, as robotics/automation takes over and grows, is to introduce special automation tax from which BI could be partially (or fully?) funded? Maybe ti could alleviate some of the inflation concerns.
Start small. Give very adult citizen the same fixed amount. Deduct that amount from existing welfare payments.
We now have a guaranteed universal Citizens's "Basic" Income, albeit at a very low level, paid for by taxpayers via the normal progressive tax system and which primarily helps the working poor.
Iron out all the inevitable implementation problems.
Then raise the level to the minimum level for welfare payments and remove a swathe of bureaucracy.
Observe the results while gaining a sensible Welfare System based upon "From each according to their ability, To each equally, with neither favour nor discrimination".
I think peoples choices in a situation like this will be wildly different than if there was a government provided basic income that was available forever, or at least had the appearance of being available forever. Having extra money for a couple years doesn't let you permanently exit the workforce in the same way a permanent basic income would.
As well I think for established people with kids and other commitments 1000 isn't nearly enough to get by but there is a real danger that for young adults you give them this option of completely checking out of society if it's available forever. Rent a cheap house with friends, smoke weed, and play videogames sounds like a pretty decent option to a lot of 18 year olds. Or even younger maybe? When can kids legally drop out of high school?
I really think basic income is a bad idea. I don't think we are anywhere near the point of mass replacement of the entire workforce with robots/ai even in the developed world. Forcing people who are working to pay into a system that lets people contribute 0 to society while enjoying a decent life(24k for a couple/roomates is completely livable in many parts of US especially without a car) is both unfair and likely to cause significant social strife between workers/non-workers.
I really think a basic livable wage with the removal of the minimum wage is a far better solution. Set some minimum livable wage based on 40 hour work week and have the government top up wages rather than incomes. Obviously there would have to be some sort of progressive claw back system to encourage people to find better paying jobs and not just go with the easiest thing available. Maybe have the government act as an employer of last resort creating some busy work cleaning streets or repairing roads.
I really think it's important for people to have something to do when they wake up in the morning and to be contributing members of society. Not only out of a sense of fairness for the people that are working but I think it is incredibly unhealthy to not have any responsibilities in life.
Rent a cheap house with friends, smoke weed, and play videogames sounds like a pretty decent option to a lot of 18 year olds. Or even younger maybe?
I suspect a lot of people here don't appreciate this because they (and many of their friends) have a much different mindset. But I can easily see a lot of that sort of behavior and then, ten or fifteen years in, they decide they want something more out of life, start a family, whatever. But now they're 30 years-old with no skills, never having worked a real job, minimal education, etc. Pretty hard to do a reboot at that point.
I suspect you haven't met many of these type of people.
They spend a couple of years doing that, get bored and get on with enhancing their lives. The biggest stoner/gamer I knew is now an extremely well paid city guy. I lived in a dead town and the extended 100 or so people from my age group that I knew in my teens and twenties, a large amount of whom spent a lot of time gaming/smoking, now occupy a huge variety of positions in society across the country (and some the world) in their 30s. I can actually only think of one person who's still a bit of a waster.
Most people actually want to have a good life and you and the parent are simply snobs who don't know the sort of people you so condescendingly talk about.
This research, to me, seems to be ignoring the biggest open question of UBI. All tests to date have looked pretty good, but have only been done on a micro level. The fundamental issue one really needs to answer for UBI is the macro scale effects.
As a society, if we were to redistribute trillions of dollars without commensurate economic value being directly created, we'd expect to see large scale inflation.
Money is a complicated subject, but essentially it represents a transfer of a future scarce resource. For commodities, the cost is essentially the sum of labor to generate it (either to mine the raw resources, build the factory, discover the technology, etc).
If no economic resource is being added to the economy, then you are just devaluing money. That is usually very regressive, and in this case could be made worse by people slightly reducing their economic labor because of the extra income stream. I could see this leading to a bad cycle, where any economic gains due to increasing UBI are later undermined.
Anyway, it would be nice if UBI worked, but I've seen no evidence that it will in a large system. It would be nice to get confirmation of previous UBI studies, but this research proposal is likely to just generate the same data, without addressing any of the open fundamental issues.
Let's assume some sort of Basic Income is enacted. A standard livable amount for all adults, that will scale with inflation, and even with number of dependents.
Some people will still work. Will still pursue hard working jobs that contribute to society, that push our capabilities as a species forward, and add value (important). But think about most of the world and people that you know...I'd imagine that on average, people would elect to not choose to - for lack of a better term - "work hard" to boost their income if their basic needs are covered. Some folks would just love to let others take the wheel, and enjoy their netflix and soylent in peace. This needs proof of course, but I believe that's an assumption we can make for sake of discussion.
Now...we all know that automation is coming. Already we see many of the tasks that humans depend on for survival and prosperity being done faster and more efficiently with artificial intelligence and robotics. Things like harvesting natural resources, agriculture, production of goods, and even building infrastructures. The responsibility of these tasks is shifting away from the people, and into the hands (clamps?) of specialized machines.
So, assuming 1) we have individuals who are having their needs provided for, but not making a measurable contribution to the survival of the species/system and 2) we are trending toward automation and hyper optimization for all the processes that we depend on for survival...when do AI and/or algorithms start to find that certain people are not worth being provided for? Who manages these systems? Someone that we elect? An artificial entity?
I'd honestly love to hear others thoughts on this. I know I would rather fight and claw for survival than pray to someone that they don't choose me to shoot off into space.
It happens a lot where people make this jump from autonomous machines to sentient machines. It isn't a small gap. Going from domain learning and genetic algorithms to develop solutions for a hardcoded task to sapience is a huge leap.
It won't be accidental, or at least come out of nowhere. We should be able to see it coming even if it will come out of evolving algorithms. There will absolutely be intent in constructing intelligent artificial life.
Enough for what ? Eating ? Maintaining a family house that is not residence of your children anymore ? Having a car ? Covering additional health expenses ?
Really like the idea of basic income. However, after living in the real world as long as I have, I know all it would do is raise rent by exactly that amount, everywhere.
Will this research enable conclusions about the macroeconomic effects of UBI? It seems like it'd be difficult to predict how national and international markets will react to an entire country suddenly receiving a UBI based on a study of only a few thousand people.
I think a better direction would be if YC Research could figure out a process to growth hack a new high density city from scratch instead of everyone crowding into physically constrained existing city. Make YC entry conditional on relocating to somewhere besides Silicon Valley/San Francisco. Maybe somewhere in California (Redding, Modesto) so you have the same rules/regulation as in California but with minimal earthquake risk, plenty of land and existing water resource
Maybe even do something like the Amazon second headquarters RFP.
The idea that UBI will wipe away the ignorance and cultural dogma that keeps poor people poor is absurd.
How many lottery winners hold on to their winnings?
Let's be realistic. If you give the uneducated poor free money, the only thing that will change is how much money they have to spend on junk food and dated electriconics.
UBI as a policy in a place like the U.S. is hopelessly niave. Our culture of poverty if the typical culture of ignorant poverty. I speak as someone who lived among the poor-hell, in high school I dated two women from the same trailer park, poverty in the U.S. is about getting mine, and often times about getting one over the man.
These aren't temporarily downtrodden future intellectuals. These are people who haven't understood education or work for generations. But, on the other hand, who are we to claim our culture is superior?
The idea that UBI will wipe away the ignorance and cultural dogma that keeps poor people poor is absurd.
No one is saying that.
How many lottery winners hold on to their winnings?
Not relevant.
Let's be realistic. If you give the uneducated poor free money, the only thing that will change is how much money they have to spend on junk food and dated electriconics.
That's the point. UBI isn't welfare, it's not meant to rehabilitate people and make them into workers. If most people who get UBI choose to live off it and not work, and remain poor, fucking great, that's the whole point of the program, to reduce the working population down to those who actually want to work as there aren't going to be enough jobs for everyone and many people would choose not to work if they could.
You just really do not understand what UBI is about, not at all.
We tentatively plan to randomly select 3,000 individuals across two US states to participate in the study: 1,000 will receive $1,000 per month for up to 5 years, and 2,000 will receive $50 per month and serve as a control group for comparison.
Couldn't they research and study people who already don't work for a living? I mean those who already own capital and don't expect the government to steal some for them?
1. The money involved is voluntarily donated, not confiscated from taxpayers - an essential difference between tax-funded vs charity.
2. 3000 recipients is vanishingly small on a state or federal level. When everyone gets their monthly $UBI check, supply-and-demand dictates that "free money" will be duly devalued, with prices of low-end essential goods/services rising to match (say, basic rent rising to $1000/mo).
3. Many who currently produce wealth to make ends meet - paying income-scaled taxes included - may very well be enticed to "go Galt" by seeking a self-sufficient lifestyle where $UBI/mo covers all cash needs without one having to get a job per se. (I find this option quite attractive.)
4. Old aphorism: "tax what you want less of, subsidize what you want more of." UBI implements/enforces this by punishing the productive and rewarding the idle. Yes, some people will use the opportunity to do laudable activities - which won't necessarily contribute to the economy. Yes, some people will use this to bridge current welfare-to-work transition issues - which are better handled by narrowly fixing that bridging problem without having to involve the entire population. Yes, more people will wonder why they're pulling other people's economic weight, and consider the merits of humble low-income living.
5. I realize Y Combinator is in the business of giving money to people to encourage productivity. Methinks they're too used to working with the rare hyper-productive, and don't grok how many people are quite content with low-cost no-effort zero-productivity living.
When everyone gets their monthly $UBI check, supply-and-demand dictates that "free money" will be duly devalued, with prices of low-end essential goods/services rising to match (say, basic rent rising to $1000/mo).
At first glance this seems intuitively correct, but I'd encourage anyone reading this to control+f my username in this thread for arguments showing otherwise.
I did, and found your arguments wanting. You're conflating local with national behaviors, and conflating high-value goods/services with low.
Take a low-income area and give everyone $1000/mo for no reason (they're not trading any local productivity for it), and rent & other basic costs will immediately rise accordingly. "Move!" you (and I) say - and the limited supply of inexpensive rural housing (matching UBIers' lack of need for jobs) will likewise rise accordingly, as the market of renters just vastly increased. Over time, low-end housing supply may increase, but now you've a market of homes which rather pointedly do not have jobs nearby - you've just created communities of people absolutely dependent on UBI.
you've just created communities of people absolutely dependent on UBI.
This will be the result of the steady march of automation displacing the human workforce regardless. Furthermore, the lack of a UBI system in a high unemployment due to automation scenario would lead to complete collapse of the market economy.
We went thru "displacing the human workforce" in the Industrial Revolution. Don't worry, we'll create more low-skill jobs - just like we did back then.
...unless legislators continue prohibiting people from working if they can't produce enough value per hour. Minimum wage is "debtor's prison" redux.
There's plenty of low-skill low-value jobs I could hire people to do, regardless of technological advancement, if only regulations weren't so oppressive.
Fighting the minimum wage is a political dead end. People won't vote for that, since they believe people who work a full week should have a decent standard of living. That's the case in Australia, at least.
In practice hardly anyone believes people who work a full week should have a decent standard of living. If people actually believed that, then no one would purchase goods manufactured in Mexico, China, etc. Instead, it's more accurate to say that people don't want the inconvenience of actually seeing poor people.
Self-interest overrides politics in this case. Forcing employers to pay more is also likely to be preferable to helping the low-paid in a way that involved raising taxes.
Also, self-interest is involved in maintaining the minimum wage, since people may imagine that if wages are dragged down at the lower end, it may pull them down at higher levels too. Minimum wages in other countries don't matter, since they have no intention of working in those countries.
Do people care if wages are higher than they should be, according to supply and demand, and causing some underemployment? Even economists don't seem to agree on the effect of minimum wages. Generally, I'd guess people want more pay for themselves, up to the point that they genuinely fear their own unemployment. It seems that both employees and employers prefer to keep wages a bit over the equilibrium level.
I guess this is the usual "hate the game not the player" situation. I wish there was more local products. I'm willing to make sacrifices and vote with my wallet to make that happen. (And I do when it's a realistic alternative) But I can't do that naked - and living in a smallish town, I'd be surprised if I could buy a full set of clothes here which is not produced in China/India/Pakistan/Thailand. (Without going a few hours to the nearest city)
Yes, everybody who works full week should earn enough to make a living. The fact that I'm wearing a t-shirt made in China is mixed up in this in complex ways, but it doesn't change my position.
3. Many who currently produce wealth to make ends meet - paying income-scaled taxes included - may very well be enticed to "go Galt" by seeking a self-sufficient lifestyle where $UBI/mo covers all cash needs without one having to get a job per se. (I find this option quite attractive.)
I also find this theoretical aspect of UBI quite attractive - the potential for a lot of self-organization into self-sustaining communities of scale in rural, low cost of living areas.
Yeah, these "tests" of UBI always seem to be about the attractive side, people getting money for nothing, and never about the funding side.
With a large-scale UBI in practice, you'd also have the effect of higher taxes that would claw back the UBI from those who have jobs, as well as an additional amount to cover the UBI for those who don't work.
I still prefer a job guarantee scheme for dealing with under-employment. This gives anyone who is willing and capable of working the chance to earn the minimum wage, and hopefully gets some productive benefit in return.
3000 recipients is vanishingly small on a state or federal level. When everyone gets their monthly $UBI check, supply-and-demand dictates that "free money" will be duly devalued, with prices of low-end essential goods/services rising to match (say, basic rent rising to $1000/mo)
No, that's not what “supply and demand” says. With normally-shaped supply curves, you would expect priced to increase but not so much as to prevent a net increase in what people who are net beneficiaries can afford.
I can't wait for UBI. I have a six figure income, but I'll quit the moment I get UBI, move into a tiny apartment and then spend the remainder of my days happily reading library books.
Can't tell whether serious or sarcastic... If sarcastic, I'll take your point to mean that people already doing well in life are not likely to give up the trappings to go into UBI-funded early retirement.
If serious, look into ChooseFI, the FIRE community, etc. It's totally possible to self-fund the transition from your current lifestyle to the one you're describing.
In real UBI implementation, is it considered taxable income?
Core to UBI is that since everyone gets UBI, and since I pay substantial taxes, I'd pay a minimum of $UBI in taxes and simply get it back as a UBI check for a net total of $0.
BUT... If that's taxable income, I have to pay (say) a cumulative 33% on that additional "income". Instead of a net $0, I have to pay something like $4000 in additional taxes. WTF?
We tentatively plan to randomly select 3,000 individuals across two US states to participate in the study: 1,000 will receive $1,000 per month for up to 5 years, and 2,000 will receive $50 per month and serve as a control group for comparison.
Is this a joke? This may as well read: "We'd like to research the effects of Universal Basic Income. We tentatively plan to select 300 individuals from opposite sides of a freeway: 100 will receive a free roast beef sandwich, and 200 will receive a pack of airline peanuts and serve as a control group for comparison."
UBI costs 1- to 2-million dollars PER HEAD to simulate. You can't cut corners on this and still expect to get relevant data. Not only are you not getting the data you want on how UBI would affect human behavior on the scale of a lifetime, you're also totally ignoring the greater sociological impact and resulting economic impact.
The 5-year span is too short to impact human behavior, the 1000-person headcount is too small to observe any greater sociological or economic impact, and the source of the funding (willing voluntary participants interested in UBI) means we're getting zero data on how the public would feel about being forced to fund this.
This research addresses literally none of the strongest arguments against UBI.
Maybe this is cynical, but I think they might already know all of this. They're just doing it anyway because they know a horn offering 5 years of free money will get their blog a lot of attention, and they know the results of this "research" will be biased toward the pro-UBI result they already want.
I guess we can all look forward to decades of liberal arts majors citing the outcome of this research as if it means anything. It's really unfortunate too, because these are the issues that really matter.
People spend all their energy arguing about race and sex and abortion and gay marriage and cops and who gets to use which bathroom, but nothing impacts human prosperity (and suffering and death and peace and war) the way macroeconomics can. That's when policy gets real and impacts people on a scale with a lot of zeroes on the end, and when enough people are misinformed about something like this, it has the potential to take humanity down a very dark path.
Congrats to the ycr team on the progress and accomplishments to date.
I must say after reading through to the full proposal, I was a little disappointed it doesn't include much that stood out as different or "disruptive" or "new" as I would have hoped given that it has grown out of YC. YCR has definitely done some cool things and is moving very quickly and again congrats on the successes so far.
Maybe other things are going on behind the scenes that were not included in the proposal and are not on the website? I couldn't help but get the impression while reading the proposal that this sounds like a proposal that any ol' well-funded private foundation could have come up with, and unfortunately I fear the study will run into the same problems those other private foundation type studies run into while in progress and once completed. What a waste and shame if that happens.
I fully understand there are limitations to these studies, and rules to play by, and there are many working components as these studies grow bigger in scale and touch more people and must interact more with the government and press then research teams kind of need to become more risk averse and CYA a lot more. But couldn't there be a secondary smaller research studies going that actually try new and interesting UBI research and try to answer some of the harder questions UBI faces as well as look harder at some of the multi-sigma rare events (pros and cons) of UBI that could happen.
Also I want to commend YCR for what looks to be a legit "people first" research approach. I wish more policy type researchers follow your lead and think about how people might be affected or not affected as a result of policy instead of just making assumptions based on big macro numbers changing and then trying to change those numbers.
Again no offense, but this study feels like similar studies: Get some smart brand name Phd's, spend a lot of money and spend a lot of time to get data needed to calculate some "results" numbers to support a policy idea or two. Great, these "results" will end up in some random think tank type policy articles and papers that government representatives have thrown their way every day by various lobbying and advocacy groups. These results will probably make a few good buzzworthy headlines on various news and "pseudo" news sites from NYtimes down to buzzfeed. Great.
Headline: "A new large UBI study just showed xyz positives happen under UBI but there's a couple exceptions...".
This is a lot of money and time to run a study you know no matter how successful it is what UBI naysayers will still have tons of ammunition to complain why policy shouldn't be changed yet or at least not dramatically. What then? Another 5 year study?
Cool story bro. Good studies that lead to good policies do 2 things: 1. They show evidence of doing the good thing they are suppose to do. 2. They shutdown most or all of the things the other side is using to prevent the policy from passing. This study is not doing enough of either, especially #2.
Are you guys studying things like: The psychology of people once UBI is more common and less stigmatized not just the psychology of getting unconditional money? How to pay for it? Seriously here. What will the uptake rate be? Will the first years pull down tax payers into UBI before re-adjusting and they return to work. What are you really shooting for here? 20% 33% 50% feeding back into the payer loop? What tactics might groups or business use to reverse or combat the psychology on UBI, what will be used to take advantage of people who suddenly have money and no restrictions on it? Hello more MLM schemes? Look at Norway news this week and their SWF, don't make that mistake.
I realize you have aggregation problems and methodological individualism stuff and what not. But start a moonshots division in YCR please. Good luck.
Will there be travel restrictions? (if someone is receiving this money, do they have to stay in the same city/country, or can they move?)
What age ranges will be included in the study? [I found the answer in the report: it's 21 to 40]
Is there a control group that won't be interviewed regularly? I'm more motivated when my boss talks to me. Requiring people to meticulously manage their time will already bring a productivity boost.
What about controlling for the end date? My contracts last for 1 year at a time. If I suddenly knew I'd have a steady income for 5 years, that would be a huge relief, and I'd change my lifestyle accordingly and settle down (e.g. be able to plan to start a family). That feeling is independent of the amount of money, it's just the stability.
My first feeling is that living with basic income will be similar to retirement. (and there's a lot more data about what retired people spend their time doing).
Robot tax. Fund basic income on the basis whereby every job that is replaced by automation, a tax must be paid by a company with more than 1000 employees.
Given the skew of poverty in the USA to black and latin populations you might want to consider hiring several full time people on to the team and leadership who can bring the understanding that can only come from being part of those communities.
Otherwise this can be attacked as being dominated by rich white people. While the intent is clear the execution needs to match the targeted end users.
You may also want to consider the efffect of health care. In other UBI environments free healthcare is a given. In this experiment healthcare costs can easily cripple the impact of the regular income. Control for that by providing health care insurance, or make it two experiments by doing some with and some without. If that doesn’t work maybe consider doing this experiment in another country.
I'm somewhat doubtful of the design as it's explained in this blogpost, seems like there will be lots of treatment externalities. I'd really recommend anyone who's interested read http://cega.berkeley.edu/assets/cega_research_projects/1/Ide... for an explanation of why a totally randomised control trial is the wrong choice for things like this.
1k people getting 1k a month for 5 years = $60 million. At the end of the day, an expensive group. Really impressed by the ambition here, and hope for great success for the project.
Basic Income research will be vital in the future when it actually becomes a genuine piece of public policy. Although I have little faith it will be used effectively by politicians/decision makers.
I too am impressed by the scope of this effort.
I hope it provides some meaningful and insightful data either way, though I'm partial to a positive result from this effort.
impressive, but i feel like this is why we invented computer models and have technology (maybe) to start returning immediate results.
We're basically saying here that $60M (plus the other group) is better spent to see what weights to give to models to see how UBI scales-up rather than spending it to run a full gamut of Test Cases through the models and figuring out which outputs to motivate people to do with the money.
I mean, why are we spending money to figure out what people will spend the money on when we can already envision all the possibilities. Or am i wrong, and no one has modeled this yet??
How do you model a population's (or even am individual's) innate preferences and behavior when their income patterns and ability to spend change? You're essentially describing the economic calculation problem.
[0] https://en.wikipedia.org/wiki/Economic_calculation_problem
Sorry for being negative but as someone who is paid for desingning and conducting experiments I have to say that this experiment is very poorly designed. (Many of the flaws have been discussed here and at previous occasions, no need to repeat them.) The fact that they are spending $60M on this makes me sad. So much great research could be funded with this kind of money.
What does this mean? Is it going to be 5 years or not? Will different participants get it for a different amount of time? Will they know when it is going to stop?
That’s a hugely important piece of information. Granted, if it is assured for any length of time it’s practically much more assured than the usual job.
From the linked proposal:
"We propose two treatment arms, one of which will receive the basic income payments for 3 years while the other receives a 5-year guarantee."[0]
[0] - https://static1.squarespace.com/static/599c23b2e6f2e1aeb8d35...
I hope many of the study participants are living in a low COL area. If the $1000 per month covers most if not all of your expenses it gives someone a much greater opportunity to pursue something the can really improve their life rather than just a nice boon on top of their current income. Of course, this is more of an "I hope this improves peoples' lives" rather than considering how best to design the experiment.
hey! elizabeth rhodes, the basic income research director at ycr, is keeping an eye on this thread and will reply to questions if you have them.
this is not a question. i know there are tons of those that say no to basic income (just glance the comments here), yet if i was eligible (different country) i would have applied right away and quit my job. i have a few side projects and some of them just weeks and months away from release, i could return the money with interest if things go as planned (maybe a contract). banks are aggressive, i can not ask my family, kickstarter and similar are too visible, ventures are so noisy and my goals and the respect for the people in general not aligned with them. this would be ideal because it is quite relaxed. here you go, an ideal setup!
So obvious question on many minds, "Where do I sign up for the free money?"
Also, will it be randomly selected or will the selection criteria factor in cost of living, current financial situation, education, etc?
And where is the potentially $66 million dollars for this coming from?
EDIT: On their FAQ[1] I found the answer to my first question:
[1]: https://basicincome.ycr.org/faqs
It says in the quote that you quoted that it will be randomly selected individuals across two states. ;)
I meant the split between $1,000 or $50.
It's not clear (to me at least...) if the randomness applies to choosing the original 3000 people selected to take part in the study, the bucketizing of them afterwards into 1000/2000 groups, or both.
So how do we lobby for our state?
YC probably has the contacts to find $66m of philanthropic cash. Though if you wanted to find out whether UBI is a functional improvement on current systems as opposed to whether people like receiving free money from the SV elite, you'd need to test the funding system by raising taxes by much more than $1k per month on all the higher income recipients and eliminating most govt benefits for the lower income recipients. Of course, you might find fewer people willing to participate in the study then.
Curious as to how the control group monthly amount ($50) was decided upon. Was it basically an incentive for those selected to participate?
I would speculate yes. (1) You want subjects in the control group to be incentivized to maintain contact with the researchers throughout the study and be willing to spend time answering their questions. (2) Whenever feasible, you want all subjects in a research study to be better off than not participating in the study. (3) It also controls for some minor confounding effects like "gets in the habit of going to the bank monthly and cashing a check".
I wonder if it has anything to do with the $600 1099 floor.
Staying below that might encourage under-reporting on taxes; staying above that gives the researchers pretty reliable addresses and SSNs from participants.
At what point does the government controlling your income start to impede personal freedom?
Wouldn't any politician campaigning to increase the basic income be almost automatically elected?
Economists largely consider payments like this to be the best way to enact policies. It gives people more options instead of trying to control through legal pressures.
That's not true at all, and in fact, the last time a large number of economists were surveyed about a proposal, the response was overwhelmingly in opposition: http://www.igmchicago.org/surveys/universal-basic-income
Many economists would agree that, ceteris paribus, cash is "better" than an equivalent amount of earmarked money in most situations, because cash is more flexible. But that's a very narrow statement that isn't applicable here, because it's assuming that the set of people receiving the money would be the exact same (it's not, by the definition of "universal"), and it's also assuming that there are no other external consequences to the proposal (another topic which is, at best, debatable). So even that point of agreement among economists isn't relevant to this proposal.
Citation needed (from both of you).
I can't talk to the claims about economists but I can tell you that Friedman and people across the political spectrum agreed that this was good public policy. https://www.theatlantic.com/politics/archive/2014/08/why-are...
The way that question was worded was a straw man.
I’m referring to a general principle regarding transfer payments. They’re usually more simple ways to reach a desired outcome than alternatives.
Yes, and I'm explaining that that statement isn't true (in the sense of consensus among economists) in any way that is applicable to public policies. Certainly not this one, because that's explicitly not a dichotomy being proposed - there's no tradeoff being proposed between the $1000 stipend and all of the other forms of public assistance that the participants could be or are receiving.
It's only true (in the sense of consensus) on a micro level, looking at the value to an individual of cash vs. in-kind payments, ignoring secondary factors, ignoring externalities, and ignoring positive or negative feedback. That's not a relevant framework when discussing public policy.
Two thoughts: I'm nearly positive that basic income means _part of_ "your income", and not "your income".
The intent of basic income I have read about is to increase the personal freedom and provide a flexible safety net for the poorest individuals. And for personal freedom I'm guessing you can take or leave the basic income -- but none will because it's money right?
And about your second thought, you could use evidence for politicians elected based on their promises to raise or lower taxes -- which is essentially an income increase or reduction (for various income subsets of the population).
The freedom is freedom from immediate starvation. Rather than be forced to work a crappy job just so you can eat, you have more freedom to pick and choose your employment, spend time on education, work on art, or whatever.
Is everyone currently clamoring to elect politicians that want to increase welfare and other "Great Society" programs?
People aren't clamoring to increase welfare because the people whom it's perceived to benefit aren't the ones who actually have the largest voting power.
People absolutely do reward politicians for securing funding for their constituents, usually in the form of earmarks, targeted tax breaks (e.g. disaster relief, geographically targeted bailouts), and stipends. In fact, it's one of the strongest predictors of support for politicians representing smaller districts.
Only at the national level (ie, when running for president) does it become problematic to be perceived as having spent Congressional funds on your own district, because the new constituency includes people who had their money "taken away" in order to provide those earmarks.
I don't think richer people would think that the government giving $1000 a month to everyone would see that as benefitting themselves, there's your opposition to increasing BI or having it at all. And I don't disagree with those last two points.
Huh? No, the point isn't what the richest people would think - they have an incentive to oppose either welfare or cash handouts. The point is that currently, welfare only targets the people with the lowest voting power, because they're both a very small bloc and also a bloc that doesn't vote very consistently in the first place. So there isn't a huge political incentive to increasing welfare.
As soon as you make that a handout that targets everyone (or appears to target everyone), you've suddenly put the largest voting bloc - those who are neither very wealthy nor on welfare - in a position where they will start to clamor to increase it more and more, because they'll see that as money flowing towards themselves.
I don't think I said richest...
Also I don't think it's hard to see how this thought would come about (not saying I'm advocating it). But there are plenty of ideas that would help society in general (lower college tuition) that many Americans are against whether rationally or irrationally.
If you fail to see how the American public would have a negative reaction to some kind of redistribution of wealth I think you should think about the average American's reaction to the idea of a socialist politician.
That's not it - I'm not saying that the American public wouldn't have a negative reaction to "redistribution of wealth". I'm saying that the American public has a negative reaction to "redistribution of wealth" when they don't think it benefits them. In other words, they're generally fine with wealth being redistributed from other people to them, which is most evidenced by people of all income levels usually (though not always) being on board with federal money coming in to their district. This generally takes the form of federally-funded infrastructure projects or targeted subsidies.
I'm using that to explain why people in between welfare-level poverty and comfortable wealth would have a different reaction to a stipend that (they think) is coming out of other people's tax dollars than they would to current welfare programs (which [as they perceive] don't benefit them).
You're still free to seek out other sources of income under these models and the amount recieved from the government effectively decreases as income is raised due to taxes you pay into the system.
No, lay people would be quick to confuse this with communism. The irony of it is that this sort of a system was one of the few things Keynes and Friedman agreed should be part of public policy.
Milton Friedman did not say that this should be part of public policy, though his words are commonly interpreted very generously to imply that he did, by people who wish to demonstrate that this is a policy with "conservative support".
What Friedman actually said is that the cash value of all welfare and other support systems is greater than the in-kind value. That's a pretty narrow statement. In theory, that sounds like it's a statement of support, but it's really not. In practice, basically nobody is actually proposing doing away with all welfare, social security, government subsidies, etc., because it would be a political non-starter. Even if we scope this discussion to the context of the YC research experiment, that's plainly evident, because there's no stipulation that the participants abstain from all other forms of public assistance, as well as deduct the cash value of every other stipend and subsidy that they receive from the $1000 payment.
Comparing what Freidman wrote about to this proposal is like trying to discuss Adam Smith in the context of the political left, on the basis of the common term "liberal". Yes, there technically exists a frame of reference in which that's a meaningful comparison, but it's not a particularly useful or relevant frame of reference, and it does nothing but mislead and obfuscate the actual details of the underlying facts.
At the point where they start to put back the conditions we have around welfare today. Or at the point they start to treat us the same way employers treat us today. Sure, for a time, it may become impossible to have a runaway defense budget, might even indirectly make going to war less appetizing, certainly would decrease petty crime and the expense that comes with this.
Here's a more in depth version of the proposal https://static1.squarespace.com/static/599c23b2e6f2e1aeb8d35...
It answers many of the questions people are asking here.
Wow. Looks like they'll spend a lot of money for this research. Congrats to everyone involved!
I thought basic income was about a time where AI would take most of the jobs, and everything would be far cheaper thanks to automation. I cannot understand how it'll help you not work in the current world.
Because working part-time might not be an option for many, even if they are ready to forgo the money. We also have not built that automated world yet, so although $1000/m certainly helps, it is still not enough to pay for a comfortable life in the US.
Maybe someone more informed on the subject can enlighten me.
For what I know, basic income is not about allowing people to not work, but instead, push people to work by allowing them to take risks by trying to work in a field they actually want to work.
Starting this wood-carving artisanat shop that you're insanely good at looks a lot more promising when you know you'll have a bit of money to eat at the end of the month :D
A huge hope of defensors of basic income is that it may pay itself by the economy boost it gives, and won't just add $1000 to every rent bill in the area !
Because it is not meant to "help you not work." It is meant to ensure a basic minimum whether you work or not. It is also not meant to "pay for a comfortable life." It is meant to prevent you from starving.
For the sake of argument, however, as you say, going part time is not an option for many people. For the lowest paid jobs, on the other hand, going full time is often not an option. The jobs at the bottom tend to be part time with no benefits and no guaranteed hours. These are the people who will be most benefited by a basic income. If they are additionally stuck in a hostile work environment, the basic income may give them enough cushion to quit the job rather than hanging on just so they don't starve. It may also give them enough money to take time off work and go to school in order to earn a slightly better income. And, if they are laid off through no fault of their own, it may allow them to eat until they can find another job.
So the first steps to a basic income are capital controls and a VAT, right?
I wonder how long it will be until USA is ready for that stuff.
Don't most states in the US already have sales tax (which is effectively VAT by another name)?
How will the 1000 a month be treated in a fiscal sense? I have close to no knowledge about the US tax system, but I would guess it has some impact.
Also, will be interesting to see the difference in results from this study to ones done in countries where healthcare is free or subsidised.
The effective tax rate an individual would face depends on how much income an individual derives from other sources during this time in addition to the basic income, along with their household demographics (number of children, marriage situation).
By itself with no other income sources the individual would fall below the US federal poverty level[0] by $60 and would likely qualify for some Earned Income Credits[1] as well as subsidized health care.
Adding children or a spouse (especially a working one) will crank the tax rate up or down.
Then there is an entire universe of tax complexity having to do with credits and penalties an individual or family might face.
[0]https://aspe.hhs.gov/poverty-guidelines
[1]https://en.wikipedia.org/wiki/Earned_income_tax_credit
Are the results of this feasibility study publicly available?
Yes, you can go and read about communism and how 100s of millions died while it was being implemented
Basic income is not the same as forced equality. I do fear that basic income will only result in hyperinflation, but it's hard to effectively estimate the impact without actually doing some trial run.
That gave me a serious chuckle. It was so unexpected. Thank you.
Please don't take HN into ideological flamewar. It never improves things, and is always the same.
The site guidelines are specifically written to guard against this: https://news.ycombinator.com/newsguidelines.html
Really awesome to see this coming together. 2 q's - how was the $1,000 per month figure calculated, and will you be deploying in a small, low-income, isolated community where local inflation might occur, a large metropolitan community, distributed randomly across the 2 states? Interesting problems to consider in this study design!
Found the answer to my sampling question: "As described above, we will select areas for the study by taking a stratified random sample of Census tracts in large regions within the two states where median household income does not exceed the area median income. After sampling tracts, we will randomly select addresses within tracts from USPS DSF (a sampling frame of all addresses). We will screen selected addresses for eligibility, ultimately enrolling no more than one percent of individuals within a Census tract. We may use available administrative data eliminate as many ineligible households from the sampling frame as possible to cut down on recruitment and enrollment costs, but we are examining the reliability of this data during the pilot. We are contracting with a survey research firm with extensive experience fielding national studies to assist with sampling, manage recruitment, and conduct in- person enrollment and baseline surveys."
To my thinking it would have been interesting to study the possible inflation effects (treat the isolated community as representative for the whole country) but I'm sure there is a good reason/past research for structuring the sample this way.
You know this might be speculative, but I feel like a basic income applied to a national allows that population to act more like an ant hive. In the sense that only 3% of the population is actually doing the real hard work, but this is a healthy paradigm, and is much better than forcing individuals who shouldn't be doing the work they currently are to pursue things they actually care about, such as taking care of loved ones, or some creative pursuit. Jobs such as these don't pay much, but are equally valuable to society.
A lot more video games will be played
As a game developer I'm 100% okay with that!
Much better than, say, working the TSA, a jobs program based on invading privacy under the ridiculous exaggerated thread of terrorism. I WISH those people would just stay home and play video games.
Maybe more twitch streaming, or more elite gaming as a result? I find that whole economy rather strange but then I remember that a lot of "work" these days is just shuffling imaginary money around.
Maybe for a year. Then people will want meaning in their lives and would seek meaningful productive things to do that they want to do.
The reason people right now love gaming so much and often to an unhealthy degree is because its an escape from a life they don't like living but have no choice in because they are chained to a job to survive.
Yeah, for a lot of people living in Azeroth is still going to be more fun than living off 12k a year. Entertainment is made to be addictive, none of those dynamics you are talking about are going to change.
I would speculate that any end date on this scenario will invalidate results. What a person does if it is guaranteed a job for life vs 5 years is wildly different, as you'll need to make sure when those 5 years are up, you'll be ready to enter the job market again, etc. I believe the same will happen with basic income. If we want to study where people gravitate to more fulfilling jobs, feel happier and so on, you need to guarantee them that stability forever. Otherwise people will just rationalize that they got some free money for a while and will not behave in the same way.
If the government guarantees a basic income, you're really only guaranteed (at best) until the next election cycle. Just recently, seven years after its passing, the ACA was nearly reverted, which would have kicked millions of people off government-subsidized health insurance plans.
Also, similar to the ACA, individual states can attempt to block the roll-out.
That's why I have approximately 0 faith in the pension plan my government(s) have in place. I'll save for my own retirement so I'm not high and dry when they mismanage the funds or change policies or whatever.
While it is less likely, nothing is guaranteed. You assume your investments will be around until you cash them out for retirement, and they are all dependant on something not failing:
* Direct stock ownership depends on the company growing, not failing, not being bought out, etc. * Mutual funds depend on the fund manager not going under / properly managing assets. * Bonds depend on state institutions honoring them. * You can't really save for retirement in a bank because their rates of return are below inflation. You lose money in banks. * Hoarding fiat is obviously bad. * Any asset you would try to store long term is subject to market volatility at the least and potential obsolescence at the worst. You simply cannot guess what anything will be worth decades from now.
The current US administration knows full well that throwing tens of millions of people off insurance will probably cost them the disenfranchised working class that elected them in the first place and lose them their majorities in congress and the presidency. I fully expect them to stab themselves in the foot with this, since a lot of monied interests benefit from the absurdly inefficient default state of healthcare where many people depend on emergency rooms for all problems, but in the same vein repealing social security would destroy their voting base unless they made it a grandfathered in shutdown where the next Democratic administration could just reinstate it and nobody on benefits would lose benefits.
Err, no. This is not a risk of properly structured mutual funds. The manager does not directly hold assets - they make decisions about what to do with the assets, which the custodian executes. And the fund's management has no recourse to the assets held by the custodian. How the fund goes under is if the assets they hold go to zero value.
There's still execution risk, though, which is why passive management is ideal. I'm pretty sure VTSAX can successfully hold a market-cap weighted mix of the 3600 largest US firms pretty much indefinitely. The risk is that the largest US firms stop being generally profitable, like what happened in Japan.
Which is also _another_ reason UBI is a terrible idea that is bound to fail.
In the case of BI, I disagree. Politicians will see this for what it really is -- the most direct way to buy votes (by promising increased BI). It would be quite popular with both parties, I'm sure.
One party's platform is built on the fear of socialism - they will most definitely oppose this and use it to get votes, but by egging it publicly.
If we're living in a world where BI is a reality, it will be embraced. Once social programs are implemented, they're nearly impossible to remove -- see ObamaCare. Republicans have given up on going back to the old system and have, well, embraced a tweaked ObamaCare under a new name. They'd do the same with BI.
"Democrats promising $30K BI? Well we're gonna do $35K!"
This is circular logic. In order for BI to become a reality, it first must be embraced. In order for BI to be embraced, it must first be a world where BI is a reality.
You keep referencing ACA, but there is currently a new bill to repeal it: https://www.lgraham.senate.gov/public/_cache/files/06822f49-...
The argument from the parent posts rely on ACA being repealed already. If the ACA does get repealed then the above arguments hold but this hasn't happened yet.
My point is that bringing up the ACA repeal is moot, either way, because it's repeal is still active and not finished.
No, in order for BI to become a reality you just need a Democrat majority to pass the legislation.
The irony of course being that all the existing social programs which are "nearly impossible to remove" will have to be removed to fund the BI.
BI is the opposite of socialism when it's coupled with dismantling certain pieces of the social safety net. We don't need WIC or CHIP if we have universal BI, for example.
That depends on a great deal of factors, I think.
Even if we guarantee some sort of income floor, there will still be those who, despite that guarantee, need additional assistance. Whether it's because they have more children than the average, are irresponsible with spending, are victim to a drug habit, unexpectedly lose their jobs, or succumb to medical debt, we have to come to grips with the idea that UBI won't be a cure-all.
Even if we acknowledge (and not all will) that most people who are dependent on safety-net assistance are perfectly good and responsible, depending on what the amount is, what their life circumstances are, and a myriad other factors, I don't think we can take it for granted that UBI obviates those specific-purpose programs for the remainder of those who need assistance and for whom UBI is not ideal.
Put bluntly, there are people who will take the entirety of their UBI check and spend it on stupid things, and end up without money for food, or for their childrens' health. What are we to do about them?
Yes, BI involves dismantling certain pieces of the social safety net to replace it with a social safety net. The party that opposes wealth redistribution will oppose BI.
I think you're confusing the GOP's motivations and their rhetoric. See also: their failure to repeal the ACA despite having the presidency and a majority in both houses.
That's because the GOP isn't a party, it's a coalition of bickering factions that has chosen to prioritize winning over purity. (As opposed to Democrats, who prioritize purity over winning.)
Odd, I would have flipped that statement.
Tbe republican party like UBI if it comes with a reduction in welfare programs. Its the democrats that have to be convinced.
Pensions are a great use-case for smart contracts. I would feel much safer having my retirement assured by a blockchain than a bureaucrat.
How would this work? As I understand it pensions are almost never fully funded when they begin because the costs would be prohibitive. Can a smart contract guarantee that funds that are not available now will be made available at a later date?
It wouldn't work, almost nothing people want to do with smart contract can actually work because those people tend not to actually understand what a smart contract is or what it can actually do and what it can't do. Virtually every smart contract proposal is DOA due to a misunderstanding of their nature.
What's missing from your claim is any justification for it all. You're just claiming, on zero authority, that it's not possible. So enlighten us.
Why do you think it's impossible to encode the mechanics of a pension in a smart contract-based system?
I didn't need to, the comment I replied to already addressed a valid why. Smart contracts can't enforce access to funds without locking the funds up from other use, and that's not how things work in the real world. Pensions aren't savings accounts where funds are locked up ready to be used in a black box. They can't interact with the real world without trusted oracles, but we already have that in the real world and they're only real use is when they can do something deterministic on chain. In short, they're largely hype without a real problem to solve... so far.
You're just claiming it's impractical today, not technically infeasible for any reason.
1. Pensions don't currently work like this
There are many thousands of different pension systems across the world.
It stands to reason that you could create new system, and if it had significantly attractive advantages, people would use it.
2. Trusted oracles are a problem
Yup, we need more decentralized services that smart contracts can take advantage of. Wait a few years, they're coming.
3. Smart contracts are only useful for deterministic changes
Making deterministic change is precisely what you want. Do you mean statically defined? Because that's obviously not correct. And are you considering a new system specifically designed for pensions?
Virtually all innovative technology is "hype" until it isn't. I agree we have a ways to go.
To the extent they are funded, that money could never be rescinded. And you could negotiate early funding as a feature now, because it would actually mean something to the recipients. There are no untrustworthy promises required.
And you could do new things based on control of your pension, which might radically change how we think of them.
The main thing that smart contracts remove is the need for trust. And that's the main problem with pensions.
Better yet, one could have completely private pension plans, where everyone is safe from both bureaucrats and kleptocrats.
Congratulations, you've just invented the IRA.
It's not completely private if bureaucrats tell you what you can or cannot do with it, as well as when you may do it, stealing from you if you step outside of their rules.
Completely private accounts are called savings accounts; governments aren't telling you what to do with your money, they're telling you what you have to do in order to avoid that money being taxed, IRA's offer you a benefit, that benefit isn't without strings. Smart contracts offer nothing here you can't already do easier.
Using a broad definition of theft merely serves to raise the noise floor. Your definition of "completely private" seems like "free markets" or "perfect competition": that is, things which are free from government interference only in misanthropic delusions. As Jefferson explained, stable ownership is not a natural concept; that you are considered to "own" things absent direct physical possession is a function of society. We also collectively agree to believe in this thing called 'money', which is also not an inherent property of mankind. That society can dictate rights and rules about property is inherent to the concept of each.
The "smart contract" is still reacting to things in the real world. It's not going to magically cause the stock market to not fail. And, as we've seen, they are vulnerable to hacking.
It doesn't magically solve all problems, just the most important one. Trust.
How?
You don't have to trust anyone with access to your pension not to steal from it, because no one has access to it.
The promise that is your pension would be cryptographically enshrined in a blockchain, with full transparency.
That's... that's not really true. For one, we've already seen how these "smart contracts" can be hacked. I can almost guarantee that they will put something in them that will allow them to take the stuff back.
And that hasn't really explained how the funding would be there.
Actually, the fact that it hasn't been unrolled completely yet without backlash is a testament to how angry people are when you try to take their protections away.
They'll have to train and prepare to enter the job market again? That's terrible!
If you’re attempting to study how a Basic Income would affect its recipients, then yes. It is terrible. It completely skews the behavior of the recipient in a way that a lifetime BI would not.
Absolutely, and this is also the problem with every* other basic income study that's been conducted over the past few decades.
If you promise basic income for only 5 years, then I'm probably not going to quit my job and become an artist because I can't be unemployed for 5 years and expect to waltz back into a job. If you promise basic income "forever", then I'm far more likely to retire at 30 and plan to never work again.
* I believe this is the case, correct me if there are any I missed
This is why Patreon still makes a lot more sense for artists.
Or you've got five years to work a reduced schedule and see if you can "make it" as an artist.
Seems great, as opposed to just trying to make it while working full time.
Would you not work? Basic income is nearly not enough to access luxuries. Sure you should be able to live off it, but I think most people would likely want more, the difference from forced equality being that you can still work and keep that as luxury money.
Would they, though? That's the key question that I believe this study (and others like it) fail to address. Depending on the basic income amount, I believe it would be possible to live a fulfilling (if somewhat minimalist) life without needing to supplement that income.
I would want more. Currently I don't really care what I buy at supermarkets, I can go on 2 week holidays and potentially buy gadgets I like. However I can't really afford a car or buy a home or fancy synthesizers.
With BI I could spend more, but I would still keep on working towards a relaxing financial freedom where money is not a problem at all.
Besides a few monks, everyone I've met that makes under $20k/yr wants more. I've never seen a real area where people are comfortable until the $40k/yr mark. Yeah, I know there are exceptions (there's always outliers in data, but you can still find means and trends). So I am confident you wouldn't see a significant difference in number of workers unless you brought that UBI level up by several times the proposed $1k/mo.
I never understood that point. Almost everyone I know works fulltime although they could live a "fulfilling (if somewhat minimalist) life" on maybe 15h/week of work. If minimizing work would be a goal, most people would be able to do it right now.
Yes, this requires employer flexibility and the move from 40h->15h per week grants much less freedom than stopping work entirely but masses of people suddenly being content with a minimum amount of money does not sound convincing to me at all.
Haven't most studies around UBI shown that the only people that usually don't work when given a UBI are students and mothers (so they can focus on school and their children, respectively)?
Living off the basics is pretty dull. Most people who live ascetic lifestyles by choice usually come from a position of relative wealth and choose it more as an aesthetic or affectation than anything.
I think there are plenty of people who would be happy having a minimalist life, and there are those who would choose to see the world. And I believe that there are those who are drawn to doing things; working on stuff that they're interested in. And there are those who do want more stuff, and so will work.
All in all, I think there are enough people that things would be fine.
I agree. I think a lot would move to affordable places where that guaranteed income goes a lot further. If that's true then we aren't going to be as competitive on a global scale. Maybe that's not a big deal, maybe it's a huge deal; I don't know.
Anecdotally my friend is part Native-American and gets 4k/mo from the tribe's casino money and they're bumping it up more soon. She's chosen to be a stay at home mom.
The question really isn't whether someone person on Hacker News would want to work.
A better question would be, "how many would report their work out of an entire country was offered a basic income?" There are already data points for comparison, when that question is asked.
Most people on Hacker News are really not any different from anyone else in their country - they're just in a different line of work. The idea that you're a better/more moral person if you get paid more is a fallacy.
An interesting question is "can we reasonably automate things that people currently get paid less for than a basic income would be, or will we have to pay them more, and if we have to pay them more, what will be the economic effect of that?"
It may also work by making basic income really basic, so there’s an incentive to still go out there and specialize.
People on HN are significantly different and not even close to a representative sample. No one at any point is saying that HN readers are better or more moral, but there are huge, huge differences in technical skill, intelligence, knowledge, college attendance rates, social skills, empathy, and so forth compared to an average sampling of the population of the United States. I'll leave it up to everyone to decide which direction the arrow points in the above fields.
"The idea that you're a better/more moral person if you get paid more is a fallacy."
You are making arguments against things I never wrote, which is a strawman fallacy.
This is the problem with a lot of economic reasoning. The 'rational actor' construct works in toy models, but is much less useful in reality.
I took a couple years off a long time ago. I didn't stop working on stuff. Really, if you pay me, all that means is that I work on what you want me to work on, and maybe show up at particular times. It doesn't motivate me to work, it just motivates me to change topics.
I absolutely know people who would never work again. I know other people like me, who do it because they enjoy it. And details matter a lot, and tend to be ignored[1] by simplistic first-principle reasoning.
A big part of this is the ratio of those, and how quickly the number of jobs drop. I would fully expect this sort of thing to need tuning as it goes - I personally see the biggest change being a sudden explosion of people with lots of free time. Just as a tiny example, what does this do to the video game market? What about dry cleaners when fewer people wear business-drag?
Anyone who makes confident predictions based on econ101-style reasoning is simply dressing their politics up in an argument from authority.
[1] What does assortive mating look like under such a scheme - how much status will holding a job gain? Is the income set at an "uncomfortable" level, how will that change over time, what sort of barriers (class, academic, opportunities, etc.) will grow up around it? Are there any incentives to do something useful, even if it isn't what we think of as a 'job'?
Details really matter.
being time limited it gives you an actual hard value, so it becomes negotiable. I wonder if anyone will instead just use that to negotiate some credit at a favorable rate (say, 50k for those 60k) and actually start something greater than the expected subsistence.
Generally speaking, this would probably be the most efficient use of UBI: you trade it all away as soon as you exit college and invest it in something. I can see whole branches of financial and life insurance services growing out of this market.
Idea: what if they could hide from the recipients how long the program will take, while guaranteeing they'll get two years advance warning? Then for the first three years we might get something more representative of behavior on indefinite BI.
I do realize that by this point this would be hard to hide.
Also, leaks would eventually happen. Someone always knows someone who knows...
I think you are right but for the wrong reasons.
The whole point about Basic Income (at least the unconditionally one) is that there are not going to be any jobs (or very few and only for highly talented people). And even if there are jobs it will always be worthwhile working (as long as it's unconditional)
So if you, like me, believe that's the case, the whole discussion about whether people want to take a job or not becomes moot. It doesn't matter if they would have, they can't.
A much more important discussion then becomes how we make it work financially.
The whole point about Basic Income (at least the unconditional ly one) is that there are not going to be any jobs (or very few and only for highly talented people).
If there are no jobs, it will be because we designed it that way, not because it was inevitable. Tech giants proposing basic income as the solution to their lazy lack of desire to figure out how to better distribute work tell glowing stories of how lovely it will be for low paid workers to get this extra money. They never actually explore the scenario they are actually proposing that all you get is $10k-$20k and you have little or no hope of getting a job at all ever again.
That would be a dystopian nightmare and I think it is likely to end in bloody revolution.
Lots of hopeless people with nothing but time on their hands who are being completely fucked over by the system with no way out of this black hole but just enough money to keep eating well, even if they are living in a tent, sounds like a recipe for creating a well trained guerrilla army.
I wish it was that simple.
Technology isn't inevitable but to the extent that we wan't to reap the benefits of it is. In other word, we aren't designing anything other than our own replacements.
With regards to how SV tries to paint it thats a different discussion and have nothing to do with whether it will happen or not.
It doesn't have to be dystopian (ex. Post scarcity society) but until we get there it's going to be worse not better for a lot of people.
But I would challenge you to come up with an alternative that by and large at least compete with the reliance on technology.
The problem is that no specific part of the whole system is responsible and everyone in the system is more or less acting rationally.
So I fundamentally disagree it's not inevitable (with the above context considered)
But I would challenge you to come up with an alternative
Actually, I have. I was homeless for nearly six years until earlier this month. I am medically handicapped and can't work a regular job. I was a homemaker for a lot of years, I had a corporate job for a few years and I currently do freelance writing, resume editing and I blog, which gets me a little money via ads, tips and Patreon.
UBI will solve nothing as long as we do not have universal basic health care and affordable housing. If we establish universal basic health care and create sufficient affordable housing, then the last piece of the puzzle is redistributing work. We did this once before under very similar circumstances where automation was "taking our jobs."
It was called The Industrial Revolution. It gave birth to the 40 hour work week, overtime pay and unions.
If work is structured properly and you can get a cheap SRO or similar somewhere and not have to worry about medical bills, you can cover your basic living expenses working part time. If it is well structured where you work as little or as much as you want, then people who are unambitious hedonists or who have personal burdens, like chronic health issues, can just get by without it being a dystopian horrifying black hole that seems inescapable. Folks with more energy and/or more ambition can work harder and do more with their lives.
I have written a number of pieces laying out the details. Some are listed on this page of my old blog:
http://micheleincalifornia.blogspot.com/p/ir2.html
But I don't imagine you are actually interested. That "challenge" was most likely intended to mean "Shut up. It isn't like you have a solution."
You are assuming an awful lot of things about me. Why would I challenge you if I wasn't intersted in what you had to say?
You completely ignore that there is no need to structure work if I don't have to hire people to produce or develop my products. This is the whole point and why I believe you are fundamentally looking at this wrong.
The industrial revolution replaced physical work, this revolution is replacing intellectual work.
You are betting on some political/ideological/moral change in people, not actually addressing the points I was making.
And, yet, your out of hand dismissal fits very well with my assumption that you aren't actually interested in hearing a solution other than UBI.
I am not betting on a political, ideological or moral change. Whether we establish a UBI or go with something akin to my above proposals, these are equally political solutions. Neither will happen without a great many people working to make it happen.
The only question is what kind of future do we want? I think UBI makes no sense and will not work. Universal basic health care would be vastly easier to implement, if only because it has already be done in multiple other countries, so we have models to borrow from. Yet, people think that is a bridge too far and will not happen.
So, to me, the good news is that UBI is unlikely to happen and Gig Work is already on the rise, such as Uber, writing services and delivery services. The challenge here is just getting the word out that such services need to be a win-win scenario for both company and workers.
I am already living this reality. Gig Work has been an ideal solution in the face of a medical situation that makes a normal job not work for me. So, I know firsthand that Gig Work can be a terrific option for the worker if it isn't designed to screw over the little guy.
That can totally coexist alongside factories with very few workers. The rise of the machines does not have to be a terrible thing for humanity. The Industrial Revolution raised standards of living and quality of life across the board. There is no reason The Second Industrial Revolution cannot do the same.
But we do need to set that as a goal and work towards it. My only real concern is that, currently, some very rich and powerful people do not see the 99 percent as actual human beings. They see them as sheeple. And the solutions that grow out of such contempt tend to be self fulfilling prophesies that force powerless people into the narrative imposed on them from high.
What out of hand dismissal?
I am intersted in hearing actual solutions not wishful thinking based on the idea that humans decide themselves when we obviously don't.
If you want to argue that then I have already asked you how that would happen given the reality we live in.
Gig-work will also be replaced by technology either through digitalization or automation.
95% of jobs created since 2010 are temp jobs i.e. part of the gig-economy, that's obviously not sustainable as there isn't any rise in salaries while as I said the cost of living is rising.
So again unless you believe that technology is not going to take the jobs
I agree with you that tech giants promoting basic income are probably only doing that as an easy and attractive answer to - what will happen to all the jobs?
However, I really don't think UBI is the answer. I don't understand where the money will come from/who will do the leftover work. I think we should continue to cultivate an innovative society and new types of jobs - more appealing I think - will be created.
People that rich are used to solving certain things by whipping out their checkbook (so to speak). It may be superficially well meaning, but, no, I don't think UBI actually works. If they manage to get a UBI instituted, I think that is a case of the road to hell is paved with good intentions. But, the odds seem pretty long against it being instituted in this country at all. So, that makes me feel it is mere posturing.
I do a lot of "light one candle rather than curse the dark" type projects. I try to promote things that already exist (like gig work) that I think work. I do my best to get such info into the hands of people who seem hardest hit by the societal growing pains we are witnessing.
It can be hard to measure the results of such efforts and it can be outright impossible to prove to others that it makes a difference. But, I have had experiences* that convince me that it does make a difference, so I persist.
* http://micheleincalifornia.blogspot.com/2016/08/for-just-few...
But what are you basing that belief on? Thats what I would like to know. Unless you don't think computers will be able to do most of the things that create fundamental value in society. Of course you can imagine all sorts of services on top (prostitution, games etc) but the idea of the job market as something that we just keep creating new jobs for is simply not backed by reality.
What fundamentally new jobs have we really seen the last 100 years besides computer engineer and how many people does that industry actually occupy. As it turns out not a lot.
Everything else is just a more refined version of things that already existed in some form or another and rapidly being replaced by technology.
Which part of it? Not too many generations ago, many people lived entirely off the land. A large portion of people's "jobs" were displaced from agriculture and yet over time new jobs keep getting created. There are jobs that no one had even thought of that are now providing for the livelihood of many people.
Yes I believe there will also be new things that people want and new ways that other want to help them get it that will keep fueling the economy. There are things that are inaccessible to many people now that will become more everyday and "middle class".
No not at all. Of course I think automation can keep getting better but there are plenty of jobs that I don't see computers doing anywhere in the near term - building a house, paving a street, cooking food, being a nurse, being a garbage man, etc etc.
Um seriously? I know people who literally are "social media managers". I know people who sell eBooks for a living or do Youtube. I know folks who attempt to at least live off the music they make.
These are just "new" jobs that no one could have envisioned before. But think of all the greater demand there could be existing jobs. I have a friend in Fiji and apparently there nearly everyone has a housekeeper, even "middle class" people. There is a demand for stuff like that even in America - people keep pushing toward whatever improves their standard of living as long as they can afford it.
Technology is growing fast but its far from the only thing desired by people.
Which part of it? Not too many generations ago, many people lived entirely off the land. A large portion of people's "jobs" were displaced from agriculture and yet over time new jobs keep getting created. There are jobs that no one had even thought of that are now providing for the livelihood of many people.
New jobs keeps getting created simply because the markets have grown through population growth and globalization. If you look in the US out of all the new jobs created since 2009 95% of them are temp jobs not structural jobs. Temp jobs means that the job is being perceived as less valuable (no healthcare) than ex a structurally solid job. The actual market value of most jobs is diminishing. At the same time cost of living is going up up up.
The jobs no one have thought of are literally a drop in the ocean. They pay a few people very well while 90% don't make a dime on them. And they are only "new jobs" in the sense that they are about a new medium or technology. But fundamentally nothing new about them.
The problem with most jobs is that they don't actually require the whole human only a small part of the humans abilities. Unless you don't think technology can replace that function I have a hard time seeing where you get your view that it's not an actual problem from.
Technology allow you to be competitive which mean you need to keep investing in technology to be competitive. Yet income is actually declining and cost is going up.
Here is an interesting graph showing price change:
https://twitter.com/hnshah/status/909557796873662464/photo/1
How is that an illustration of things becoming more accessible? Unless of course you mean that TV series covers people fundamental needs.
No not at all. Of course I think automation can keep getting better but there are plenty of jobs that I don't see computers doing anywhere in the near term - building a house, paving a street, cooking food, being a nurse, being a garbage man, etc etc.
Yet there are already technologies doing that today. This will only increase over time.
Um seriously? I know people who literally are "social media managers"
Social media manager are just marketing people in another medium nothing new there. Selling ebooks is just selling books in another media. these aren't actually new types of jobs and it's a very very very small fraction of society who actually make a living from these. You can't live on likes.
The benefits of technology is desired by people and thats what matters here.
How many people and jobs are we talking about, if these are the jobs expected to support the vast majority of the populace? And on a related note, why would these people not feel resentful that (by necessity) a major chunk of their earnings is directed towards everyone else?
Assuming that humans will behave differently and be driven by different things than they have _for millenia_ is foolish, and why BI will never work.
Humans are part of a larger system, that system is evolution. For millions of years evolution have favored those who adapt to a new environment.
Thats the proper perspective to understand this discussion, not pointing back to a few thousand years of human civilization, unless of course you claim that humans is the last word in evolutionary process.
If you (like me) believe technology will take over most jobs then (U)BI is so far the best model we have as it will always make it worthwhile to work.
Seems like the most obvious conclusion is that labor for crappy jobs will become a lot more expensive. Basically any sector that relies upon cheaper labor, or is highly undesirable (think working on pipelines, coal mines, agriculture, sanitation, even low level medical care). And if it isn't based on wealth and only income, I can see a lot of professionals dropping out too once they've become comfortable.
I think you're right at least to the extent that this complicates drawing conclusions. Another issue I see is that in this study we're talking about a single household in a likely poor community getting a basic income. This is totally different from a scenario where the recipient knows that everyone else in their community is receiving a basic income too. Imagine this: a woman in a poor community who works a low-paying job starts receiving a basic income. Her boyfriend loses his job, and he starts to rely on her for support. In a world where both parties have a basic income, she'd have an easier time eventually telling him he needs to get out on his own feet, but in this scenario, she's the one with this "extra money."
And what about border policy? You can't have open border policy + UBI together... I mean why not try to come to America then. I would I come if I had a chance to get UBI and live there, and millions, millions of others. Would the system still work?
I think you mis-understand UBI. UBI enables 'survival' within the country. It will just about pay for a room and basic food. You want to eat steak, you will need to get a job.
Good luck restricting that from future generations who will vote for more largesse...
People regularly vote to cut government entitlements. See healthcare funding in Canada which still does not cover prescription drugs or dental care.
UBI is going to be treated just the same as a tax break for the poor and likely to stay at very minimal levels.
Look at social spending rates by government over time. It's typical that they rise, despite attempts to restrain them. Critics call attempts to slow the growth rate "cuts" and paint the reformers as heartless.
Because people lack gratitude for the life we have. (including me) No generation before has been so prosperous or lived so long, healthy lives. Now how do you solve that problem?
Richer society's can support higher standards of government spending. So IMO, the only metric that matters in Government spending is per person spending / per person GDP.
And in that context you see various growth and cuts over time.
However, even that is misleading as richer society's have a higher percentage of discretionary income and may be willing to pay higher tax rates.
No I did not. Doesn't it come as obvious that people start asking for equal treatment? Or you just build new barriers and second class citizens.
If USA would pay UBI I would do my best to somehow become citizen, there is no reason for me why I shouldn't try. And there are over 7 billion people on the planet, I'm not the only one who thinks that way. That is why I raised the question of borders/immigration + UBI. It's very different situation when it is now for illegals and also people who want to become citizens.
On the other hand, since you're not going to be the only one with this line of thinking, it will create a potentially large incentive for other countries to establish their own UBI to prevent a "brain drain". (It wouldn't totally eliminate the draw of the USA's UBI, though, since foreign UBIs would likely be lower.)
Presumably any UBI system would be limited to citizens only.
In combination with open borders, you do risk having a class system, where the citizens have money and immigrants don't, but at the same time, it solves the issue of certain jobs not being worth the time of someone who gets UBI (and therefore being for immigrants).
It's a tough balance for sure, and one of the main arguments against UBI (accidental creation of a class system).
again showing that socialism causes division and tribalism. i dont want to give more money (currently near half my earnings) to the top 1% of the world (any american on minimum wage) over the current global charities I give to
This assumes people will enjoy a 5 year vacation though. In Norway if you're chronically disabled you can apply for something that seems very similar to basic income. I'm in that system and in my experience most of the people I know in this system are bored. It could be because all their friends are working so it's difficult to meet new people, there's also that this system is for disabled people and people with mental issues could find it difficult to meet other people, etc.
I remember working somewhere where I was being tested before getting into this system and I met plenty who said they were heavily advised not to go back to work by their doctors. They want to do /something/ because being at home watching TV gets boring after half a year. So they were sent to that place in the meantime. I have other friends who are in this system who end up working in charity somewhere.
But most of my friends i met in this system ended up finding a job, despite being promised permanent "universal income".
In the past if you tried to work somewhere while being in this system, and it worked but you got sick again you'd have to reapply (which is a very long process) but now it's changed so it acts more as a safety net in case working somewhere doesn't work out for your health. I've heard this is to encourage people to work and I've heard (from the people who work in the system) that it's successful so far.
This doesn't assume they'll take a 5 year vacation at all. It's the difference between deciding to become an artist because you know you'll never worry about money, and deciding to study accounting so you can eventually have an accounting job you don't care about that will support your evening art practice.
Most will take a 5 year vacation.
They said without any research backing their statement whatsoever...
It's common sense if you have any interaction with US society. Not every common sense thing needs to be verified by a costly scientific study. Though some researchers try.
Plenty of things that people think are "common sense" are far from it. If you want to make a assertion such that you have, you'll have to have evidence.
It's commonly said to be common sense to justify cutting and severely restricting social programs, but rarely with supporting evidence of widespread abuse. Usually just small amounts.
In my experience it is hard to take a 3 week vacation without coming across an idea which "I would do if I had more time". I bet some interesting results will come out of this research even if every single person starts their 5 years with a vacation.
Maybe you would, and you know what? Good for you if you do.
Just about everyone I know would start a business, volunteer, do creative things, contribute to making the world a better place.
But, at the end of the day, I don't care how people spend their time or their money. If some fraction of the population wanted to bum around on their minimal UBI for the rest of their lives, fine by me. It's never going to lead to a life of luxury, and I quite honestly don't care if that's how they want to waste their lives.
If you don't care at all, then why are you okay financing that situation with your taxes?
This argument has no foundation in logic. There is a subset of people who are fine with paying those taxes and do not care how the intermediary recipients of those funds spend them.
Shit, man. If "financing things I don't like with my taxes" is the hill I'm going to die on, I'm going to set my sights on the insane military budget we use to turn far-away countries into toilets and parking lots.
Funding my fellow countrymen who want to squander their lives, so long as they're doing so peacefully and in the privacy of their own homes? Sign. me. up.
Because all they care about is that people are given the opportunity? Your question is a complete non sequiter.
because of the multitude of positive effects it has on society that i live in. less depression, less poverty, less risky or criminal behavior, more economic activity, better educators, better medical care workers. this list can go on forever.
Even if you personally don't need or use the system today maybe it can be useful for you in the future.
So this experience stands against one of the most common arguments against basic income, "nobody is going to work anymore". It validates my belief that people will still seek purpose (and monetary rewards) even when their basic needs are fulfilled.
Always good to hear of policy that's actually working. At times, watching the news makes it feel like all of politics is just a smoke and mirrors game without any positive outcomes.
I feel like we already have tons of examples of people not really working for the money. CEOs of major companies typically have more than enough saved to just live indefinitely off the returns of that money. And yet, they don't.
Yeah. Open source software also kind of demonstrates this. Solving problems and producing value for others is a powerful motivator in itself.
While I'm hoping to see this system work I'm not sure if it will and whatnot. It's great to see research for it and maybe they can study some existing systems as well.
I feel a lot of people on here want to be or are already an entrepreneur. So of course your friends are most likely gonna start a business if they had the time, opportunity and safety net. But maybe that's enough?
Another thing I hear a lot from people in this system is saying they wish they had more money and wish they could do something to earn more. (But then again I think this is always the case)
The money we get is based on some average income. It's enough to pay the rent for an apartment, save up a little to buy a TV, maybe even a trip to another country if you're careful, etc.
I don't think it's enough to own a car, buy a house, have kids, etc. To live that kind of "dream" you need to find a full time job. Which sounds fair within the UBI context but maybe unfair if you're disabled. (I personally don't know, my own life is more than good at the moment)
I should have mentioned that there's a social stigma with not working (at least in Norway). Many of my disabled friends are not very open about it because they think it's embarrassing. I have one friend who choose to work at charity-ish place just so he can say he's working. He's 40 years old though and I believe the stigma was much stronger back in the past.
Personally if people ask what I'm doing I tell them that I'm disabled but I like programming, making music and so on. I've never had anyone react negatively to this, but this is face to face, first time we meet, and maybe the non disabled people I meet have similar mindset as me. (programmers, freelancers, artists, etc) The friends I have who are disabled is another friend circle entirely.
So I don't experience the stigma but I can imagine there are some people who don't like it of course. It's just that I don't hang around those people.
But this stigma could be an important factor as to why people want to work.
I feel like I'm talking for https://www.nav.no (the system in Norway I'm talking about). Maybe they have more useful (and more accurate) data for the people who research UBI.
Since they have a control group, they can at least learn how people's behavior changes when they get free money for 5 years. 5 years is enough for going back to school, getting retrained, moving to a new location for better work prospects, etc.
They can't claim to know how people will behave if it is a lifetime, but evaluating some change is better than evaluating none.
Can't we just have lotteries that have lifelong basic income as prices? It would mean free research data.
We can and we do, http://edition.cnn.com/2017/07/24/us/florida-teen-wins-top-p... (following those outcomes would be great research indeed)
In that case, you're going to have to be content with a thought experiment, because there is no entity that can credibly make such a guarantee.
That would be true of a real BI as well, as you dont know if the government will cut it on the next election!
"I have structured my life not to depend on roads, because you never know if the next government will stop maintaining them."
When there's a cultural shift to a UBI, that's not going to vanish overnight just because of an election cycle.
You sir, need to spend 2 years in Argentina to truly understand how the road example is absolutely applicable.
Its true that its easier to add than to remove. One solution to that would be to tie adding it to removing something else.
I think you overestimate how much the average person prepares for the future. Look at the number of people who have emergency funds. 62% of Americans have <$1k and ~20% have no savings [1]. That number is too high to be explained away by necessary expenses. It is clear that people are just bad at saving. We can even look at the old game of "I'll give you a dollar today or five at the end of the week." Most people take the dollar today.
So with this time frame I believe initial ideas of "I'm going to put this to savings" will quickly disappear. Five years is a pretty long time, especially when considering at how bad humans are at preparing for the future.
What I think will be interesting is to see the different spending trends over time. I would imagine the first and last years are different than the middle three. But that's just a guess.
[1]
That's still not the same thing. Failing to save is partially because people think jobs are stable. That's unrelated to knowing you will need to get a job in 5 years after your extended basic income vacation.
Saving $1k has nothing to do with your job being stable or not. That's a safety net for life. It is the basic emergency fund. Cars break down, people get sick, life happens. So to extend your premise, "Failing to save is partially because people think expenses are stable." Which is clearly poor planning. We know humans are bad about estimating risk. I'm not sure why this is such a controversial idea.
What I'm saying is that if even those above the 50% income level are bad about saving a basic emergency fund, I don't expect those receiving this kind of grant to be any better at preparing emergencies. I do think they will be able to handle them better, but I do not expect them to plan better.
The 60 percentile income is < $46k. That people have little emergency funds on incomes less than this is largely explained away by necessary expenses. 20% have no savings -- the 20 percentile income is $17k. Show me a net savings budget on $17k.
The median income is $57k/yr [1]. Or we can go to the second chart and get the following: 11.2% make under $15k. 20.8% make under $25k. 30.2% < 35k, 43.1% under 50k, 60.1% under 75k.
The point isn't that the lower can't save, it is that people above the median income still don't save. These people should be able to save, but don't.
[1] https://www.census.gov/data/tables/2017/demo/income-poverty/...
Most critically, UBI is a two-step system:
- A small amount of free money for everyone
- Rollback the state, welfare programs, etc. to balance out step 1
It's not realistic to reason about the effectiveness of the UBI proposal without considering the effects of the second step.
You also have to look at the effect of UBI over generations. Children growing up with UBI may never see people close to them who do actual work. I once had a summer job at a welfare/employment agency. A lot of the people who received welfare in the second or third generation often had no idea how a job works. They were late all the time or just didn't show up for a week. The social worker had to explain to them how a job works.
I don't blame them. They just never had seen what people who have a job do. When I grew up everybody close to me was working so I could observe how a job works. And people who grow up around high-powered people like CEOs know how being a CEO works.
Hi, I’m someone who happened to both grow up on welfare AND watch zero people close to me work any sort of job ever.
Your comment reads to me as an implicit argument against UBI. Is that your case?
Allow to me comment from an insider perspective.
- The welfare money didn’t cause the lack of work. They were not strongly related or if anything it’s the lack of work that drives the need to take up welfare.
- It’s likely an extremely small minority of children in welfare-assisted families who see zero closely related adults working at all.
- People who grow up without working role models do have a harder time learning the ropes on the work life, on that we agree. That doesn’t mean they’re doomed to fail completely. (Saying this as someone who had no idea how to do this right but eventually learned, went through grad school, now works in tech, outearns the median income in her city, etc). Also how do you explain the many underemployed/unemployed/deadbeat kids of successful high-status parents? The connection seems rather spurious to me.
- Taking away the welfare money would do nothing to get someone employed. Instead it might endanger the family’s life. You realize that right?
I am not arguing against welfare or UBI. I am just saying the long-term effect may be different from what people are thinking. Especially at HN people seem to think all people on UBI will turn into artists or develop software all day. Maybe that will be the case but I have my doubts.
"People who grow up without working role models do have a harder time learning the ropes on the work life, on that we agree. That doesn’t mean they’re doomed to fail completely. "
People certainly can escape their upbringing but from my observation on average most people stay close to their social class. That doesn't mean that some won't do much better or much worse than their family.
The basic problem with welfare as it currently exists, is that it actually provides disincentives to working. If you start working they take away similar amounts of welfare. You'd have to get a job that is way more than the welfare for it to make even a little sense.
That disincentive goes away with UBI, which is the main reason I think it would work better. Under that system, every dollar you earn directly translates to a better standard of living.
I don't completely disagree with you. I personally know two 2nd-generation 'trustfunders' who many would say don't do much. That is, they 'just' do leisure work. One plays poker part time, and he volunteers the rest of his time. The other promotes bands that she likes. But, are they really doing nothing of value? I think many people who meet them are sort of envious: seems like a nice life!
I also know more than a few 1st-generation 'trustfunders'. Some are artists, some scientists, a couple work as university professors. They certainly are all doing useful work, right?
Just look at HN as a case study. There are many people here (myself included) who could live off of their savings indefinitely. In fact, I've tried a few times. But, as others have pointed out, sitting around doing nothing is dreadfully boring. Once one removes the usual daily stressors (e.g. being able to pay for rent, food, kids, etc.), escapist behavior quickly grows dull. Believe me, when not required to manage stress, there is only so much Netflix one can watch and only so many video games one can play.
I wouldn't worry about the vast majority of Humans doing nothing. People just do stuff. It just means changing perspective of what is valuable work. There are many types of work that are valuable to Humanity even if the market can't support them.
Edit: just want to add that I would be concerned by younger adult males forming gangs. Their PFC's aren't completely formed, and they have raging hormones. In Christian western countries, it's a common saying that "idle hands are the devil's workshop". And, I find that true. So, young adult males, with nothing to do and risk-taking brains, tend to get into trouble.
I wish technically-inclined people who could live off their savings would work on FOSS communication tools (e.g. FreedomBox, MatterMost, Matrix.org, Smallest Federated Wiki, or similar) to create viable alternatives to the centralized profit-driven communication and search systems created by venture capitalism. Or do whatever other worthwhile FOSS floats your boat like for educational simulations or whatever to be part of the gift economy. We desperately need alternatives -- and they are mostly not going to come from the surveillance capitalism culture (or its captive governance) which privatizes gains while socializing costs and risks (including costs and risks to privacy and democracy).
And non-technically-inclined people with savings could help by promoting, documenting distributing, training, prettifying, and providing other support for such systems.
And yes, I've put all my spare resources into that kind of FOSS technical work myself (although at the moment I'm once again working for pay to climb out of taking on debt to finish another FOSS project done with my wife -- this one called NarraFirma).
Related by Alan Kay: https://news.ycombinator.com/item?id=15261691 "In the interview -- to say it again -- I'm not calling for the field to implement my vision -- but I am calling for the field to have a larger vision of civilization and how mass media and our tools contribute or detract from it. Thoreau had a good line. He said "We become the tools of our tools" -- meaning, be very careful when you design tools and put them out for use. (Our consumer based technology field is not being at all careful.)"
See also "The Skills of Xanadu":
Printed: https://archive.org/stream/galaxymagazine-1956-07/Galaxy_195...
Audio: https://archive.org/details/pra-BB3830.08
And yes -- a Basic Income would make that possible for everyone someday. But if you can live that way now, why not help create a more joyful and sustainable alternative right now? Isn't it plausible that our direction coming out of any Singularity may have a lot to do with our moral and technical infrastructure going into one?
(Obviously, there are some paying jobs that align more closely with such ideals, but they tend to be few and far between, and if you have savings and take one, you displace someone else who might not have your options.)
Also related by me on basic income: http://www.pdfernhout.net/basic-income-from-a-millionaires-p... http://www.pdfernhout.net/towards-a-post-scarcity-new-york-s...
Personally I don't believe in idea that many people would be able to build successful FOSS projects and communities around them while living off their savings. It's could be a good for the start, but nothing would work without project having viable business model like MatterMost or Discourse have. Or if someone sponsors it be it some corporation or individual.
Reason for this is simple: successful project it's not just the code, but also community around it. Coordinating even small team across different time zones, helping new contributors, reviewing the code and keeping it all together is exhausting daily job and not everyone can handle that. Now projects that you find valuable would require highly skilled programmer to work on them.
So the person it's require to build such software can easily find a job in one of corporations that pay very well or FOSS-related job that might have lesser pay. Why should someone prefer to live off savings or in debt just to build software that don't have business model?
This is the reason I don't think basic income would help here at all. Of course some could be okay in living just above poverty while working on project they believe in, but most would prefer job for some corporation that would have have 3-10 times better pay.
So instead of basic income there should be viable way to fund open source projects and to distribute the pay fairly according to the job done. For individuals and small teams there is already Patreon, but there no simple solution for distributed teams usual open source project have because it's extremely hard to collect and distribute the money without offending someone or contributors lose motivation to work on project when one guy is being paid while they get nothing. Unfortunately I don't even sure if ever will be solution for this.
I agree anyone competent enough to run a good FOSS project from their savings will face a daily temptation of abandoning their precarious existence for a substantial secure income working at a corporate job. And I agree also that it is problematical how to divide donations to a project when there are multiple contributors (especially versus donations to specific developers, but even that is problematic if a multi-person project is involved). I also agree on the need for building a community around a project.
Where we differ regarding the BI and FOSS is possibly in thinking in these areas:
* There are many small but important projects (Mithril, Vue, many others -- even Linux early on) which are initially the work of one developer, eventually supported by a community. A BI would make more such starts possible, and also make contributions more feasible. While it is not quite "if you build it, they will come", certainly there are a lot of cases where a good project, well supported by one person, makes a big difference to a lot of people. Khan Academy in its early years is another great example of this.
* There is an entire gift economy of volunteerism. In some ways, much economic activity in even the USA is voluntary (even if it is ignored in the GDP) when you consider child care, helping neighbors, volunteering at non-profits, conversing with strangers to share knowledge, and so on. So, I know it is possible.
* Regarding "most people" and "some people": If you multiple seven billion people on the planet times even 0.1% of people being civic-minded at any particular time (and the percentage is probably much higher), then you get 7 million people. That is still a lot of people who can put a lot of time into things. And even without a BI, Clay Skirky said, there is a lot of time that could be liberated for improving free software and free content: https://web.archive.org/web/20110102193349/http://www.shirky... "Two hundred billion hours [of TV watching], in the U.S. alone, every year. Put another way, now that we have a unit, that's 2,000 Wikipedia projects a year spent watching television. Or put still another way, in the U.S., we spend 100 million hours every weekend, just watching the ads. This is a pretty big surplus."
The bottom line is that the way people make a lot of money is by standing between someone and something they want and asking for a toll to access that thing. Almost all venture business models are based on some variation of that (or aspire to that such rent seeking). It's not the only way to make money, but it is the way to make a lot of money. The problem is that tolls have lots of external costs. For tolls at bridges there are delays, health costs of fumes, and increased risks of accidents. For online software, there is the externality of lost privacy (but only one-way, consumer to aggregator) needed to make possible the tolls Google and Facebook charge advertisers as they sell human eyeballs. There is also the externality of risks from central points of failure (whether loss of service or censorship).
Small-scale exchange commerce may make a lot of capitalistic sense at the scale of, say, running a local farm, bagel shop, or plumbing company. But on a large scale, like Facebook, Google, Slack, and so on, the centralization of control of information flows poses enormous risks to democracy.
If there was not so much regulatory capture, we might expect our governments to pour literally trillions of dollars a year into software (and content) for democracy right now given how important that is. Instead we have a proprietary centralized Facebook, Google, Twitter, and even Windows -- and our democracy and culture is at great risk from an imbalance of power. Governments at the behest of content publishers have continually expanded copyright and passed ever more draconian laws about sharing information. And every day we get more funding pouring into the next venture (like Slack) that can figure out how to capture and centralize more information and data mine it for the benefit of the investors.
For a latest example of how Slack continues to invest in data minining alll the secrets of coprorations: https://medium.com/@noah_weiss/starting-up-slack-s-search-le...
As we move into an age of AI, the emphasis on monopolistic business models is even more dangerous. It's bad enough to have a communications system shaped by short-term greed and competition -- it is far, far worse to have autonomous inhuman AIs shaped by short-term greed and competition let loose on the net.
I wrote an essay relate to such funding trends over a decade ago, with a section on automotive intelligence: http://pdfernhout.net/on-funding-digital-public-works.html#w...
Of course, ultimately, there are lots of moral failures all around. If people had rejected Facebook or Slack from the start, the world online might be a very different place.
But, in the words of Marc Zuckerberg: https://en.wikiquote.org/wiki/Mark_Zuckerberg
Now, we all need to trust other people in this world to have a happy life. But in a democracy, the idea is to spread that trust around as much as is feasible and have checks and balances. There is also the notion of incrementally earned trust -- and also the recall of trust (like impeachment).
But how do we impeach Facebook, Slack, Google, or Equifax? In our society, we can't. The best we can do is create alternatives.
Instead of centralized proprietary services like Facebook or Slack, we could instead have shared standards (e.g. email, IRC, or what comes next) and a variety of implementers of those standards. But if all the techies are being paid by VC to work for Facebook or Slack or the next similar service, that creates a vacuum of developers working on better email or better IRC standards (and implementations).
We may benefit from some hierarchy, but we also benefit from having that mixed with some meshwork (as Manuel De Landa suggests: http://www.t0.or.at/delanda/meshwork.htm ).
There are several options for moving forward -- a Basic Income is just one of them. Maybe there can be better business models that affirm democracy. And maybe there can be more court rulings protecting democracy. And maybe there can be more collective investment by government and foundations in FOSS. (One other place I suggest that is here, suggesting the intelligence community fund FOSS intelligence tools: http://web.archive.org/web/20160508005451/http://pcast.ideas... ) But we may not get there if we believe a conventional rent-seeking business model is the only way to fund most software and communication services.
While I wish to be as positive as you are about the future there still few points I feel important to make.
* First of all I don't think that important projects started by single developer is right example for benefit that BI could bring because they managed without basic income in past and they don't need it today.
If project don't get enough traction during period when project originator actively work on it that's usually mean that will never happen. But if original developer leave there still chance for someone else who believe in idea to take control or just fork it and continue. Also this rotation seems like one of crucial parts that make open source successful.
So while BI would let someone to work on the same code indefinitely or at least much longer than now I don't think that will greatly increase number of popular and widely used open source projects. And who knows might be it's will even decrease that number.
* Another note about voluntarism. It's great that in developed countries there is endless number of ways for society to participate in all kind of useful activities and I wish it's was even remotely close in country of my origin. Though for the reasons stated before I simply don't believe that crowd-sourcing can be applied to build successful software projects. You might say that community can go promote software instead of helping with development, but today you can't even promote project efficiently using centralized tools we have simply because companies companies like Facebook and others want you to pay for that. Number of communities outside of centralized social networks is dwindle over last 10 years.
So I wish to think positively, but so far all I see is that distributed FOSS projects cannot successfully compete with corporate or VC funded products. With direction where Internet, hardware trends, Internet and society itself going I don't see how we going to get more people involved in open source and not less.
But hopefully someone will come up with idea how to fund truly distributed open source teams so they can at least somewhat compete with VC money burning centralized proprietary alternatives. Without that best we can hope for is that open source will keep positions it's have today.
A basic income makes it possible for, say, 100 software developers to choose to work together on the same project of their own choosing and of their own free will -- as opposed to having to work for someone else on someone else's choice of project just to be able to pay for food and rent. That's the difference a BI would make.
Now, getting 100 software developers top agree to work together on the same project might not be easy ("herding cats"). But it seems doable, as we can point to quite a few projects (including big names like Linux, WordPress, Apache, and Python) where it has happened. And there are even some books out there on how to create and manage FOSS projects.
Granted, those particular big-name projects have also had commercial support eventually -- so we don't know all the details of what might be possible otherwise. But there are plenty of examples of voluntary groups of significant size dedicated to a common purpose (fire companies, sports clubs, historical societies, and so on) so it is not inconceivable the same will continue to happen for software if people have the free time to participate in them.
A good resource by Karl Fogel on: "Producing Open Source Software: How to Run a Successful Free Software Project" http://producingoss.com/
Supporting your third paragraph, I had some contact with the unschooling movement while growing up. The experience is typically that kids will do nothing for a while. Maybe quite a while. But then they get bored, and start to pursue things they find interesting. Art, music, literature, science, programming. You sort of need to detox from living under a very defined structure before you learn to self direct and spend time doing things you enjoy. It also seems possible that this transition could become more difficult as people age. Intuitively that makes sense to me, and might partially explain why some adults have a hard time transitioning into retirement.
So... would there be still risks in giving basic income to females?
I'm not sure if I or the people here are representative of the people the proposal targets, but if I had a guaranteed basic income for 5 years, I would attempt to start a startup full time.
One factor that would be lost in a controlled, basic income test is the inflation effect. Implemented on a national scale, cost inflation of basic consumer needs is a near certainty. On a controlled test of 1000 people inflation would be nearly impossible to achieve without localizing the test to an absurd degree.
I could see this test could serving as a dataset for calculating anticipated inflation rates on a national scale. If money is sent out via a trackable card instead of raw cash, you could begin to extrapolate where this basic income spends would be going, be it consumer products, bills, etc.
I like the thought behind the trackable card idea, but most participants are going to have other income and savings too, so what you're really learning from them is what spending they're willing to share with people who've given them money to track how it's spent.
Even if it was people's entire household budget being tracked, it'd be difficult to draw too many inferences from spending in the absence of price pressures driven by everyone else having UBI too.
Yep, basic consumer staple price inflation is something I never see addressed with any satisfaction when people are talking about UBI. Housing prices and rent will assuredly rise proportionally to the basic income amount if this were to be implemented nationally, so wouldn't pumping all this money in basically just have the effect of increasing inequality?
Unlikely. UBI removes the connection between location and income. As a result you can move to somewhere incredibly cheap to live since there's no need to be in an in demand market in order to have a nice job.
Housing is really quite cheap in the US. With Real Estate you pay for the location not the actual land or building.
Of course people won't necessarily want to move away from their "hip" city, but UBI is "basic" and if you want to stay in a high demand area you will have to supplement UBI with work.
As for basic consumables, demand is unlikely to go up for these fundamental goods because people are _already_ consuming them at their basic required levels under the current system (toilet paper, eggs, milk, bread, chicken, beans, rice, birth control, etc).
If people in every location have their income increased, then the housing prices inflate in every location. Saying, "People can just move" is missing the point.
It isn't that they can't afford to live where they are now, it's that BI will be absorbed by price inflation everywhere.
I think it's you who's missing the point.
A big reason for the current rise in real estate prices is urbanisation (centralisation of population in big urban centers) - e.g. London, NY, SF, and plenty other cities. (The other reason is foreign investments, but I'd argue the investment comes after the initial rise in prices, simply because real estate is perceived as a good investment opportunity.) This urbanisation is to a large extent driven by the fact that the most high-paying jobs are available in these cities, which consequently also increases the availability of lower-paying jobs. I.e. people move to cities to succeed/earn money.
If you remove the last implication - if people can earn a living without moving to big, overpopulated cities - then arguably the concentration of population would drop and the "bubble" would pop/deflate.
You're assuming that there can only be one cause of real estate price increases.
Housing prices are a function of income elasticity - raising the income for everyone will raise housing prices for everyone. Note - this is not the only way that real estate prices can increase (as you described urbanization), but it is one that BI would cause.
This is a truism but incorrect in the context of this conversation.
UBI does not increase incomes for everyone. It is a wealth redistribution. Many will see their income fall, especially initially, in order to prop up the incomes of the poor and those who decide to live solely off UBI.
Universal Basic Income (UBI) at it's core increases income for everyone - universally.
What you're thinking about is a negative income tax or some other BI that is disproportionately weighted.
This is a misunderstanding of how both macro inflation occurs (money supply growing faster than true value of wealth it abstracts), and how price is set (supply and demand).
UBI does not "create" new money and just give it to everyone (which would cause inflation). It's a wealth redistribution. That is, many people will see their income go down under UBI (probably most HN readers for example). The money supply will represent the same amount of wealth, what changes is who owns that wealth and as a result who decides how to use that wealth to consume.
Regarding price changes, price is set by the amount of a good/service demanded by consumers, and the supply of the good/service created by suppliers. High discretionary income does cause the demand for certain goods/services to go up (especially luxuries), but UBI is so basic at $1k per month it won't make much of a change in the demand curve because the type of goods/services that will be consumed by someone living on UBI are so fundamental they are already consuming these goods at the same rate under the current system.
So far as housing is concerned, UBI will pretty much "explode" the supply of acceptable housing for people living solely on UBI since they get access to housing in the entire US instead of having it constrained to locations where they could conceivably "make a living." I'm sure you realize what happens when supply increases drastically but demand stays somewhat constant (everyone has to live somewhere and you can only live in one place at once) -- the price of housing on avg will plummet considerably for UBI'ers.
UBI is Universal Basic Income, meaning that income is increased for everyone universally. Nobody is claiming that money is created out of thin air.
What you're thinking about is a negative income tax or some other disproportionately weighted welfare program.
Not true see https://news.ycombinator.com/item?id=15306562
That still doesn't explain why you think people are saying that money is created out of thin air.
Increasing the income for the vast majority of the population inflates the prices of income-elastic goods and services.
The idea of UBI at $1K per month shows that UBI advocates don't know how to do math. The US tax revenues (combined Fed and State) are roughly $6 Trillion. Giving 150 million people $12K per year is $1.8 Trillion. Unless you raise taxes by 1/3, you're going to cause inflation.
This is a strawman attack. Everyone knows UBI will require an increase in taxes that's fundamentally how the wealth redistribution will work.
Not a strawman at all. Many UBI proponents claim that it's more efficient, by directly paying for services already provided. Then when called on that, they switch to your strawman that "Everyone knows UBI will require an increase in taxes..."
Again, good luck trying to raise tax revenue 30% without killing the US economy.
My taxes are already pushing oppressive. Raise them further, and I'll seriously consider "going Galt" - cash in my investments, buy real estate & capital equipment outright, and live quite comfortably on $4000/mo ($UBI * family population).
You're subsidizing the unproductive, and punishing the productive. I can be productive in untaxable ways.
It doesn't seem like a strawman to me. The money has to come from somewhere or else mass inflation will happen instantaneously. The number of goods and services that exists is finite. Giving people free money which removes their burden of supplying value to others will not only fatally harm the buying power of the dollar but it will actually reduce the number of goods and services available which will have the opposite affect than intended. UBI will fail spectacularly if implemented at any meaningful scale.
Sounds like yet another argument trying to deny the law of supply-and-demand, like those who quote the laws of thermodynamics and then claim they have a perpetual motion machine.
Instead of having to work for that first $1000/mo, it just...appears. Yes it was earned elsewhere, and whoever earned it won't miss it as much as the recipient will appreciate it, but since the recipient has done nothing for it, its local value plummets. Instead of some low-income people having $1000/mo for rent, now everyone has $1000/mo for rent - and basic prices will rise accordingly.
I won't notice much change for losing a sub-1% of my income, but those for whom UBI is really intended can go from really struggling to renting (even buying) housing. With limited housing supply, suddenly prices will rise.
While I'm a staunch advocate of "move already!" for solving economic problems, I don't see enough people moving - nor enough housing for them to move to - to cause "the price of housing on avg will plummet for UBIers".
Imagine the poor section of town. Many/most rent. Suddenly, with no additional productivity, everyone is getting checks for $1000/mo. You think rent etc prices aren't going to suddenly skyrocket? I grasp your theory that people can now move to more affordable locations, not needing to be near jobs - but will they really? before they can, rent prices just shot up, consuming their newfound income. Destination rental prices similarly increase - still relatively attractive, but higher than before since there is more demand and more money to pay for it.
Yes the supply of acceptable housing for UBIers increases, but those markets already existed and were already priced for a low-demand market; now you've "exploded" the demand - prices will rise, matching people who now have $1000/mo and few expenses.
Here you claim to earn more than $100k every MONTH, yet in another comment you claim the amount you are taxed is nearing oppression. It sounds like maybe you're just saying whatever helps your argument at the time.
I’m not convinced that UBI will dramatically affect the housing supply for many people who would rely on it. Maybe you can expand on what you mean in light of an example:
I live near Vancouver, which is the most expensive housing market in Canada. Poor people here have access to free health care, a provincial welfare program, and a permanent disability allowance. The income amount is enough to live on in some parts of the province, but not Vancouver. Still there's a glut of unemployed poor people who prefer substandard housing or homelessness over relocating to where they could afford to live. They don’t choose to live anywhere else, even though they're not in Vancouver to “make a living”.
Programs aimed at helping the poor here focus on providing subsidized housing, not relocation.
It seems to me that if UBI doesn’t help these people afford a better standard of living where they are now, then it won’t help them at all unless they’re forced to relocate. What am I missing?
Figures put 14-20 million unoccupied houses in the US. A lot of those are just rich people buying valuable real estate and hoarding it as a store of value, but a lot of them are also in locations where nobody who would want to buy them can afford to live because there is no work available. There are thousands of ghost towns in rural America which depopulated for a wide variety of reasons since the 70s but all could be cheaply renewed if people could survive living there without guaranteed constant employment.
So its not that the whole housing market just moves up the value of UBI and nothing changes. UBI introduces a new market of houses that currently are unsellable and rotting.
Those are obviously not a long term solution, but the existence of UBI and the economic pressure it produces will incentivize builders to develop the cheapest possible living conditions to supply to people living on UBI. That almost certainly would be an entirely new model of building - constructing for density, but without the limitations of building in already densely populated areas.
The unoccupied homes in the U.S. is primarily due to banks holding onto foreclosed properties.
You could say, "This is a problem with the current financial system," which it is, but it's not a problem that UBI will solve.
If UBI is enacted, then prices will still inflate and people who purchase foreclosed homes at auction will continue to do so today, because they will also have the same increase in income as everyone else.
The net increase in income won't be the same for everyone.
If UBI is funded by printing money, people with assets will see them devalue through inflation (people with no assets won't have this loss).
If UBI is funded by taxes, it's likely to be progressive. So sure, the high income people get the UBI check. And a bigger tax bill to go with it.
If you assume UBI is based on an income tax, then that's not universal basic income, that's negative income tax.
Even so, if you hypothetically see a decrease in income for 3% of the population and an increase in income for 97%, you still have inflation. 100% of the population purchases housing, which is income-elastic, meaning housing prices will increase because 97% of the population's income will increase.
So you expect people to relocate from California to Detroit... Good luck with that happening.
Inflation is a result of the money supply growing faster than the national wealth it represents. Example: US goods & services increase in value 5% but the Fed increases the money supply by 8% leads to inflation - the money/value abstraction is out of sync in such a way that money represents less value.
Wealth redistributions don't cause inflation. The money abstraction still represents the same amount of wealth, it just changes who can choose how to use that money to consume.
That said, you'll probably see some radical pricing changes in the market from the new system, but probably not as much as you would expect because UBI will be so limited at first, the money will be spent on absolute necessities that people are already consuming under the current system (ie demand won't go up for toilet paper and basic consumables, and UBI isn't enough for luxury goods).
That's one cause of inflation. Another cause is raising the income for everyone (i.e. minimum wage, etc.).
There exist goods and services with prices that are a function of income-elasticity, meaning that they inflate with the more money that people make (e.g. housing). This is one of the reasons that many welfare programs are targeted spending, like food stamps or medicaid.
Arbitrarily raising wages for everyone is the same as increasing the money supply without increasing the underlying value it represents (which causes inflation).
UBI does not do this. It doesn't "increase" the amount of money floating around, it simply redistributes a portion of the created wealth from one population (the rich) to the total population. UBI money isn't pulled out of thin air, it's taken from one group (via taxation) and distributed.
Of course prices for certain goods and services will change as a result of this wealth distribution, but to suggest global inflation will occur (ie the value that money represents decreasing within the complete system) is incorrect. Furthermore, while I obviously can't say for certain, I imagine prices for fundamental goods will not change drastically simply because UBI doesn't provide enough money for real discretionary spending. The goods/services you consume under a UBI program you already would be consuming at the same rate under the current system.
Sure, what you're describing is the quantity theory of money, but there are other reasons why you could see inflation given a universal income, depending on the circumstances.
If you consider the velocity of money, you will almost certainly see inflation on consumer goods if the money to be redistributed would have otherwise just sat in some rich guys's savings account.
There are also inflation expectation to consider, liquidity traps, the actual demand for money, etc.
I expect prices to change in order to reflect the new system, but I think people's "sky is falling" concerns about the price of consumer goods shooting up is way off base and sensationalist.
UBI alone simply won't provide enough discretionary income to cause sharp increases in demand of goods. Not to mention, the type of goods that a basic income affords are those that are already scaled out and are easily scaled out - ramping up supply would happen relatively quickly in the unlikely scenario that demand for these goods does go up drastically.
As I've repeatedly said in other comments, I believe demand for these simple goods will stay relatively flat since they are such fundamental necessities people are already consuming them and won't necessarily increase demand significantly (UBI won't cause demand for toilet paper to go up significantly).
Regardless of what dollar prices do, real prices should go up as total production decreases from people exiting the labor force.
Currently we have an economy that motivates companies to spend 1000x more capital developing innovations for a consumer with 1000x more buying power. Basic income introduces a source of capital that motivates companies to innovate in that area of "basic consumer needs", i.e. things needed by the majority of people, not the majority of dollars.
You're right that the short-term effect of this is indeed inflation on the prices of these needs, but the long-term effect is larger portion of the economy dedicated to filling basic needs instead of superfluous luxuries.
How so? Is there are large number of consumers that are currently not able to satisfy their current basic needs? Otherwise aggregate demand will stay the same and on the supply side nothing changed, so there is no reason why prices would change.
Its also worth noting that inflation only happens like that when demands cannot be met. IE fixed quantity of goods that cannot grow, being demanded more and more over time. That is not how basic necessities work at all. If you increase the profit margin in almost any food crop or raw material by a few fractions of a percent you see dramatic investment in sating that demand because its an extremely safe profit center.
Why do you think nothing would change on the supply side? There are plenty of low income workers that would quit their jobs, driving their wages up - thereby either driving up the cost of goods or reducing supply. Unless of course the goods are shipped from nonUBI countries
Good point, I hadn't considered those second order effects.
I don't think we have enough information currently to unequivocally state that. How many low income workers would quit? It's not like many people in better paying jobs reduce their working hours up to a point where they make the equivalent amount of money as a UBI. How many currently unemployed people would be picking up the slack?
Labor costs are a small part of the price of basic goods. I couldn't find much good information, but e.g. [1] says that for fresh fruit and vegetables a 40% increase of labor costs amounts to a 4% increase for consumers.
[1] https://migration.ucdavis.edu/rmn/more.php?id=2005
As is seen with people on welfare there are plenty of jobs they won't take if they don't have to. The meager wages don't make them worth it.
Because of this I think prices would soar much higher than 40%
UBI is unconditional: you don't lose it if you work. That is not the case with welfare, typically.
On a first moment, possibly. After that, we would see how free the market really is. If it's reasonably free, the market will self-correct and prices will decrease.
A thought experiment: you have a business; now everyone has money; then prices rise "together"; so market distribution remains the same; you decide to reduce your price to the old price and your competitors don't. Now you get customers from your competitors that you didn't have before.
The amount that this happens depends, naturally, on how free the markets involved are (if free at all).
Just a bit of quick math[0]:
~323,000,000 total US population
77.2% over the age of 18
~250,000,000 total over the age of 18
$12,000 per year per adult = $3,000,000,000,000 per year
[0] - https://www.census.gov/quickfacts/fact/table/US/PST045216
How much did that recent war cost?
About $500b a year.
Not bad, especially since most of it would go straight back into the economy. People who need the money tend to spend it immediately.
I feel it would drive a great de-urbanization, as people try to move places where they could get the most for their UBI.
Trillions. That's what's currently going around in quantitative easing. That's why many are calling for QE for the people. Instead of giving money to financial institutions, give it directly to the people.
[0] https://en.wikipedia.org/wiki/Quantitative_easing
There is a big difference between loaning $1T once, and getting paid back, versus giving it away every year.
You loan 1T to the poor one year and get paid back 1T from the rich the next from all those poor spending money on goods the rich sell.
UBI isn't like defense spending. It isn't a black hole you put tax dollars down and get nothing out. It means tremendous goods demand for the necessities of life that is extremely stable and reliable for businesses to profit off.
Revenue doesn't equal profit, much less the tax on profit.
No offense, but defense spending is exactly the same as what you describe. It's money that goes to hundreds of thousands of workers that spend it in the economy.
Unlike (some) defense spending, UBI doesn't intrinsically create some economic value. Increased stability would indirectly create economic value, but it needs to be more than the face value of the UBI check for it to not lead to gross inflation.
Presumably, the amount given could be on a sliding scale, where more wealthy people receive less money, but I'm sure there would be challenges to such a system.
Personally, I'd love an extra 1k / month, but I rather see that go to a lot of other people before me.
No reason to complicate things. Everyone gets 1k/month and everyone's taxes go up.
The hard part is figuring out where to take the money to cover the difference.
It would not be an extra cost. It's just distributing money differently.
Most people would pay $1000 more taxes per month and get it right back as $1000 in BI. The benefit would be that if their income suddenly fluctuates, that $1000 would be there as a baseline.
I like the idea of basic income but I confess that my ideal of a basic income recipient is someone akin to the 19th-century amateur scientist subsisting on a private income whilst making original contributions to human knowledge, and, as a side effect, to society.
Whereas the reality of people receiving free money might be somewhat different. There's the drip, drip welfare payments of just enough money to survive without being motivated to find a job. Then there's the fallout, family break-up and chaos that occur in the wake of a lottery win. Both morally questionable.
Or perhaps there might be a settling down period of people acting irresponsibly followed by a recognition that engagement with the problems of civilisation and survival doesn't end because one has food, shelter and internet. There are novels to write, structures to design, problems to solve and of course there's science to be done. Work is more fun than 'fun'. Pick something worthy of your talents or start the slide into mental disorder and addiction.
Whatever the truth it almost goes without saying that a study alone cannot sort these issues out. Perhaps it can help. But in science experiment is insufficient there has to be theory to go with. (This is a major reason why so few studies in medicine and psychology are reproducible. I assume in sociology too.) What makes it more difficult in this case is there are moral components which can't be assessed empirically, only by conjecture and criticism.
It means putting 99% of recipients, or more, into illustion which will result in nothing but a severe depression in a few years. Suddenly being able to contribute to the world in a 'larger' way, they will quickly realize that they can't - just as many startup founders. Maybe, need to meet the bills by mind-numbing work is really a blessing for most people - i had stable income almost without work for years and i got very, very depressed.
That sounds like Anecdata. Especially the 99% claim.
I disagree that everyone would be depressed. Cityfolk probably but they deserve it because they will be the ones voting in ubi. They will also be the ones starving when us country people start only making enough food for ourselves and spend our days at the river drinking beers and fishing or hunting
Having to work to survive keeps people engaged with reality and I think this may explain why people in the past and in developing countries today seem to be at least as happy and mentally resilient as modern westerners, maybe more so. In spite of hardship, disease and early death.
Whereas many of us spend our limited freedom chasing pleasurable (and unpleasurable) illusions that lead only to disorder and despair. That said, there are plenty of sane, wealthy people in the West who do important work for the sake of it, because they wish to. How do more of us become like them?
Also, despite apparently comfortable conditions, there are plenty of survival problems which remain. For example, meteor strikes, super-volcanoes, cancers, toxic ideologies/religions. Plus an unlimited number of as yet unidentified problems.
These problems are more abstract than working for a pay packet to buy food but they are nonetheless real. And they are not being sufficiently addressed! Universal Basic Income could turn out to be an important breakthrough in this regard, I think, if we also address the question I posed at the end of paragraph 2 above.
That's why I always clarify that an essential piece of Basic Income is that it is unconditional. Whether you're on the bottom rung of society or the top, employed or unemployed, basic income should be the same amount.
When the choice to get a job changes from "Well I'd lose my benefits" to "Well my basic income is no longer enough, I'll work part time", then state welfare no longer becomes as much of a trap. It can finally make strides towards lifting people out of poverty.
If it isn't unconditional and universal, it's just welfare under a different brand name with the same inefficiencies and rent seeking political problems.
The same amount? No adjustment for San Francisco vs. nowheresville, Idaho?
Certainly not. Any UBI policy has to be set for a universal basic standard of living in a contiguous zone of free movement. US citizens can live anywhere in the US - UBI reverses the current bubble of housing prices that is concentrating people in cities that then resist increasing density and thus just drives property values to infinity. It lets people who don't want to live there the option to move elsewhere that is much cheaper and thus lets them live off the UBI.
Trying to peg UBI to regional cost of living costs an incredible amount of money (the cost of living in the Bay Area has to be at least 10x the rural Rust Belt) and has practically no benefit (because all it means is people get the privilege of living wherever they want on redistributed money, rather than choosing to either live where they want and seek the means to afford it or living where its cheapest and costing society less in macrospect.
This is, by the way, another reason UBI is a Utopian fantasy: It’s impossible to imagine an elected government resisting the temptation to fiddle with the formula to achieve policy goals and reward constituents, just like today’s tax code.
So the homeless population in SF would mostly still be homeless? If UBI is unable to help those at the lowest rung of society, what's the point?
There would be an industry overnight that would pop up to help people migrate where cost of living is affordable on a UBI because that is an insane amount of dependable profit to be made. It would be as simple as "your first month pays the move, and every month after that is last months rent payment".
There already exist communities and retirement homes whose entire agreement with its residents is "give us your social security checks, we give you food shelter etc". If you know constant money is coming in, arranging your business around being super easy to use for that money is a very lucrative opportunity.
How will you work part time if there are no jobs due to robotic automation (not that I believe that's a significant problem for a century)?
I think the parent comment I was replying to was more concerned about the situation where we have UBI without full automation. In which case there may be a push for jobs not yet automated to be split into part time positions. If society really feels like keeping people employed is a moral good in the face of increasing automation, then there may be pressure to increase workforce numbers and reduce working hours. Especially possible if UBI can close the gap and maintain a safety net.
In addition, full, 100% automation doesn't seem likely to me. Service sectors of the economy may simply keep smaller human staffs in order to keep their hospitality atmosphere. Not enough to offset job loss in other sectors, but there are already plenty of businesses today that have a human element that don't _actually_ need them. It might even look like a luxury business model. No reason that will go away just because robots can do it better.
There is already sizeable group of have independently wealthy people with inherited money. If we look at how many of these people behave in different wealth categories, it might give a clue.
If it's determined that money makes lazy and that's moral hazard there should be really high tax for inheritance.
Easy answer: they lose it.
http://time.com/money/3925308/rich-families-lose-wealth/ "It takes the average recipient of an inheritance 19 days until they buy a new car."
Adam Smith details that the downfall of feudalism was this very same effect.
Correct me if I'm wrong, but doesn't UBI operate on the premise that it's replacing many of the existing social programs? For example, unconditional money rather than food/housing assistance. If the participants of the study also get access to these things, doesn't that severely limit the usefulness of this study?
Also, $1k/mo is pretty small. Are you just hoping to observe some behavioral changes at the margin with which to extrapolate?
There seems to be a common bait-and-switch tactic performed by proponents of UBI, in which they mention UBI as a replacement for social programs when talking about affordability, but back away from that assertion when questioned about how to handle (for example) recipients that spend all of their UBI on drugs instead of food.
I see that as a societal symptom instead of a personal failure. I would rather a person spend their time playing videogames* instead of being stuck working dead-end jobs until the day they die.
*Drugs are a different issue, that should be treated as a health problem and dealt with accordingly.
Isn't better psychological assistance the better solution to that problem?
Unless you are serving food directly you cannot prevent turning assistance into drugs because you can always just sell whatever you are given.
We handle them exactly as we do now... by doing nothing. Today's social programs don't give people more money just because they spent all that they were given yesterday.
It's universal INCOME, not universal "take care of all your problems for you".
That's the end game, certainly, but having guaranteed income and additional programs doesn't hurt the experiment.
The idea is you can help pay for UBI by cutting the then-superfluous programs. But the benefit for people is in having the unconditional safety net, not in having access to only one program.
In the end, though, isn't that just an observation of how people behave with marginally additive wealth transfers? Shouldn't we have enough people who chose the annuity option of a lottery or had an unknown trust bequeathed to them to adequately study this phenomenon? I thought the real idea to be tested would be to take away the $1000/mo section 8 house, and instead give the recipients $1000/mo, and just see if they can more effectively use that resource.
Also, if we're making the usual assumption a UBI is intended to replace [most] needs assessment of state benefits, we need to test how people respond to having $2500/month value in various state cash and in-kind benefits replaced by $1000/month in cash (with the difference pocketed by people hitherto deemed less in need of support)
Basic Income is often proposed in conjunction with cutting basic social services & welfare payments, thus achieving a net gain for the government. This seems to make it attractive to both the neoliberals and the neosocialismés, but I believe this is a terrible mistake that will have the exact opposite effect to what its supporters intend - there will be more poverty and debt slavery, not less. (Methodology debates aside, I generally think both sides want people to propser & be happy).
My proof is by example through thought experiment: I'm a grad student who has a bicycle accident. Without free gov healthcare I now must go into debt to either the hospital or a lender (medical purchases are just one example of an essentially non-negotiable expense). Perhaps I already had other debts, but somehow now my interest payment + living expenses payments are more than my basic income, otherwise known as the normal life of a grad student in todays society anyway - in my case BI didn't work. This is just one example of how easy it is to slide back into poverty with such a system, it could occur slower and over a few generations but sooner or later poverty is back. We just pushed the goal posts back a little bit.
Instead I believe we should leave our dealings with money to the marketplace, but should definitely act as a society to provide a good life for all citizens by seeing that their basic needs are met. Make free public housing that all citizens have a right to ask for. Provide basic but nutritious food to the populace, for free. Encourage free markets and capitalism, but see that the basic needs of every citizen are met - and perhaps a little power in the marketplace i.e. money is also a basic need, but its still only one of many. "If they didn't already exist, people would think public libraries were the most radically extreme socialism".
For these reasons, the growing popularity of BI is worrysome to me. It's just neoliberalism made pallitable by a once-in-every-few-generations wealth transfer.
If you're getting a basic income, presumably you buy health insurance with it, right?
If you strip out all the regulations in healthcare all it takes is one preexisting condition to make healthcare runaway expensive for a majority of people.
Most UBI proposals include universal healthcare because healthcare is a problem best solved when everyone is in the "insurance pool" automatically. As long as the hippocratic oath exists and doctors have to provide life saving treatment it will always be in our macroeconomic self interest to incentivize people to seek healthcare before its life threatening.
"it could occur slower and over a few generations but sooner or later poverty is back." But, if the UBI is set to a percentage of GDP, then as overall wealth increases, the wealth of those depending on UBI increase. In the past few generations, ex. since the 1950's, real GDP has grown 6x [1] while the population has only doubled [2], meaning the real wealth of our society has grown three-fold in "a few generations".
[1] http://www.multpl.com/us-gdp-inflation-adjusted/
[2] https://www.google.com/publicdata/explore?ds=kf7tgg1uo9ude_&...
I'm not sure that it gives good incentives to have it directly linked to GDP. I think it would make more sense to have a circuit-breaker type provision where if GDP increases by more than x% the amount increases by y%, but I doubt we would want to decrease it immediately when GDP decreases, since that has the potential to cause a runaway feedback loop.
That's really smart. I hadn't even considered that and was naively operating on a default assumption of increasing GDP. Especially during a recession, adjusting the basic-income downwards with GDP could create a devastating runaway feedback loop. I think as you wouldn't want the economy to grow faster than basic income, though, in the circuit-breaker-style implementation as GDP increases by more than x%, the amount should also increase x%, by default. When the GDP is assessed, say annually, it should only increase or maintain the current basic income rate. In the event of an unprecedented long-term decrease in productivity, the congress should be required to take action to lower the payouts.
That's an extraordinary assumption. The majority of nations in fact do not see routine, much less significant, overall wealth increases. Major economies as varied as Germany, Mexico, Russia, Britain, Japan, Brazil - have seen near zero economic growth for the last decade. The US appears in fact to be starting a protracted stagnation of growth, due to its extreme debt (in most every regard from public to consumer to corporate), resulting in problems similar to those experienced by Japan due to its egregious debt problems (low productivity gains, weak or negative income growth, weak or negative real wealth gains, low GDP growth, etc).
UBI can't be implemented in a nation in which population growth is falling rapidly (fewer workers to carry the tax burden), while debt is already sky high, incomes are stagnant, and existing entitlement system IOU's are already set to bankrupt (either directly via default or indirectly by currency debasement) the government (with already dire perpetual half trillion plus dollar deficits with the public debt soaring toward $30 trillion next and annual deficits set to climb toward a trillion dollars).
Median rent in the US is $934 thus this one benefit costs the US goverment as much as this proposed BI would. Unless we are talking about housing where people aren't which is likely a non-starter for a slue of reasons.
To me that only highlights how prohibatively expensive it would be to give BI to people in any amount that would really move the needle
UBI isn't expensive. Its wealth redistribution, not consumption. Military spending is a black hole of money - you get very little R&D or productive GDP growth yields out of it but it stucks hundreds of billions out of the country every year. Social security is better than military spending but usually worse than UBI - recipients of social security are some of the richest people right now as an age class, so transferring wealth to them often doesn't see it stimulating economic growth - it just gets reinvested. Additionally, social security taxes are not progressive - they cap out, and anyone making any money over 10k is paying into them. Its a regressive tax scheme that takes money from disproportionately the working poor and moves it into a richer age group.
It still isn't a black hole, though. A ton of social security money is then spent on essentials. Its much less wasteful than defense spending.
On the other end of the spectrum is a lot of infrastructure spending, especially big projects like Eisenhowers national highway system that built the interstates - money goes in, but the productive gains and economic stimulant from the spending is greater than the money going in so it is a net positive for the economy. I'm hesitant to even call that government spending or debt or the cost of the state since it doesn't really cost anything - you are using money to make money. It is state investment.
Now, of course, state investments have variable success rates. You can look back at successful projects and say they were obviously worth doing in hindsight because they have produced substantial prosperity. The highway system, the national railroads, the panama canal, national electrification, the Hoover dam, etc have all proven valuable. But often a bridge built or rails laid go unused and were wasteful. And then there is the matter of how bad the government is at keeping these projects within sane budets - Boston's Big Dig took significantly longer and cost multiple times more than initially projected, and that brings the value into question after its done whereas beforehand it looked obviously beneficial.
UBI I think is in a very optimal spot on that spectrum. It is immediate wealth redistribution, going almost exclusively to the poorest who per dollar earned spend the most of directly stimulating economic demand that grows the economy most optimally. But unlike infrastructure investment the return is immediate - as checks go out money is spent often same day, and as long as money is moving from slow growth (investment) to fast growth (consumption) its a net benefit to the economy, as long as said benefit is greater than the overhead of administrating the taxes to fund it and the distribution of the money. Which comes back to the infrastructure is great scenario - its great until you are being wasteful and corrupt in spending on it. If money is actually going to building infrastructure or money is actually going to the poor it is a colossal boon. When money goes into private pockets as it does in spades with the DoD it is wasteful. It isn't the amounts you take, it is how you spend that, and how predictable your spending and taxing will be going forward - markets can handle very high taxes as long as they are predictable.
I am no fan of the military and I agree with your premise, but I would strongly, strongly disagree with the "little R&D" portion of this comment. A great deal of technology we take for granted today was first made available due to the military taking on the huge reverse asymptotic cost curves of early adoption and invention of new tech.
The military is an inefficient and potentially immoral R&D department, but it is not one that generates very little. A quick historical look at what has come out of the machinations of war and preparing for it will illustrate the point, and fast.
In terms of R&D for dollar spent, the military is awful compared to fairly parallel state institutions like public universities and NASA. If you want R&D, you shouldn't do it indirectly through researching ways to blow people up and murder - you should just do R&D spending.
A lot of the problems when discussing the military budget are intentions. Nobody is proposing to grow or keep the current scale of the military on the idea its a valuable source of research. It is in the same vein as how you would not fund a basic income for research purposes - surely a lot of valuable R&D would actually come from a UBI by letting more people experiment as a hobby, but you wouldn't use it as an argument for making a UBI because the research per dollar spent ratio would be awful compared to dedicated research institutions.
Funding CERN et al is on the order of magnitudes more bang for your buck if you are spending money to advance science than spending it on a military.
Which relates back to my original point. All government spending needs to be interpreted through one of two lenses - either the government is absorbing an absolutely unavoidable expense and using its scale to lessen the burden (infrastructure maintenance, healthcare, retirement) or it is investing money with the intent for it to improve the country. There is absolutely a lot of overlap, but we are back at intents - when healthcare makes your citizenry healthier more often so they can be more productive that is a nice perk but does not come close to justifying public healthcare spending. Infrastructure can fall into both camps - building last-mile roads is absolutely not in all likelihood going to grow the economy - people would live more densely if not for state subsidies on public housing developments hooking into the public road network. But when they build highways to increase traffic throughput that is almost always with intent to grow the economy.
A UBI falls in both camps, but conservatives should focus on the later benefits. The economic growth potential. On the topic of the military budget, anyone arguing for the current scale of the US military is arguing for a "necessary expense" perspective, not an investment one. Because its investment value is atrocious. And in general people are very skeptical of anything suggested to qualify for the first camp - and we should always be skeptical of those expenses, because they are the legitimate expenses where government spending actually contracts the economy.
UBI doesn't need to cover the median cost of living in the US. In fact with just income tax that is an impossible line to hit as it would certainly trigger inflation.
But that doesn't mean that X dollars won't matter. In fact that is the entire purpose of this study "If we give people $1000/month, what happens?". Sure it isn't representative of what would actually happen with BI but if the study is done well and its findings are sound through review, then it would be a great way of answering "would that amount of money matter".
If the government can't afford it then the UBI recipients can't either.
You're right - it serves both conservative and liberal ideals, which is a good thing.
Watch this to understand why it would not be the case: https://www.youtube.com/watch?v=xtpgkX588nM
Two arguments against this. The first is that you are comparing a steady income with an insurance. You can always spend your BI on insurance. Wether insurance would be more expensive if you had BI or not, has not been proven in this model, but it could go either way.
The second is that BI in that tought experiment, even if you eliminated insurance-type nets, would still yield lower poverty. Its just not the exact same people. That is one of the hardest problems on any social welfare program: if you need to improve everyones position absolutely and relatively, you basically cant do anything. You have to let some lose for others to gain.
We don't need thought experiments to analyse UBI. There's data on trials of it going back half a century.
The book "Inventing The Future" by Nick Srnicek and Alex Williams gives a detailed explanation of how to use UBI to move beyond neoliberalism.
5 years is an eternity in today's age, progression-wise. Hopefully results will be published as the trial progresses.
99pi recently released a podcast on the basic income research being done by the Finnish government & YCombinator:
http://99percentinvisible.org/episode/the-finnish-experiment...
The design is flawed from the start. If you have any sort of income guarantee in a system where
(i) there are others in the same currency area who don't receive the income
(ii) the amount is insufficient to live on
(iii) there are insufficient jobs overall in the economy for all that want them
(iv) it isn't permanent
then all you actually have is a tax credit system with a different withdrawal mechanism. https://medium.com/modern-money-matters/is-basic-income-basi...
The pathologies of income schemes that cause all of them to be degraded and cancelled build up over time as people adjust to the new scheme and work out who is failing to reciprocate.
Overall basic income is theft from workers and will be seen as such by those workers. https://medium.com/modern-money-matters/is-basic-income-basi... They then agitate to have the income removed from those seen as cheating the system.
What we need are guaranteed jobs at a guaranteed living wage, paid for by the state working for the public good. Then private businesses finally have to compete for labour and that maintains the wage share.
People need something to do where they can be of service to others. Not paying off and left to rot.
Given that the discussion is a research proposal to test basic income as a concept, rather than focus your comment on dismissing the concept of basic income (which it's worth noting is totally fine to do but isn't relevant to the thread), why not propose changes to refine the study so that it may more effectively assess whether basic income is viable?
You would need a small nation state to run the experiment with its own currency and limited natural resources (as in, it can't just sell oil and distribute profits like Alaska).
It would also have to be very librial about borders and illegal immigrants to simulate the US.
I would suggest the minimum size of this nation should be around 15+ million people.
It should be noted that the parent is basing his conclusions on Modern Monetary Theory[0], a heretodox economic theory in which fiscal policy is unconstrained, deficits aren't relevant, and a country is always able to spend.
[0] https://en.wikipedia.org/wiki/Modern_Monetary_Theory
No, this is way off.
MMT doesn't model fiscal policy as unconstrained in real terms, only nominal terms. And given the legal authority, of course a sovereign issuer is always able to spend. In this case spending is merely typing digits into a computer. This fact doesn't imply deficits/debt "aren't relevant", but rather deficits/debt work very differently for the currency issuer as opposed to the currency user.
The mandatory Milton Friedman quote:
At one of our dinners, Milton recalled travelling to an Asian country in the 1960s and visiting a worksite where a new canal was being built. He was shocked to see that, instead of modern tractors and earth movers, the workers had shovels. He asked why there were so few machines. The government bureaucrat explained: “You don’t understand. This is a jobs program.” To which Milton replied: “Oh, I thought you were trying to build a canal. If it’s jobs you want, then you should give these workers spoons, not shovels.”
Disagree, basic income is equitable distribution of a collective legacy of increasingly advanced tools and a necessary recognition of limited natural resources and duty to share a small portion to every human being on the basis of birth into our society, aka social contract.
Your abstract 3rd-party justification from a distance fails to note the rest of that sentence:
"Overall basic income is theft from workers and will be seen as such by those workers."
When enough of those producing wealth decide that UBI = theft, they aren't going to just continue producing without pushing back. Personally, if UBI is implemented, I will "go Galt" and move to a self-sufficient homesteading-style life, leaving any cash-requiring activities (like paying taxes) to my $UBI/mo check. That I am a productive person does not mean my productivity will necessarily be taxable; I grew up in a live-off-the-land family, and would be happy to return to that lifestyle if you're going to just take a big chunk of my income just to give to others.
There are enough jobs (yes, there are). Wealth is not durable (you eat a hamburger, $1 of economic wealth turns to *). Encouraging idleness by funding it is an unsustainable economic strategy, because so many people find paid idleness a desirable lifestyle.
You're close, and it's an easy mistake to make since it seems intuitive. However, the reality is that people find THE IDEA of paid idleness desirable. Small N, but everyone I know who has found themselves in that position has only remained idle for a very short time. Productivity quickly returns, although not in the form of trading time for money.
I believe you but that is anecdotal. I know people that not only want to remain idle if their basic needs are taken care of but currently do, and have been doing it for decades.
Like most human traits, there is a wide degree of variance. As such there is no doubt in my mind UBI would allow a greater number of idlers because it would be more easily available. Just as it would allow more people to trade a job they don't like for a constructive activity they do.
While I actively help the poor, it frequently appalls me how many of them choose to live that way. Basic needs met, a significant percentage find no reason to do more than watch TV, eat, and reproduce. Hence my comment elsewhere on this thread lamenting that Y Combinator, having focused on financially assisting the hyper-productive, have lost comprehension of how much of society is populated by those that only produce because they have to for survival; supply basic survival, and they do nothing.
(I'm not saying that about all poor, but the fraction thereof who are is significant.)
I'll grant you that you've found a clever justification for stealing from producers. The question is what do you do once the people who are generating the value no longer agree?
The ever shrinking % of people who can viably trade labor for wages will have to count on a robot army to cleanse the world of undesirables. Either that or you pay people to dig holes and fill them back in for moral value?
"People need something to do where they can be of service to others. Not paying off and left to rot."
No, they need fulfillment in their life. Do you think flipping burgers at McDonald's provides that?
UBI allows people to not have to work long hours at shitty jobs. That is something that should be praised, not derided as "theft".
It blows my mind that the allegedly smart SV elite think Guaranteed Basic Income will solve more problems than it creates.
But maybe there much smarter than I, and they secretly want to create these problems so they can capitalize on them.
Or maybe, they want to sap the proletariat of their drive so that the elite can remain the elite forever.
I wonder the same.
My tin-foil theory: The poor are no longer able to purchase consumer goods as their entire income goes to their basic needs. With the middle class being pushed to the poor class, this will have devastating consequences for our consumerist-based economy. Thus, BI is nothing more than recession prevention.
Of course, that's probably not the case.
Or maybe they want to do a study to figure out how it all pans out, rather than making wild claims with nothing to back them up.
A huge part of what makes basic income appealing is that it is unconditional and guaranteed. Otherwise it seems like it would create unsafe levels of government control.
For many people, BI would end up being a large portion of their income, such that losing it would be catastrophic. Now those people would become beholden to any government demand made on penalty of revoking BI.
If a government enacts unconditional BI in the year 2020, who's to say they won't change their minds in 2028 and make it conditional on good behavior?
Are there any mechanisms that could make basic income a true unconditional guarantee?
Definitely a big concern.
Maybe a government backed cryptocurrency? One that distributes the BI through some sort of immutable smart contract? Lots of problems with the approach, but maybe we can solve enough of them.
Now, whether our current governmental or political realities would ever give up control in that manner is another story :(
Nothing under control of a government is immutable. This is because governments have a power withheld from civilians: that of legal lethal force.
This is already an issue with Medicaid. 65 million people depend on the government for free healthcare and cannot afford to lose it.
Agree, but no need to only point down.
Social security income is indispensable for the majority of pensioners now. It used to be only for day laborers who it was understood never had an opportunity to save. Things have changed for sure.
Similarly, most old people wouldn't be able to afford their healthcare if it wasn't for Medicare, even it they never even filled out a Medicaid application.
They could make it a constitutional amendment or whatever your countries mechanism for codifying founding documents is that requires more than a simple majority to make law.
You could e.g. require a national poll for any change to the BI. Or it would not be introduced nationwide but per state or even communal so individuals have more control over what happens.
My guess on how it will turn out:
1. People given Basic income and minimal addictions will fair best 2. People without basic income and minimal addictions will fair second best 2. People without basic income and addictions will fair third best(drugs, major alcohol, internet/game)
4. People given basic income and addictions will fair worst(drugs, major alcohol, internet/game)
I'm probably completely wrong. 3 and 4 could be switched in which case Basic income would be always better.
My general premise is giving people with a strong addiction money without some kind of life structure is a bad idea.
Please don't down vote me if you disagree. Please just comment on how you disagree.
Agreement/disagreement are not the only reasons for the voting system. Relevance is important, too.
I agree that my opinion/guesses are irrelevant. But, it started a conversation that could become relevant.
- or devolve into BS you never know.
Makes sense but I still imagine addicts with UBI will fair better than people with addictions under the current system.
It's _way_ easier to be a functional addict if you have financial stability. The real problems with addiction (crime, disease, etc) start to compound when you can't afford the habit.
I do see a lot of existential crises occurring in people born under the current system who transition to a UBI lifestyle. Probably less so for those born into UBI.
That sounds awfully static. The interesting thing will be to see if people with unconditional money end up becoming addicts at higher rates. Are the study researchers planning on making the data openly available? Is it going to be cash payments, or will it be some sort of debit card where the researchers can track whether people are spending money at grocery stores, or at casinos?
My bias is that inherited wealth passed down down through the traditional family structure remains the greatest guarantor of multi-generational financial prosperity and stability. Even a single member of your immediate extended family attaining professional status as Doctor or Lawyer results in a higher probability of entry to the middle class for the entire family than any other indicator.
The big question proponents of Universal Basic Income must answer is: does direct stimulus of aggregate demand result in real growth? Is risk de-incentivized when a labor market participant is not required to work for marginal increases in "happiness"?
Taking our current central bankers experiments with quantitative easing (and now, perhaps, quantitative tightening) as a proxy for injecting liquidity into the system I think there is at least one evident result: bubbles forming in even the unlikeliest of places.
In any case, full support for YC's experiment and can't wait to see the data and results. Best of Luck and thanks for your vision and efforts!
One interesting thought, maybe, would be, as robotics/automation takes over and grows, is to introduce special automation tax from which BI could be partially (or fully?) funded? Maybe ti could alleviate some of the inflation concerns.
Start small. Give very adult citizen the same fixed amount. Deduct that amount from existing welfare payments.
We now have a guaranteed universal Citizens's "Basic" Income, albeit at a very low level, paid for by taxpayers via the normal progressive tax system and which primarily helps the working poor.
Iron out all the inevitable implementation problems.
Then raise the level to the minimum level for welfare payments and remove a swathe of bureaucracy.
Observe the results while gaining a sensible Welfare System based upon "From each according to their ability, To each equally, with neither favour nor discrimination".
Adjust as necessary.
I think peoples choices in a situation like this will be wildly different than if there was a government provided basic income that was available forever, or at least had the appearance of being available forever. Having extra money for a couple years doesn't let you permanently exit the workforce in the same way a permanent basic income would.
As well I think for established people with kids and other commitments 1000 isn't nearly enough to get by but there is a real danger that for young adults you give them this option of completely checking out of society if it's available forever. Rent a cheap house with friends, smoke weed, and play videogames sounds like a pretty decent option to a lot of 18 year olds. Or even younger maybe? When can kids legally drop out of high school?
I really think basic income is a bad idea. I don't think we are anywhere near the point of mass replacement of the entire workforce with robots/ai even in the developed world. Forcing people who are working to pay into a system that lets people contribute 0 to society while enjoying a decent life(24k for a couple/roomates is completely livable in many parts of US especially without a car) is both unfair and likely to cause significant social strife between workers/non-workers.
I really think a basic livable wage with the removal of the minimum wage is a far better solution. Set some minimum livable wage based on 40 hour work week and have the government top up wages rather than incomes. Obviously there would have to be some sort of progressive claw back system to encourage people to find better paying jobs and not just go with the easiest thing available. Maybe have the government act as an employer of last resort creating some busy work cleaning streets or repairing roads.
I really think it's important for people to have something to do when they wake up in the morning and to be contributing members of society. Not only out of a sense of fairness for the people that are working but I think it is incredibly unhealthy to not have any responsibilities in life.
I suspect a lot of people here don't appreciate this because they (and many of their friends) have a much different mindset. But I can easily see a lot of that sort of behavior and then, ten or fifteen years in, they decide they want something more out of life, start a family, whatever. But now they're 30 years-old with no skills, never having worked a real job, minimal education, etc. Pretty hard to do a reboot at that point.
I suspect you haven't met many of these type of people.
They spend a couple of years doing that, get bored and get on with enhancing their lives. The biggest stoner/gamer I knew is now an extremely well paid city guy. I lived in a dead town and the extended 100 or so people from my age group that I knew in my teens and twenties, a large amount of whom spent a lot of time gaming/smoking, now occupy a huge variety of positions in society across the country (and some the world) in their 30s. I can actually only think of one person who's still a bit of a waster.
Most people actually want to have a good life and you and the parent are simply snobs who don't know the sort of people you so condescendingly talk about.
Commenting on the research design.
This research, to me, seems to be ignoring the biggest open question of UBI. All tests to date have looked pretty good, but have only been done on a micro level. The fundamental issue one really needs to answer for UBI is the macro scale effects.
As a society, if we were to redistribute trillions of dollars without commensurate economic value being directly created, we'd expect to see large scale inflation.
Money is a complicated subject, but essentially it represents a transfer of a future scarce resource. For commodities, the cost is essentially the sum of labor to generate it (either to mine the raw resources, build the factory, discover the technology, etc).
If no economic resource is being added to the economy, then you are just devaluing money. That is usually very regressive, and in this case could be made worse by people slightly reducing their economic labor because of the extra income stream. I could see this leading to a bad cycle, where any economic gains due to increasing UBI are later undermined.
Anyway, it would be nice if UBI worked, but I've seen no evidence that it will in a large system. It would be nice to get confirmation of previous UBI studies, but this research proposal is likely to just generate the same data, without addressing any of the open fundamental issues.
Where are the results of the feasibility study in Oakland?
I like to do this though experiment sometimes.
Let's assume some sort of Basic Income is enacted. A standard livable amount for all adults, that will scale with inflation, and even with number of dependents.
Some people will still work. Will still pursue hard working jobs that contribute to society, that push our capabilities as a species forward, and add value (important). But think about most of the world and people that you know...I'd imagine that on average, people would elect to not choose to - for lack of a better term - "work hard" to boost their income if their basic needs are covered. Some folks would just love to let others take the wheel, and enjoy their netflix and soylent in peace. This needs proof of course, but I believe that's an assumption we can make for sake of discussion.
Now...we all know that automation is coming. Already we see many of the tasks that humans depend on for survival and prosperity being done faster and more efficiently with artificial intelligence and robotics. Things like harvesting natural resources, agriculture, production of goods, and even building infrastructures. The responsibility of these tasks is shifting away from the people, and into the hands (clamps?) of specialized machines.
So, assuming 1) we have individuals who are having their needs provided for, but not making a measurable contribution to the survival of the species/system and 2) we are trending toward automation and hyper optimization for all the processes that we depend on for survival...when do AI and/or algorithms start to find that certain people are not worth being provided for? Who manages these systems? Someone that we elect? An artificial entity?
I'd honestly love to hear others thoughts on this. I know I would rather fight and claw for survival than pray to someone that they don't choose me to shoot off into space.
It happens a lot where people make this jump from autonomous machines to sentient machines. It isn't a small gap. Going from domain learning and genetic algorithms to develop solutions for a hardcoded task to sapience is a huge leap.
It won't be accidental, or at least come out of nowhere. We should be able to see it coming even if it will come out of evolving algorithms. There will absolutely be intent in constructing intelligent artificial life.
I'm curious why another study is needed. Is it because the results of past studies didn't make a strong case for the UBI?
Many countries already have a form of age restricted UBI.
The state pension.
I know many pensioners in the UK that work as the state pension does not provide 'enough'.
Enough for what ? Eating ? Maintaining a family house that is not residence of your children anymore ? Having a car ? Covering additional health expenses ?
Really like the idea of basic income. However, after living in the real world as long as I have, I know all it would do is raise rent by exactly that amount, everywhere.
Will this research enable conclusions about the macroeconomic effects of UBI? It seems like it'd be difficult to predict how national and international markets will react to an entire country suddenly receiving a UBI based on a study of only a few thousand people.
I think a better direction would be if YC Research could figure out a process to growth hack a new high density city from scratch instead of everyone crowding into physically constrained existing city. Make YC entry conditional on relocating to somewhere besides Silicon Valley/San Francisco. Maybe somewhere in California (Redding, Modesto) so you have the same rules/regulation as in California but with minimal earthquake risk, plenty of land and existing water resource Maybe even do something like the Amazon second headquarters RFP.
Sort of like what PG describes here: http://www.paulgraham.com/pgh.html
The idea that UBI will wipe away the ignorance and cultural dogma that keeps poor people poor is absurd.
How many lottery winners hold on to their winnings?
Let's be realistic. If you give the uneducated poor free money, the only thing that will change is how much money they have to spend on junk food and dated electriconics.
UBI as a policy in a place like the U.S. is hopelessly niave. Our culture of poverty if the typical culture of ignorant poverty. I speak as someone who lived among the poor-hell, in high school I dated two women from the same trailer park, poverty in the U.S. is about getting mine, and often times about getting one over the man.
These aren't temporarily downtrodden future intellectuals. These are people who haven't understood education or work for generations. But, on the other hand, who are we to claim our culture is superior?
No one is saying that.
Not relevant.
That's the point. UBI isn't welfare, it's not meant to rehabilitate people and make them into workers. If most people who get UBI choose to live off it and not work, and remain poor, fucking great, that's the whole point of the program, to reduce the working population down to those who actually want to work as there aren't going to be enough jobs for everyone and many people would choose not to work if they could.
You just really do not understand what UBI is about, not at all.
That's 66 million dollars, if you're wondering.
Couldn't they research and study people who already don't work for a living? I mean those who already own capital and don't expect the government to steal some for them?
That would sure be cheaper.
UBI is great, now everyone will be able to pay for healthcare!
This is a test of charity, not UBI.
1. The money involved is voluntarily donated, not confiscated from taxpayers - an essential difference between tax-funded vs charity.
2. 3000 recipients is vanishingly small on a state or federal level. When everyone gets their monthly $UBI check, supply-and-demand dictates that "free money" will be duly devalued, with prices of low-end essential goods/services rising to match (say, basic rent rising to $1000/mo).
3. Many who currently produce wealth to make ends meet - paying income-scaled taxes included - may very well be enticed to "go Galt" by seeking a self-sufficient lifestyle where $UBI/mo covers all cash needs without one having to get a job per se. (I find this option quite attractive.)
4. Old aphorism: "tax what you want less of, subsidize what you want more of." UBI implements/enforces this by punishing the productive and rewarding the idle. Yes, some people will use the opportunity to do laudable activities - which won't necessarily contribute to the economy. Yes, some people will use this to bridge current welfare-to-work transition issues - which are better handled by narrowly fixing that bridging problem without having to involve the entire population. Yes, more people will wonder why they're pulling other people's economic weight, and consider the merits of humble low-income living.
5. I realize Y Combinator is in the business of giving money to people to encourage productivity. Methinks they're too used to working with the rare hyper-productive, and don't grok how many people are quite content with low-cost no-effort zero-productivity living.
At first glance this seems intuitively correct, but I'd encourage anyone reading this to control+f my username in this thread for arguments showing otherwise.
I did, and found your arguments wanting. You're conflating local with national behaviors, and conflating high-value goods/services with low.
Take a low-income area and give everyone $1000/mo for no reason (they're not trading any local productivity for it), and rent & other basic costs will immediately rise accordingly. "Move!" you (and I) say - and the limited supply of inexpensive rural housing (matching UBIers' lack of need for jobs) will likewise rise accordingly, as the market of renters just vastly increased. Over time, low-end housing supply may increase, but now you've a market of homes which rather pointedly do not have jobs nearby - you've just created communities of people absolutely dependent on UBI.
This will be the result of the steady march of automation displacing the human workforce regardless. Furthermore, the lack of a UBI system in a high unemployment due to automation scenario would lead to complete collapse of the market economy.
We went thru "displacing the human workforce" in the Industrial Revolution. Don't worry, we'll create more low-skill jobs - just like we did back then.
...unless legislators continue prohibiting people from working if they can't produce enough value per hour. Minimum wage is "debtor's prison" redux.
There's plenty of low-skill low-value jobs I could hire people to do, regardless of technological advancement, if only regulations weren't so oppressive.
Fighting the minimum wage is a political dead end. People won't vote for that, since they believe people who work a full week should have a decent standard of living. That's the case in Australia, at least.
In practice hardly anyone believes people who work a full week should have a decent standard of living. If people actually believed that, then no one would purchase goods manufactured in Mexico, China, etc. Instead, it's more accurate to say that people don't want the inconvenience of actually seeing poor people.
Self-interest overrides politics in this case. Forcing employers to pay more is also likely to be preferable to helping the low-paid in a way that involved raising taxes.
Also, self-interest is involved in maintaining the minimum wage, since people may imagine that if wages are dragged down at the lower end, it may pull them down at higher levels too. Minimum wages in other countries don't matter, since they have no intention of working in those countries.
Do people care if wages are higher than they should be, according to supply and demand, and causing some underemployment? Even economists don't seem to agree on the effect of minimum wages. Generally, I'd guess people want more pay for themselves, up to the point that they genuinely fear their own unemployment. It seems that both employees and employers prefer to keep wages a bit over the equilibrium level.
I guess this is the usual "hate the game not the player" situation. I wish there was more local products. I'm willing to make sacrifices and vote with my wallet to make that happen. (And I do when it's a realistic alternative) But I can't do that naked - and living in a smallish town, I'd be surprised if I could buy a full set of clothes here which is not produced in China/India/Pakistan/Thailand. (Without going a few hours to the nearest city)
Yes, everybody who works full week should earn enough to make a living. The fact that I'm wearing a t-shirt made in China is mixed up in this in complex ways, but it doesn't change my position.
I also find this theoretical aspect of UBI quite attractive - the potential for a lot of self-organization into self-sustaining communities of scale in rural, low cost of living areas.
Yeah, these "tests" of UBI always seem to be about the attractive side, people getting money for nothing, and never about the funding side.
With a large-scale UBI in practice, you'd also have the effect of higher taxes that would claw back the UBI from those who have jobs, as well as an additional amount to cover the UBI for those who don't work.
I still prefer a job guarantee scheme for dealing with under-employment. This gives anyone who is willing and capable of working the chance to earn the minimum wage, and hopefully gets some productive benefit in return.
No, that's not what “supply and demand” says. With normally-shaped supply curves, you would expect priced to increase but not so much as to prevent a net increase in what people who are net beneficiaries can afford.
I can't wait for UBI. I have a six figure income, but I'll quit the moment I get UBI, move into a tiny apartment and then spend the remainder of my days happily reading library books.
UBI at 12k a year per person is 3 trillion dollars (which says that's probably the upper range).
If you're making six figures, you can make 20 years of UBI in 4 years and stash it in the bank. Why not quit now?
Can't tell whether serious or sarcastic... If sarcastic, I'll take your point to mean that people already doing well in life are not likely to give up the trappings to go into UBI-funded early retirement.
If serious, look into ChooseFI, the FIRE community, etc. It's totally possible to self-fund the transition from your current lifestyle to the one you're describing.
The Basic Income research project in Finland is certainly relevant here. A podcast episode: http://99percentinvisible.org/episode/the-finnish-experiment... A recent article: https://www.nytimes.com/2017/07/20/opinion/finland-universal...
In real UBI implementation, is it considered taxable income?
Core to UBI is that since everyone gets UBI, and since I pay substantial taxes, I'd pay a minimum of $UBI in taxes and simply get it back as a UBI check for a net total of $0.
BUT... If that's taxable income, I have to pay (say) a cumulative 33% on that additional "income". Instead of a net $0, I have to pay something like $4000 in additional taxes. WTF?
Research like this is dangerous.
Is this a joke? This may as well read: "We'd like to research the effects of Universal Basic Income. We tentatively plan to select 300 individuals from opposite sides of a freeway: 100 will receive a free roast beef sandwich, and 200 will receive a pack of airline peanuts and serve as a control group for comparison."
UBI costs 1- to 2-million dollars PER HEAD to simulate. You can't cut corners on this and still expect to get relevant data. Not only are you not getting the data you want on how UBI would affect human behavior on the scale of a lifetime, you're also totally ignoring the greater sociological impact and resulting economic impact.
The 5-year span is too short to impact human behavior, the 1000-person headcount is too small to observe any greater sociological or economic impact, and the source of the funding (willing voluntary participants interested in UBI) means we're getting zero data on how the public would feel about being forced to fund this.
This research addresses literally none of the strongest arguments against UBI.
Maybe this is cynical, but I think they might already know all of this. They're just doing it anyway because they know a horn offering 5 years of free money will get their blog a lot of attention, and they know the results of this "research" will be biased toward the pro-UBI result they already want.
I guess we can all look forward to decades of liberal arts majors citing the outcome of this research as if it means anything. It's really unfortunate too, because these are the issues that really matter.
People spend all their energy arguing about race and sex and abortion and gay marriage and cops and who gets to use which bathroom, but nothing impacts human prosperity (and suffering and death and peace and war) the way macroeconomics can. That's when policy gets real and impacts people on a scale with a lot of zeroes on the end, and when enough people are misinformed about something like this, it has the potential to take humanity down a very dark path.
Congrats to the ycr team on the progress and accomplishments to date.
I must say after reading through to the full proposal, I was a little disappointed it doesn't include much that stood out as different or "disruptive" or "new" as I would have hoped given that it has grown out of YC. YCR has definitely done some cool things and is moving very quickly and again congrats on the successes so far.
Maybe other things are going on behind the scenes that were not included in the proposal and are not on the website? I couldn't help but get the impression while reading the proposal that this sounds like a proposal that any ol' well-funded private foundation could have come up with, and unfortunately I fear the study will run into the same problems those other private foundation type studies run into while in progress and once completed. What a waste and shame if that happens.
I fully understand there are limitations to these studies, and rules to play by, and there are many working components as these studies grow bigger in scale and touch more people and must interact more with the government and press then research teams kind of need to become more risk averse and CYA a lot more. But couldn't there be a secondary smaller research studies going that actually try new and interesting UBI research and try to answer some of the harder questions UBI faces as well as look harder at some of the multi-sigma rare events (pros and cons) of UBI that could happen.
Also I want to commend YCR for what looks to be a legit "people first" research approach. I wish more policy type researchers follow your lead and think about how people might be affected or not affected as a result of policy instead of just making assumptions based on big macro numbers changing and then trying to change those numbers.
Again no offense, but this study feels like similar studies: Get some smart brand name Phd's, spend a lot of money and spend a lot of time to get data needed to calculate some "results" numbers to support a policy idea or two. Great, these "results" will end up in some random think tank type policy articles and papers that government representatives have thrown their way every day by various lobbying and advocacy groups. These results will probably make a few good buzzworthy headlines on various news and "pseudo" news sites from NYtimes down to buzzfeed. Great.
Headline: "A new large UBI study just showed xyz positives happen under UBI but there's a couple exceptions...".
This is a lot of money and time to run a study you know no matter how successful it is what UBI naysayers will still have tons of ammunition to complain why policy shouldn't be changed yet or at least not dramatically. What then? Another 5 year study?
Cool story bro. Good studies that lead to good policies do 2 things: 1. They show evidence of doing the good thing they are suppose to do. 2. They shutdown most or all of the things the other side is using to prevent the policy from passing. This study is not doing enough of either, especially #2.
Are you guys studying things like: The psychology of people once UBI is more common and less stigmatized not just the psychology of getting unconditional money? How to pay for it? Seriously here. What will the uptake rate be? Will the first years pull down tax payers into UBI before re-adjusting and they return to work. What are you really shooting for here? 20% 33% 50% feeding back into the payer loop? What tactics might groups or business use to reverse or combat the psychology on UBI, what will be used to take advantage of people who suddenly have money and no restrictions on it? Hello more MLM schemes? Look at Norway news this week and their SWF, don't make that mistake.
I realize you have aggregation problems and methodological individualism stuff and what not. But start a moonshots division in YCR please. Good luck.
A few questions:
Will there be travel restrictions? (if someone is receiving this money, do they have to stay in the same city/country, or can they move?)
What age ranges will be included in the study? [I found the answer in the report: it's 21 to 40]
Is there a control group that won't be interviewed regularly? I'm more motivated when my boss talks to me. Requiring people to meticulously manage their time will already bring a productivity boost.
What about controlling for the end date? My contracts last for 1 year at a time. If I suddenly knew I'd have a steady income for 5 years, that would be a huge relief, and I'd change my lifestyle accordingly and settle down (e.g. be able to plan to start a family). That feeling is independent of the amount of money, it's just the stability.
My first feeling is that living with basic income will be similar to retirement. (and there's a lot more data about what retired people spend their time doing).
Robot tax. Fund basic income on the basis whereby every job that is replaced by automation, a tax must be paid by a company with more than 1000 employees.
Given the skew of poverty in the USA to black and latin populations you might want to consider hiring several full time people on to the team and leadership who can bring the understanding that can only come from being part of those communities. Otherwise this can be attacked as being dominated by rich white people. While the intent is clear the execution needs to match the targeted end users.
You may also want to consider the efffect of health care. In other UBI environments free healthcare is a given. In this experiment healthcare costs can easily cripple the impact of the regular income. Control for that by providing health care insurance, or make it two experiments by doing some with and some without. If that doesn’t work maybe consider doing this experiment in another country.
I'm somewhat doubtful of the design as it's explained in this blogpost, seems like there will be lots of treatment externalities. I'd really recommend anyone who's interested read http://cega.berkeley.edu/assets/cega_research_projects/1/Ide... for an explanation of why a totally randomised control trial is the wrong choice for things like this.