One of the first pieces of advice I had when my company landed its investment was to pay ourselves a decent (not extravagant) wage so that my time went on worrying about the company rather than how I was going to afford to do things in my personal life. The same is true for employees - if they're paid a good living they will spend more time on thinking about problems in their job instead.
If a government were to do that for everyone it seems pretty obvious that society will be better off - people will spend their time working on things to improve everyone's life rather than worrying about how to afford their rent.
The basic income concept is intriguing to me (because it simplifies things) but I do not think it will work for this reason: Who administers the basic income? The government and by extension politicians. Once they have every single person who breathes on the dole, this will give them unbelievable leverage against the people.
If the government is giving everyone a check, how hard is it to argue that the check should be more? Not hard. How hard is it to reduce the amount of the check. Almost impossible.
It will eventually devolve into a problem like Greece has now. Too many people receiving money, not enough people paying in.
Besides that, asking any government to take money from the people, run it through the giant bureaucracy machine, and magically produce a net benefit to the people is both logically impossible and naturally never going to happen.
I'm sure it will be attempted in America at some point and the "public servants" are licking their chops.
"Besides that, asking any government to take money from the people, run it through the giant bureaucracy machine, and magically produce a net benefit to the people is both logically impossible and naturally never going to happen."
It doesn't matter if redistribution is inefficient in terms of dollars if it's efficient in terms of utility.
The idea that a rich person gets less from money than a poor person does is called diminishing marginal utility.
An example of this is $3,340 can buy a very rich person a purse, or it can buy a very poor person the life of their daughter.[0]
Now suppose that this government bureaucracy is terrifyingly inefficient and burns one dollar for every dollar that makes it to the malarial foundation. This would mean that a rich person has to give up 2 purses to save one life. In most people's books this is a huge gain in utility, and is why even if redistribution is inefficient[1] financially, it is very efficient when measured by utility.
[0] - Give well estimates that the malarial foundation saves 1 life per $3,433
[1] - The latest papers by the IMF actually argue that redistribution does not reduce growth.
> Besides that, asking any government to take money from the people, run it through the giant bureaucracy machine, and magically produce a net benefit to the people is both logically impossible and naturally never going to happen.
So apparently the federal highway system isn't a net benefit? How about the internet?
Also in more direct terms, the government "magically" made profits by bailing out AIG, GM, and so on -- so we got taxpayer money (or printed money, doesn't matter) being used to create (a) more money than was used, and (b) the net benefit of not having the economy implode together with the more arguable net benefit of (c) GM staying in business.
As an aside: a friend of mine used to work as a transport economist, trying to figure out the net benefit of government projects. (This was in Australia, but Australian politics is every bit as borked and corrupt as American.) Typically the cut-off point for a government road project was a societal benefit / cost ratio of 20/1.
The thing about corporations -- they raid the societal common (the benefits of public education, civil order, roads, etc.) and make profits "themselves".
> asking any government to take money from the people [...] and magically produce a net benefit to the people is [...] impossible
But that happens already in the country where I live. People pay taxes, and via taxes, we are able to provide health care and university education to everyone. I like this system, and I'm one of them who pay taxes. It's good for me if everyone is well educated, and healthy.
Whether or not a basic income would work, depends on the number of citizens. Fairly few, and many efficient machines and robots that can do most of the hard work, then it'll work okay. Too many people, then basic income won't work I think. In the future, thanks to contraceptives, I think there won't be too many people.
>Once they have every single person who breathes on the dole, this will give them unbelievable leverage against the people.
That may not be a bad thing if we're talking about people who contribute nil to society.
>If the government is giving everyone a check, how hard is it to argue that the check should be more? Not hard.
Not hard to argue, very hard to accomplish. Political change in many countries is slow and welfare recipients are rarely afforded much sympathy by the working and managing classes.
In any case, the real function of basic income is so much more than a moral institution (we've heard those reasons a million times and I won't touch on them here). The exciting thing is that it gets the useless and/or uncommitted to self-select out of the labor market. That means better productivity, higher quality services, a better work environment, lower labor supply and higher wages. They can continue contributing little-to-nothing, be provided a reasonable minimum by local standards, and leave the rest of us to accomplish what we want to in business, research, etc. That would be a HUGE weight off the backs of workers and companies, and I would gladly pay to keep people who can't be bothered out of work. Make no mistake, we're already carrying these people financially and professionally. Not having them gum up our operations would be well worth whatever instinctual annoyance their mooching causes.
> "Besides that, asking any government to take money from the people, run it through the giant bureaucracy machine, and magically produce a net benefit to the people is both logically impossible and naturally never going to happen."
Your logic is sound, but you've misunderstood something crucial.
Where does money come from? In short, money is created in one of two ways; by government spending and by bank loans. All money that exists in the rest of the monetary system was originally formed in one of these two ways.
From the viewpoint of the worker, money exists only after something of value is created, after all that's how we get paid, we do the work then the money ends up in our bank account.
But in reality, money exists before we earn it. The money in my bank account and your bank account isn't 'ours' before it's someone else's.
The way that money is spent into an economy has a large role to play in the the quality of life of a society that is based on money as a medium of exchange. Some of the ways the money is created can be destructive to the economy (for example, when mortgage values increase faster than wage values), whereas other ways can boost the activity of an economy (for example, healthcare spending).
The role that the banking industry plays in the creation of money has the potential to undermine the social good that UBI could offer, but I don't want to detract from the main point, and the main point is this; understanding how money is created is very useful in understanding how to get the best out of the systems we build on top of money.
UBI organised by a government can just be a different way to spend new money into the system. Aside from the usual effects of inflation it doesn't have to involve your savings or earnings at all.
America will be about the last place to attempt this, if the past (and our current welfare) are any guide.
It's an interesting concept. My immediate reaction is that it creates disincentives to work. In theory it does, but the only data we have is those who are currently on welfare and do not work -- but maybe those people were basically not going to work anyway! We have no competing group of people who are on welfare yet still CHOOSE to work to better their lives, because as soon as someone gets a job, no more benefits! So it's natural that an outsize chunk of people on public assistance don't work -- and the ones who stay on the longest, of course, don't WANT to work. But it undercounts those who go on the system then back out of it as they get work.
Other things that seem "obvious" to result: inflation. If everyone can afford $x for housing, why should housing costs not go up by a similar amount? The same way 2 incomes is now "normal", and the same way giving tax deductions on mortgage interest to make housing "more affordable" means, now that everyone can afford more housing, housing is bid up.
I don't know, but it's a fascinating experiment, anyone who is not paying for it should be in favor of this experiment -- unless you just hate poor people.
I can see that being a problem but what about this solution (to be honest I don't see basic income becoming a thing in the United States in my life time)
Peg it to a CPI? GDP? Or maybe codify it in a constitutional amendment?
> take money from the people, run it through the giant bureaucracy machine, and magically produce a net benefit to the people is both logically impossible and naturally never going to happen.
Seems to work in late stage free markets dominated by 2-3 large-scale players.
It looks like this is not a "saturation" site for testing the basic income theory. All participants appear to start with the same income, but the basic income group receives their income with no strings attached. This can create some unfortunate incentives that would not occur had everyone received a basic income.
For example, if you have one group with a basic income and one group without a basic income in the same population, the group without would be more likely to be hired for low wage jobs because that salary is much more important to them. If everyone had a basic income, then all potential hires would be on an equal footing and it would not look like the non-basic income group is more employable.
One way to test the basic income theory is to give everyone a very low basic income and then slowly increase that amount over time. If basic income works, it should be beneficial even at low rates that do not massively disrupt the tax and welfare system. When this is seen to have beneficial effects (or at least not adverse effects), the rates can be increased.
>the group without would be more likely to be hired for low wage jobs because that salary is much more important to them.
That's not necessarily how it would work. In the UK we've had a top up with tax credits for low paid jobs. What we've seen is an explosion of low paid part time jobs as businesses know people will take them as their income will be topped up by the govt.
Basic Income is sometimes dogmatically derided as 'socialist' thus evil. Proponents of Basic Income - or varieties thereof - can be found on the left and the right of the economic political compass. Even Milton Freedman was a proponent of some guise.
Personally I think it is lazy to dismiss the thinking behind Basic Income as merely communism.
There is no arguing that basic income, welfare, disability benefit etc. are socialist. That is not deriding them, it is an accurate description. It's strange that this is a bad term in the US, not so here in the EU.
That's why I hate political labels. People say UBI is 'communist' because it's similar to one aspect of communism, and therefore must be bad because of all the other aspects of communism. It's a strong failure mode of human thinking.
There is one subtle difference between basic income and welfare systems, which is that welfare systems (even if you remove the requirement to look for work) place a higher effective marginal tax rate on the lower end of the income scale. This might seem like a bad idea, since it reduces the incentive to work for those people. E.g. in Australia, at some levels of income, you lose $5 of welfare for every $10 you earn, making the effective marginal tax rate 50%. However, every redistribution system reduces the incentive to work for some people. Basic income (plus progressive income tax) would make this disincentive gradually increase with wealth. Welfare systems have a high marginal tax rate up to the point where people no longer receive welfare, then the marginal tax rate drops sharply, and gradually increases with progressive income tax.
When viewed in this holistic way, it's not clear which system is better. Some might say that it's not worth "wasting" incentive to work on people who might, for all number of reasons, not be willing or able to work anyway. This is the argument for the welfare state. On the other hand, basic income advocates might argue that poor people are just as willing to work as anyone, and that creating very high effective marginal tax rates for them results in welfare dependence.
The international press seemed to get hold of this last week and the early coverage pointed to a Dutch article with far more direct quotes [1]. My Dutch is poor but my understanding is that the primary aim is as much (if not more) about reducing administrative burden as it is about basic/universal income.
Also, I haven't seen any coverage in the mainstream Dutch press... which is somewhat telling.
I live in france (10% unemployment), and unless you're listed as seeking work, you're not given welfare.
It's odd because they don't really check that you send resumes, nor do they really try to contact companies or just propose you a shitty jobs. The "get a job" mentality is really weird to me, because if you have freedom, and you can't find a job that suits you or that you're just too humiliated to beg all those employers, why punish people for being moochers ?
Unemployment is such a political subject, it always ends up being about social stratification anyways. Employed people are just safe and sound, and there are many parameters and behaviors that keep many individuals away from employment or social integration.
Being a marginal and being unemployed, to me are the same problem.
The UBI solves this problem, since it's injecting money that increase consumption, which in turn also increase business and growth.
> “People say they are not going to try as hard to find a job,”
Or they will bargain for a job that is worth their time so they won't accept a job that won't improve their lives. That is a subtle but important difference from just sitting around because they can.
My bet is that when people aren't bargaining for their life -- food, shelter etc because those things are a given they will begin making trades that are a net positive for them rather than just trying to control their losses. 'Head above water' bargaining is a fact of life for the poor that is easy for the middle and upper classes to forget. It leads directly and almost inevitably to exploitation by the other party that is in a better bargaining position.
Further in the article it talks about young men continuing school and mothers staying home and taking care of children. These are decisions that are made by people who are not desperate and not in a terrible bargaining position.
I'm excited to see the results whether they agree with my intuition or not. We need more policy experimentation in the US and I'd love to see some of that experimentation in this direction.
The more I think about it, the more I really like the idea of a basic income. One of the great things about universal healthcare is that you just never worry about it. I never have to think about what would happen to myself or my spouse or my kids if they get cancer after I quit or lose my job. Whether my insurance will fight me on some treatment, or if it covers the rights things. It's nice.
Basic income seems like it will give you that kind of piece of mind as well. You know that in the worst case, you'll have a hassle-free, indefinite, (modest) income to get you by. That's worth something.
They are not testing a universal basic income scheme. They are testing an unrestricted basic income scheme, for welfare recipients only. If the experiment is a success it would mean that welfare schemes will become less paternalistic.
Can this really work when applied just partially? This experiment is about ~250 people with basic income in a large city. (The text mentions 300 people, but some of them form a control group that doesn't receive basic income.)
So if any of these selected people will try to find a job, they will probably voluntarily "lose" it to somebody to really needs that job. Even without that moral issue, this makes still sense from a business point of view: All else equal, hiring a poor worker is probably perferable to hiring a wealthy one, as the poor worker has more incentives to work really hard.
I wonder how much you'd need to save and to own in order to conduct this experiment on yourself? I've wondered about what I would do day to day if I didn't 'have to work to live'.
I honestly think I'd be doing very similar things. I'd still be programming, and I'd be wanting to make things that'd help people do their jobs better, but I wouldn't feel like I 'had to'.
That alone would improve my sanity immensely (I think), and yet it's only a small conceptual jump between what I'm already doing day-to-day.
When I see that discussion about basic income I am always wandering, who is going to pay for that?
I assume the money will not be printed (this would not help, as inflation would make that income very small).
So the country that applies such policy must have some way of finding money. Some countries have natural resources that they can sell, so the problem is solved. But how about the rest?
I guess this will be financed by those, who are earning more money.
Let's forget about the question if this is moral or not to take away money from people who are working hard just to give away these money to those, who are not working at all.
However the taxation will make costs of work higher and higher. Country economy would become less competitive.
In addition avoiding taxes would start to be really profitable - people would start opening fake companies abroad, create fake costs, etc. it happens now as well, but the scale could be much bigger.
As usually, big players would be able to avoid taxes, so the one who would be hurt most are the "middle class". Taxes will eat their profits and the gap between the best earning people and the rest would be growing and growing.
For me it looks a bit as if we were trying to solve the problems caused by goods redistribution by applying more goods redistribution.
I am always wandering, who is going to pay for that?
Most countries contemplating this already spend a lot of money a whole host of welfare and various support and safety net systems, as well as the massive bureaucracy needed to administer these systems. By replacing the massive patchwork of existing systems with one simplified and unified system, you can save a lot of money through reduced bureaucracy and increased efficiency.
Basically this system won't be added to what is currently there but replacing an already expensive and highly inefficient system. So while it may end up being slightly more expensive it won't simply be a completely new cost added to the budget. There may even be secondary savings from things like reduced crime rates and increased health.
When I see that discussion about basic income I am
always wandering, who is going to pay for that?
The typical justification is that it pays for itself in simplified management, improved education, lower crime, etc. I haven't seen the sums, but given that the US incarcerates 1% of it's population at exhobitant (direct and indirect) cost, it doesn't seem that unrealistic.
Let's forget about the question if this is moral or
not to take away money from people who are working
hard just to give away these money to those, who are
not working at all.
We might have forgotten it, but you brought it up and left it hanging like a yeasty fart in a confined space.
Your interpretation of 'moral' here is a narrow one. Socialism is a moral economic solution; it's just not as efficient as well-regulated free markets. In a post-labour-scarcity society this will broadly be moot anyway as much fewer of us will have marketable skills.
Update: I say socialism isn't as efficient as well-regulated free markets. It actually depends on the market. The UK's NHS for example covers the entire population and costs less per capita than the US spends on Medicare (which only manages to cover the elderly). Funding healthcare through insurance creates moral hazard, conflicting incentives, information asymmetry, etc. which adds up to a deeply inefficient market.
The same people who are paying for the other welfare, unemployment and disability payments, the lower tax brackets for lower incomes, etc. Those are all things that basic income could eventually replace.
It's not like there's free money coming out of nowhere, it's simply a smarter and more efficient way to distribute the money that's already there.
The big advantage of basic income, though, is that it rewards working more than what we currently have. It's currently possible for someone on welfare who gets a part-time minimum wage job, to end up worse off. With basic income, you always get ahead when you work more.
Most civilized countries already have something very similar - social security. Everyone who works pays into the system that distributes that money among those who are unemployed.
It's a type of insurance if you will. If I participate in the system, I can be reasonably sure that were I to lose my job, I wouldn't end up on the streets.
A spectacular example of why this is a good thing is J.K Rowling who was able to write Harry Potter because the British welfare system kept her in reasonably good shape after she lost her job -> http://imgur.com/gallery/FIQYq
I've never understood the exact differences between basic income and social security, but it fundamentally feels like such a safety net should exist.
> When I see that discussion about basic income I am always wandering, who is going to pay for that?
Just look at all the social "safety nets" that many European countries have. That money then gets relabled "basic income". Pensions, unemployment benefits, paid sick leave, child support money, etc...
For people who are working full-time and don't get anything at the moment, the taxes would have to be increased slightly to offset their "basic income" on average, so maybe with a low wage you would have a small gain, with a big wage you would have slightly less than before.
The advantage could be a massive reduction in bureaucracy. The disadvantage in Europe at least is that many people prefer perceived "fairness" over efficiency, i.e. they are more worried that someone who "should not get that money" will get it than they are worried about their social systems wasting money and peoples' time.
Basic income is openly and explicitly redistribution. Many of us in Europe have found redistributive tax-and-spend policies to be quite successful.
> Let's forget about the question if this is moral or not to take away money from people who are working hard just to give away these money to those, who are not working at all.
In civilized countries those who are not working at all are already given money that's taken from the rich. The big difference with a basic income is that those who are working hard at low-paying jobs also get money.
> the taxation will make costs of work higher and higher. Country economy would become less competitive.
A country with closer income equality will be more pleasant to live in, so maybe people will be willing to work for lower take-home wages and this will balance the higher income tax.
It would be good to have some kind of international tax settlement though. Otherwise we have a race to the bottom (we already see that with corporation tax and e.g. Ireland) that ends in no country being able to tax and the whole world (except for the very rich) being worse off.
> In addition avoiding taxes would start to be really profitable - people would start opening fake companies abroad, create fake costs, etc. it happens now as well, but the scale could be much bigger.
People already avoid tax as much as they can, I don't think this would change that. If you're the kind of person who avoids 40% tax you would still avoid 30% tax, IMO.
> As usually, big players would be able to avoid taxes, so the one who would be hurt most are the "middle class".
The whole idea of it being universal is that it's the working / lower middle class that benefits the most. Blindly assuming that the rich are just not going to pay their taxes is no way to run a government - if they're not paying, make them pay.
We tried without goods redistribution, it doesn't work (19th century anyone ? ). Beyond a certain level of poverty you don't have the lawful/legal means to reach a better situation, you need external help or to turn criminal. There are a lot of (documented) threshold effects.
Beside, without some form of solidarity, a society tends to degrade into some "every man for himself" : the poors use violence (that's all they have), the richs task evasion because they feel no obligation to their fellow men. We have too many examples of that, local or national.
The mechanisms you describe might happen but they may be minor forces in the end. A real economic system is very complex, many many forces and behaviours are at work (and many are social/cultural). A complex reactive organism.
So no, this experience is not silly and it's hard to see what it will produce.
Every time universal basic income is discussed someone claims it can't be done because if we were to do this tomorrow the costs would be astronomical. That's true, but it's a bit like stating in 1950 that the world will never see personal computing because a computer costs millions and there are billions of people.
Universal basic income amounts to (providing or) paying for food, clothing and shelter. What is the cost of food when we have labgrown meat, the robots till the farm and self-driving cars deliver it everywhere?
What's the cost of shelter with industrial scale 3d-printing and robotic assembly?
What is the cost of providing everyone with basic clothing when all the factory workers are replaced with robots?
Stop worrying about the price of everything and start thinking in terms of scarcity. Will the stuff required for basic human survival still be prohibitively scarce in 5 years, 10 years, 50 years?
In theory, a basic income should shift wages from skill to demand. For example, sanitation workers and doctors would get a high wage whereas video game designer wages would drop. (You won't care about a video game when there is 3' of garbage on your lawn.)
In a heavily automated society, the only question we need to answer is, should people have only as much money as they have earned, or only as much money as they need?
If the former, then it will be seen as almost immoral or evil to give a comfortable wage to someone who didn't earn it.
If the latter, then it will be seen as almost immoral for the one guy who owns the robotic factory to reap all of the profit and earn a fortune every year by having made workers redundant.
The third option is to eschew automation entirely and keep a steady supply of make-work jobs, just to justify enough salaries to keep everybody from starving. Which strikes me as more dystopian than the oligarchy in option #2.
The third option is what society does now. Every time you hear politicians talk about "creating jobs", that's what it means, nearly always: the amount of available make-work just went up.
We don't so much eschew robotics, as under-bid them. McDonalds finds it cheaper to hire humans than automate - for now. (The touch screen, card-accepting menus I've seen appearing lately, make the case that this won't last much longer.)
Any discussion of basic income should at least mention the excellent novel by Janusz Zajdel, "Limes Inferior" (https://en.wikipedia.org/wiki/Limes_inferior). I think he very accurately portrays a system where everyone is guaranteed basic income (along with some other interesting and mostly terrifying concepts).
It is true (and sad, I think) that many people, given basic income, will do nothing to improve themselves or their surroundings. But I still think basic income is an idea worth pursuing.
Limes inferior has not been translated to English (I was only able to find amateur translations of the first chapter [1]) and as such remains largely unknown outside Poland. Which is extremely unfortunate.
The pirate party in Germany had this as one of their ideas (Grundeinkommen), not sure if they still do.
I like this. My basic economic instincts scream "nonsense" but I like testing it even if the test results are likely useless because the city is still surrounded by "normal" ones. Reminds me a bit of the socialist calculation debate.
There's enough money wasted on stuff I consider more useless and at least this experiment has the potential to generate surprises.
I'm all for experimenting with economic systems, worst case it generates some new ideas.
The main thing to remember with this is that even if you do end up with a % of people who do just bum around on basic, a lot more still would rather earn enough to live a more interesting life. And wages will probably go up to incentivize people to do the crap jobs - or encourage someone to find a way to automate it.
My knee-jerk reaction was 'ah, jeez - there's going to be a big percentage of lazy people just gaming the system'. But on reflection, as some other posters have already said, these folks would probably not being looking for work regardless - and if this helps the majority be more productive and happy... to me, it's worth a punt to see what happens.
Good on you Utrecht - I love the bold thinking. It might not work - but at least they tried something new to address one of our oldest problems!
The problem I see with any basic income scheme is that lazy people can get in the trap to become trapped in a lazy for ever state. Basic income should be accompanied with a policy to motivate people to develop their capabilities and enhance their self confidence. Once you are trapped in the basic income scheme and automation replaces all the low skilled jobs, lazy people can see themselves as completely disposable objects, so you need a great self-confidence and a change of mentality to change from a lazy people to a do it person.
[+] [-] onion2k|10 years ago|reply
If a government were to do that for everyone it seems pretty obvious that society will be better off - people will spend their time working on things to improve everyone's life rather than worrying about how to afford their rent.
[+] [-] frogpelt|10 years ago|reply
It will eventually devolve into a problem like Greece has now. Too many people receiving money, not enough people paying in.
Besides that, asking any government to take money from the people, run it through the giant bureaucracy machine, and magically produce a net benefit to the people is both logically impossible and naturally never going to happen.
I'm sure it will be attempted in America at some point and the "public servants" are licking their chops.
[+] [-] JamesBarney|10 years ago|reply
It doesn't matter if redistribution is inefficient in terms of dollars if it's efficient in terms of utility.
The idea that a rich person gets less from money than a poor person does is called diminishing marginal utility. An example of this is $3,340 can buy a very rich person a purse, or it can buy a very poor person the life of their daughter.[0]
Now suppose that this government bureaucracy is terrifyingly inefficient and burns one dollar for every dollar that makes it to the malarial foundation. This would mean that a rich person has to give up 2 purses to save one life. In most people's books this is a huge gain in utility, and is why even if redistribution is inefficient[1] financially, it is very efficient when measured by utility.
[0] - Give well estimates that the malarial foundation saves 1 life per $3,433 [1] - The latest papers by the IMF actually argue that redistribution does not reduce growth.
[+] [-] Tloewald|10 years ago|reply
So apparently the federal highway system isn't a net benefit? How about the internet?
Also in more direct terms, the government "magically" made profits by bailing out AIG, GM, and so on -- so we got taxpayer money (or printed money, doesn't matter) being used to create (a) more money than was used, and (b) the net benefit of not having the economy implode together with the more arguable net benefit of (c) GM staying in business.
As an aside: a friend of mine used to work as a transport economist, trying to figure out the net benefit of government projects. (This was in Australia, but Australian politics is every bit as borked and corrupt as American.) Typically the cut-off point for a government road project was a societal benefit / cost ratio of 20/1.
The thing about corporations -- they raid the societal common (the benefits of public education, civil order, roads, etc.) and make profits "themselves".
[+] [-] HappyDreamer|10 years ago|reply
But that happens already in the country where I live. People pay taxes, and via taxes, we are able to provide health care and university education to everyone. I like this system, and I'm one of them who pay taxes. It's good for me if everyone is well educated, and healthy.
Whether or not a basic income would work, depends on the number of citizens. Fairly few, and many efficient machines and robots that can do most of the hard work, then it'll work okay. Too many people, then basic income won't work I think. In the future, thanks to contraceptives, I think there won't be too many people.
[+] [-] reb|10 years ago|reply
That may not be a bad thing if we're talking about people who contribute nil to society.
>If the government is giving everyone a check, how hard is it to argue that the check should be more? Not hard.
Not hard to argue, very hard to accomplish. Political change in many countries is slow and welfare recipients are rarely afforded much sympathy by the working and managing classes.
In any case, the real function of basic income is so much more than a moral institution (we've heard those reasons a million times and I won't touch on them here). The exciting thing is that it gets the useless and/or uncommitted to self-select out of the labor market. That means better productivity, higher quality services, a better work environment, lower labor supply and higher wages. They can continue contributing little-to-nothing, be provided a reasonable minimum by local standards, and leave the rest of us to accomplish what we want to in business, research, etc. That would be a HUGE weight off the backs of workers and companies, and I would gladly pay to keep people who can't be bothered out of work. Make no mistake, we're already carrying these people financially and professionally. Not having them gum up our operations would be well worth whatever instinctual annoyance their mooching causes.
That's the conclusion I've arrived at.
[+] [-] unknown|10 years ago|reply
[deleted]
[+] [-] ZenoArrow|10 years ago|reply
Your logic is sound, but you've misunderstood something crucial.
Where does money come from? In short, money is created in one of two ways; by government spending and by bank loans. All money that exists in the rest of the monetary system was originally formed in one of these two ways.
From the viewpoint of the worker, money exists only after something of value is created, after all that's how we get paid, we do the work then the money ends up in our bank account.
But in reality, money exists before we earn it. The money in my bank account and your bank account isn't 'ours' before it's someone else's.
The way that money is spent into an economy has a large role to play in the the quality of life of a society that is based on money as a medium of exchange. Some of the ways the money is created can be destructive to the economy (for example, when mortgage values increase faster than wage values), whereas other ways can boost the activity of an economy (for example, healthcare spending).
The role that the banking industry plays in the creation of money has the potential to undermine the social good that UBI could offer, but I don't want to detract from the main point, and the main point is this; understanding how money is created is very useful in understanding how to get the best out of the systems we build on top of money.
UBI organised by a government can just be a different way to spend new money into the system. Aside from the usual effects of inflation it doesn't have to involve your savings or earnings at all.
[+] [-] rconti|10 years ago|reply
It's an interesting concept. My immediate reaction is that it creates disincentives to work. In theory it does, but the only data we have is those who are currently on welfare and do not work -- but maybe those people were basically not going to work anyway! We have no competing group of people who are on welfare yet still CHOOSE to work to better their lives, because as soon as someone gets a job, no more benefits! So it's natural that an outsize chunk of people on public assistance don't work -- and the ones who stay on the longest, of course, don't WANT to work. But it undercounts those who go on the system then back out of it as they get work.
Other things that seem "obvious" to result: inflation. If everyone can afford $x for housing, why should housing costs not go up by a similar amount? The same way 2 incomes is now "normal", and the same way giving tax deductions on mortgage interest to make housing "more affordable" means, now that everyone can afford more housing, housing is bid up.
I don't know, but it's a fascinating experiment, anyone who is not paying for it should be in favor of this experiment -- unless you just hate poor people.
[+] [-] djb_hackernews|10 years ago|reply
Peg it to a CPI? GDP? Or maybe codify it in a constitutional amendment?
[+] [-] TrevorJ|10 years ago|reply
[+] [-] wwweston|10 years ago|reply
Seems to work in late stage free markets dominated by 2-3 large-scale players.
[+] [-] a_c_s|10 years ago|reply
[+] [-] killface|10 years ago|reply
[+] [-] jsprogrammer|10 years ago|reply
You need a government that extends to the people who are being governed.
[+] [-] ppereira|10 years ago|reply
For example, if you have one group with a basic income and one group without a basic income in the same population, the group without would be more likely to be hired for low wage jobs because that salary is much more important to them. If everyone had a basic income, then all potential hires would be on an equal footing and it would not look like the non-basic income group is more employable.
One way to test the basic income theory is to give everyone a very low basic income and then slowly increase that amount over time. If basic income works, it should be beneficial even at low rates that do not massively disrupt the tax and welfare system. When this is seen to have beneficial effects (or at least not adverse effects), the rates can be increased.
[+] [-] squids|10 years ago|reply
That's not necessarily how it would work. In the UK we've had a top up with tax credits for low paid jobs. What we've seen is an explosion of low paid part time jobs as businesses know people will take them as their income will be topped up by the govt.
[+] [-] ed_blackburn|10 years ago|reply
Personally I think it is lazy to dismiss the thinking behind Basic Income as merely communism.
[+] [-] JackdawX|10 years ago|reply
[+] [-] TeMPOraL|10 years ago|reply
[+] [-] JesperRavn|10 years ago|reply
When viewed in this holistic way, it's not clear which system is better. Some might say that it's not worth "wasting" incentive to work on people who might, for all number of reasons, not be willing or able to work anyway. This is the argument for the welfare state. On the other hand, basic income advocates might argue that poor people are just as willing to work as anyone, and that creating very high effective marginal tax rates for them results in welfare dependence.
[+] [-] dwightgunning|10 years ago|reply
Also, I haven't seen any coverage in the mainstream Dutch press... which is somewhat telling.
[1] http://destadutrecht.nl/politiek/utrecht-start-experiment-me...
[+] [-] jokoon|10 years ago|reply
It's odd because they don't really check that you send resumes, nor do they really try to contact companies or just propose you a shitty jobs. The "get a job" mentality is really weird to me, because if you have freedom, and you can't find a job that suits you or that you're just too humiliated to beg all those employers, why punish people for being moochers ?
Unemployment is such a political subject, it always ends up being about social stratification anyways. Employed people are just safe and sound, and there are many parameters and behaviors that keep many individuals away from employment or social integration.
Being a marginal and being unemployed, to me are the same problem.
The UBI solves this problem, since it's injecting money that increase consumption, which in turn also increase business and growth.
[+] [-] clavalle|10 years ago|reply
Or they will bargain for a job that is worth their time so they won't accept a job that won't improve their lives. That is a subtle but important difference from just sitting around because they can.
My bet is that when people aren't bargaining for their life -- food, shelter etc because those things are a given they will begin making trades that are a net positive for them rather than just trying to control their losses. 'Head above water' bargaining is a fact of life for the poor that is easy for the middle and upper classes to forget. It leads directly and almost inevitably to exploitation by the other party that is in a better bargaining position.
Further in the article it talks about young men continuing school and mothers staying home and taking care of children. These are decisions that are made by people who are not desperate and not in a terrible bargaining position.
I'm excited to see the results whether they agree with my intuition or not. We need more policy experimentation in the US and I'd love to see some of that experimentation in this direction.
[+] [-] macspoofing|10 years ago|reply
Basic income seems like it will give you that kind of piece of mind as well. You know that in the worst case, you'll have a hassle-free, indefinite, (modest) income to get you by. That's worth something.
[+] [-] lumberjack|10 years ago|reply
They are not testing a universal basic income scheme. They are testing an unrestricted basic income scheme, for welfare recipients only. If the experiment is a success it would mean that welfare schemes will become less paternalistic.
[+] [-] vog|10 years ago|reply
So if any of these selected people will try to find a job, they will probably voluntarily "lose" it to somebody to really needs that job. Even without that moral issue, this makes still sense from a business point of view: All else equal, hiring a poor worker is probably perferable to hiring a wealthy one, as the poor worker has more incentives to work really hard.
[+] [-] ryan-allen|10 years ago|reply
I honestly think I'd be doing very similar things. I'd still be programming, and I'd be wanting to make things that'd help people do their jobs better, but I wouldn't feel like I 'had to'.
That alone would improve my sanity immensely (I think), and yet it's only a small conceptual jump between what I'm already doing day-to-day.
[+] [-] piokoch|10 years ago|reply
I assume the money will not be printed (this would not help, as inflation would make that income very small).
So the country that applies such policy must have some way of finding money. Some countries have natural resources that they can sell, so the problem is solved. But how about the rest?
I guess this will be financed by those, who are earning more money.
Let's forget about the question if this is moral or not to take away money from people who are working hard just to give away these money to those, who are not working at all.
However the taxation will make costs of work higher and higher. Country economy would become less competitive.
In addition avoiding taxes would start to be really profitable - people would start opening fake companies abroad, create fake costs, etc. it happens now as well, but the scale could be much bigger.
As usually, big players would be able to avoid taxes, so the one who would be hurt most are the "middle class". Taxes will eat their profits and the gap between the best earning people and the rest would be growing and growing.
For me it looks a bit as if we were trying to solve the problems caused by goods redistribution by applying more goods redistribution.
[+] [-] dagw|10 years ago|reply
Most countries contemplating this already spend a lot of money a whole host of welfare and various support and safety net systems, as well as the massive bureaucracy needed to administer these systems. By replacing the massive patchwork of existing systems with one simplified and unified system, you can save a lot of money through reduced bureaucracy and increased efficiency.
Basically this system won't be added to what is currently there but replacing an already expensive and highly inefficient system. So while it may end up being slightly more expensive it won't simply be a completely new cost added to the budget. There may even be secondary savings from things like reduced crime rates and increased health.
[+] [-] richmarr|10 years ago|reply
Your interpretation of 'moral' here is a narrow one. Socialism is a moral economic solution; it's just not as efficient as well-regulated free markets. In a post-labour-scarcity society this will broadly be moot anyway as much fewer of us will have marketable skills.
Update: I say socialism isn't as efficient as well-regulated free markets. It actually depends on the market. The UK's NHS for example covers the entire population and costs less per capita than the US spends on Medicare (which only manages to cover the elderly). Funding healthcare through insurance creates moral hazard, conflicting incentives, information asymmetry, etc. which adds up to a deeply inefficient market.
[+] [-] mcv|10 years ago|reply
The same people who are paying for the other welfare, unemployment and disability payments, the lower tax brackets for lower incomes, etc. Those are all things that basic income could eventually replace.
It's not like there's free money coming out of nowhere, it's simply a smarter and more efficient way to distribute the money that's already there.
The big advantage of basic income, though, is that it rewards working more than what we currently have. It's currently possible for someone on welfare who gets a part-time minimum wage job, to end up worse off. With basic income, you always get ahead when you work more.
[+] [-] Swizec|10 years ago|reply
It's a type of insurance if you will. If I participate in the system, I can be reasonably sure that were I to lose my job, I wouldn't end up on the streets.
A spectacular example of why this is a good thing is J.K Rowling who was able to write Harry Potter because the British welfare system kept her in reasonably good shape after she lost her job -> http://imgur.com/gallery/FIQYq
I've never understood the exact differences between basic income and social security, but it fundamentally feels like such a safety net should exist.
[+] [-] mohawk|10 years ago|reply
Just look at all the social "safety nets" that many European countries have. That money then gets relabled "basic income". Pensions, unemployment benefits, paid sick leave, child support money, etc...
For people who are working full-time and don't get anything at the moment, the taxes would have to be increased slightly to offset their "basic income" on average, so maybe with a low wage you would have a small gain, with a big wage you would have slightly less than before.
The advantage could be a massive reduction in bureaucracy. The disadvantage in Europe at least is that many people prefer perceived "fairness" over efficiency, i.e. they are more worried that someone who "should not get that money" will get it than they are worried about their social systems wasting money and peoples' time.
[+] [-] lmm|10 years ago|reply
> Let's forget about the question if this is moral or not to take away money from people who are working hard just to give away these money to those, who are not working at all.
In civilized countries those who are not working at all are already given money that's taken from the rich. The big difference with a basic income is that those who are working hard at low-paying jobs also get money.
> the taxation will make costs of work higher and higher. Country economy would become less competitive.
A country with closer income equality will be more pleasant to live in, so maybe people will be willing to work for lower take-home wages and this will balance the higher income tax.
It would be good to have some kind of international tax settlement though. Otherwise we have a race to the bottom (we already see that with corporation tax and e.g. Ireland) that ends in no country being able to tax and the whole world (except for the very rich) being worse off.
> In addition avoiding taxes would start to be really profitable - people would start opening fake companies abroad, create fake costs, etc. it happens now as well, but the scale could be much bigger.
People already avoid tax as much as they can, I don't think this would change that. If you're the kind of person who avoids 40% tax you would still avoid 30% tax, IMO.
> As usually, big players would be able to avoid taxes, so the one who would be hurt most are the "middle class".
The whole idea of it being universal is that it's the working / lower middle class that benefits the most. Blindly assuming that the rich are just not going to pay their taxes is no way to run a government - if they're not paying, make them pay.
[+] [-] LBarret|10 years ago|reply
Beside, without some form of solidarity, a society tends to degrade into some "every man for himself" : the poors use violence (that's all they have), the richs task evasion because they feel no obligation to their fellow men. We have too many examples of that, local or national.
The mechanisms you describe might happen but they may be minor forces in the end. A real economic system is very complex, many many forces and behaviours are at work (and many are social/cultural). A complex reactive organism.
So no, this experience is not silly and it's hard to see what it will produce.
[+] [-] Expez|10 years ago|reply
Universal basic income amounts to (providing or) paying for food, clothing and shelter. What is the cost of food when we have labgrown meat, the robots till the farm and self-driving cars deliver it everywhere?
What's the cost of shelter with industrial scale 3d-printing and robotic assembly?
What is the cost of providing everyone with basic clothing when all the factory workers are replaced with robots?
Stop worrying about the price of everything and start thinking in terms of scarcity. Will the stuff required for basic human survival still be prohibitively scarce in 5 years, 10 years, 50 years?
[+] [-] dagw|10 years ago|reply
The cost of land plus the cost of raw materials plus the cost of extending the necessary infrastructure, so basically the same as today.
What is the cost of providing everyone with basic clothing when all the factory workers are replaced with robots?
The cost of raw materials plus the cost of machinery, so basically the same as today.
Basic labor is incredibly cheap today, (desirable) land and resources aren't.
[+] [-] SimpleXYZ|10 years ago|reply
[+] [-] ocb|10 years ago|reply
[+] [-] knodi123|10 years ago|reply
If the former, then it will be seen as almost immoral or evil to give a comfortable wage to someone who didn't earn it.
If the latter, then it will be seen as almost immoral for the one guy who owns the robotic factory to reap all of the profit and earn a fortune every year by having made workers redundant.
The third option is to eschew automation entirely and keep a steady supply of make-work jobs, just to justify enough salaries to keep everybody from starving. Which strikes me as more dystopian than the oligarchy in option #2.
[+] [-] JulianMorrison|10 years ago|reply
We don't so much eschew robotics, as under-bid them. McDonalds finds it cheaper to hire humans than automate - for now. (The touch screen, card-accepting menus I've seen appearing lately, make the case that this won't last much longer.)
[+] [-] jwr|10 years ago|reply
It is true (and sad, I think) that many people, given basic income, will do nothing to improve themselves or their surroundings. But I still think basic income is an idea worth pursuing.
[+] [-] nathell|10 years ago|reply
[1]: http://paczemoj.blogspot.com/2011/11/limes-inferior-chp-1.ht...
[+] [-] kriro|10 years ago|reply
There's enough money wasted on stuff I consider more useless and at least this experiment has the potential to generate surprises. I'm all for experimenting with economic systems, worst case it generates some new ideas.
[+] [-] gregjwild|10 years ago|reply
[+] [-] gdewilde|10 years ago|reply
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[+] [-] unknown|10 years ago|reply
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[+] [-] mikehawkins|10 years ago|reply
Good on you Utrecht - I love the bold thinking. It might not work - but at least they tried something new to address one of our oldest problems!
[+] [-] noreasonw|10 years ago|reply