Powerful Political Forces Are Aligning Behind Minimum Income

http://nerdinvest.blogspot.com/2016/02/powerful-political-forces-are-aligning.html

by 99_00 • 10 years ago

91 156 10 years ago

nerdinvest.blogspot.com

jbrun• 10 years ago

If you are in Quebec - join us at http://revenudebase.quebec In Canada: join us at : http://biencanada.ca

herge2• 10 years ago

What do you think about Jean-Robert Sansfaçon's critique in Le Devoir (http://www.ledevoir.com/economie/actualites-economiques/4624...), where he calculates that to give only 10,000$ per inhabitant in Quebec per year, you would need 68 billion dollars, ~22 times the amount currently spent on social welfare. Also, that would constitute 70% of the current tax revenue of the Quebec government.

graeme• 10 years ago

Does that take into account that for middle class people it's effectively a wash?

i.e. Your taxes go up $10,000, but you get a $10,000 payment. I haven't seen a cost calculation that explicitly factors this in. I imagine it's still expensive, but perhaps less than it seems?

It's a good article though. A lot of people vastly overestimate current social payment expenditures. They're much lower than I thought, and I am not in the camp that thinks basic income will be costless to implement by replacing social programs.

alphydan• 10 years ago

According to the Canadian government [0], if I'm reading it correctly, the money coming in was around $150bn/yr in 2013. So 60bn may be a high but reasonable figure.

edit: more recent stats [0] show 104bn coming in, 5bn spent is social tax breaks, 0.5bn spent in food pensions.

[0] http://www.stat.gouv.qc.ca/statistiques/economie/comptes-eco...

[1] http://www.revenuquebec.ca/fr/salle-de-presse/statistiques/r...

redwood• 10 years ago

Machines will generate enormous excess wealth in the future

ars• 10 years ago

I support it personally. And I think it should be funded with pollution and waste taxes (all air+water pollution, no myopia on CO2).

This way money taken from people for taxes is funneled right back to them instead of having government decide what to do with it.

The main complication I see is handling taxes for import+export, you'll probably have to refund taxes on exports, and harder, figure out pollution levels for imports.

hackuser3• 10 years ago

A rarely discussed benefit to minimum income: The higher the social benefits, then I think the greater the labor market liquidity, for both employers and workers.

Currently everything else depends on your job: Either you have one, and you have income, benefits, and all that goes with them in a society where everything costs money; or you don't and you have nothing (or very little). But if you don't lose you house, still can afford decent healthcare, and your kids still eat and go to college, etc., then employees can be more flexible:

Firings and layoffs are less of a crisis; when everything doesn't depend on having that job then I expect there will be fewer lawsuits. Protections for jobs in law and regulations can be reduced.

Also, workers, especially those with mortgages and kids, would be less desparate to keep their jobs. I think that is a healthy thing; they can take more chances and invest more in training and skill acquisition. Also, they are not compelled to do odious or unethical things (such as working off the clock, tolerating abusive environments, particpating in and/or not reporting illegal activities, etc.) due to a sort of employment extortion. It probably would be better for managers to get more honest feedback too (though some would have to learn ways to motivate people besides abusing them!).

Some of that is speculative but I believe a European country, I think Denmark, worked out a compromise of high and long-term unemployment benefits in return for making workers easy to terminate.

In part it's also a political solution to the concentration of wealth: If you are going to accumulate so much of the wealth due to the way the economy is structured, then in return pay for these social benefits and we all can retain labor market liquidity and maintain political harmony. U.S. workers have less to bargain with: They gave away many of their labor market protections and lost negotiating power by weakening their unions.

zanny2• 10 years ago

Giving workers bargaining power in wage and work condition negotiations is only a good thing, absolutely. It should be obviously unfair to the vast majority of people that you bring two people to the table when you apply for a job (in effect, at least) - a capitalist business owner seeking to profit and accumulate wealth through markets, and someone who doesn't want to starve or go homeless. Those kinds of negotiations are anything but fair.

UBI would see a dramatic shift in the valuation of jobs, in the ways employers can treat their employees, and in what work society values having done. I postulate often how I believe a lot of the tremendous flow of working into the advertising and service sectors has been due to the subconscious social desire to avoid the collapse of work, so we produce fictitious work with minimal or no net productive gains or utility to keep people busy. There are millions of white collar workers who wake up every day in fear of their job being replaced with software, and of truckers fearing the inevitable self-driving vehicle revolution on the horizon, because we are not starting on the path towards automation, we have been on it for decades, we have simply subliminally skewing our society to try to compensate for the implication that real productive labor has been moving out of the hands of human beings for a long time now.

manyoso14• 10 years ago

Some other major reasons people support UBI are:

* Eliminating poverty and reducing economic inequality

* Simplifying the social safety net

* Preparing for a future where jobs have been automated

* Stimulating entrepreneurship

* Giving people the freedom to pursue their passions

* Paying caregivers for their economic contributions to society

* Recognizing a livable income as a human right

* Paving the way for a new American Dream in the 21st century

Taken from this survey: https://www.surveymonkey.com/r/5NFBGBV

sre_ops• 10 years ago

It will be swallowed by an immediate increase of the price of goods and services UBI would be spent on.

jpadkins2• 10 years ago

Recognizing a livable income as a human right

I was with you until that one. The fundamental right to other people's wealth is a very slippery slope. I believe human rights should only be negative rights.

Paving the way for a new American Dream in the 21st century

reads like political marketing fluff. dilutes the message.

pborowicz• 10 years ago

Something I haven't seen talked about, but seem obvious to me. This would revitalize so many rural communities that lost or never had a major industry supplying jobs. This would stem the flow of youth out of places like Kansas or Upper Michigan. Can you imagine how much this would mean to communities like this?

debacle7• 10 years ago

Exactly this! If you create UBI and have universal healthcare, entrepreneurship, makership, lifestyle businesses, etc, are going to explode.

Domenic_S4• 10 years ago

"and have universal healthcare" is the functional clause here, but it's thrown in as an afterthought. All the BI in the world isn't going to help you if you incur a $200k broken arm 'cause you didn't have health insurance.

Domenic_S4• 10 years ago

This handwaviness is typical of pro-BI rhetoric. If there's a tech implosion and 500k workers lose their jobs, is $900/month in BI really going to offset their $3,000/month mortgages meaningfully?

devonkim• 10 years ago

It's the difference between living on the street homeless like a lot of families experienced in the Rust Belt and getting some breathing room to make a move elsewhere where there may be jobs available. My big concern with BI is that costs of many staples could simply rise as consumer spending goes up due to such depressed wages for most people and we'll be back in the same situation where a shocking number of people still can't afford healthy food or a roof over their head.

dllthomas2• 10 years ago

is $900/month in BI really going to offset their $3,000/month mortgages meaningfully?

... yes? They aren't breaking even, and they'll have to find something to do for more income (or move) pretty soon, but it certainly extends their runway.

imgabe• 10 years ago

Is it better than the $0 a month that they would get if that happened now?

DiffEq• 10 years ago

Yet nowhere has this been "field tested" for any length of time. Unless one makes the case that it has been tested in the form of several countries in the 20th century. Places like the the Soviet Union, China, etc. We see that it failed in those places and in Soviet countries it failed fantastically. The fatal flaw in all of this...who is going to pay for it?

sbuttgereit• 10 years ago

That and what economic activity will be suppressed as capital moves away from prior uses. Nobody is talking about generating new wealth to make this happen: it's pure consumption and some of that will be at the expense of capital investment. The seen and the unseen indeed. Unless there's more than hand-wavy dismissive talk about the negatives such schemes bring, one is foolish to think that this does anything positive at all.... and that's just the utilitarian perspective.

Morally, that any one person, by virtue of their relative wealth alone, is judged a provider, at gunpoint if necessary, to others who, by virtue of their relative lack of wealth alone, is considered worthy of substance, is such an inversion of right and wrong as to warrant some serious soul-searching about what makes one worthy of punishment or reward. Yes, poverty is a problem. Yes, there are institutional barriers to getting out of poverty. I don't see how doubling down on those problems does anything than ease the conscious of the haves.

kbenson2• 10 years ago

While I would agree Minimum Income is more along the spectrum towards Socialism that Capitalism from our current point, I don't think we can fairly equate it with Communism. There are a few places trying it out though[1][2][3].

The fatal flaw in all of this...who is going to pay for it?

Well, the simple, possibly simplistic answer is "the same people that pay for wellfare". Which is everyone not receiving it. To be sure, it would need quite a lot of work on the details to even be possible in an economically viable way.

Edit: Added more references.

1: http://www.businessinsider.com/this-dutch-city-is-giving-bas...

2: https://news.ycombinator.com/item?id=11273482 (Alaska)

3: https://news.ycombinator.com/item?id=11273482 (Ontario)

warfangle2• 10 years ago

Soviet Union and China didn't really have a universal basic income. They had a state defined income, if anything. Which meant you couldn't make more than that, either.

It actually has been "field tested" - and in the US of A, no less.

The entire state of Alaska has a guaranteed minimum income.

Granted, it isn't much - on average it's been about $1,000 per anum.

tankenmate2• 10 years ago

Actually it was tested in Canada; https://en.wikipedia.org/wiki/Mincome

Mithaldu2• 10 years ago

Please review my comment here to consider whether it counts as "field testing": https://news.ycombinator.com/item?id=11339951

roymurdock2• 10 years ago

1. UBI can be thought of as large-scale debt forgiveness. You are simply giving people the means to escape (often, but not always) self-imposed debts.

2. UBI would lead to a huge jump in inflation (as a %, nearly as much as the initial UBI stimulus % of total money in circulation) as the vast majority of UBI recipients would have a large propensity to immediately spend that money, thereby simply releasing it into circulation and ramping up inflation. If UBI were made into a sustained payment, the market would simply adjust prices up on consumption goods accordingly.

UBI doubled the amount of money in circulation? Bread, milk, eggs, and rent cost 2x as much. Of course the effect would not be immediate (rent is sticky) but UBI would not leave much (if anything) left over for the poor today. In the mid-long run the poor are no better off, other than having a few immediate debts paid off through the first few rounds of UBI.

3. UBI leads to the misdirection of resources. People who are not financially secure enough to bring children into this world will suddenly find themselves with the resources to have children. Some, not all, will. We observe fewer and fewer jobs available to the general population, but we have hit a glut in productivity. We do not want to redirect resources to bring more labor into the economy before we hit another period of high productivity brought on by whatever technology drives forward the next paradigm shift in information/goods transportation and synthesis.

manyoso14• 10 years ago

This is simply wrong and has been shown to be wrong empirically. Details here: https://medium.com/basic-income/wouldnt-unconditional-basic-...

mikeash4• 10 years ago

I don't understand #2. UBI wouldn't increase the amount of money in circulation, unless you paid for it by printing money or borrowing. But everything I've seen advocates for paying for UBI with taxes.

For #3, the overall trend is that people have fewer children, not more, when they have more money. Maybe UBI money would be different somehow, but since you're positing the opposite effect from what we've seen so far, I think it needs way more support.

AnimalMuppet6• 10 years ago

My impression is that many people, given more money, would use most of it to pay down debt, rather than to spend on new stuff. (That may reduce the probability of bad debt, which may increase the safety of the financial system. On the other hand, it may not increase consumption to the degree expected, and therefore may not work as well as expected to "get the economy moving again".)

dllthomas2• 10 years ago

UBI doubled the amount of money in circulation? Bread, milk, eggs, and rent cost 2x as much.

This assumes that production of these things won't rise - almost certainly false.

For milk in particular, we've recently had price supports.

And for rent, a basic income inherently increases the supply of "real estate near enough to sufficient income".

andrewfong• 10 years ago

1. UBI can be thought of as large-scale debt forgiveness.

Not everyone receiving UBI would be in debt.

2. UBI would lead to a huge jump in inflation

Your argument assumes a fixed supply of resources. In a perfect market, rising inflation means higher prices means higher profits for suppliers which then results in increased production and, eventually, lower prices again. The market isn't perfect of course -- supplies for some resources (e.g. real estate) expand very slowly, so we might see increased rent eat up a lot of UBI in the short term.

But the increased liquidity mentioned by the parent post counters that problem. For instance, in theory, rising rent prices should encourage renters to move elsewhere. But in reality, the cost of moving itself (plus the difficulty of finding a job in a distant location) is high enough to discourage people from making that move. UBI alleviates both concerns by helping pay for moving costs and by providing some cushion for job-seekers.

And most markets actually do a decent job of increasing supply in response to spending. At most, this argument calls for phasing in UBI a pace slow enough for markets to adapt rather than not doing it.

3. People who are not financially secure enough to bring children into this world will suddenly find themselves with the resources to have children.

Empirically, this doesn't seem to happen as much you might think. Poverty reduction usually results in a drop in birth rates. Bill Gates raises this point quite a bit when discussing public health. http://www.gatesfoundation.org/Who-We-Are/Resources-and-Medi...

Mithaldu2• 10 years ago

I'm from Germany. We have all the upsides you mention, with a system that's less drastic than Basic Income.

There are more details involved, but roughly speaking: If you fulfill certain minimum requirements of being in training, beyond retirement age, medically inhibited from working or prove to the state that you send at least two job applications per month, the state guarantees you a certain quality of life.

You're guaranteed decent housing (rent, phone, internet, water, electricity, heat other utilities), health insurance (and various other small insurances), and in addition to that receive (currently) 391€ per month per person, and if you have extraordinary expenses (usually medical or social stuff) they're covered for you. (And yes, my own sister lives on this. She's well cared for. It's honestly an amazing boon on the rest of the family.)

And despite all this workers here aren't even easy to terminate. For early termination the workplace has to prove active illegal acts, or prove that they informed you of low performance and you did nothing to improve, with limits on both lay-offs or quitting usually being between 3-6 months (depending on the contract).

jedmeyers• 10 years ago

Powerful political forces interested in staying in power by bribing electorate with other people's money?

manyoso14• 10 years ago

This seems like an idea that is gaining a lot of momentum. When I see prominent Republican voices speaking about it as "reform" of the welfare state, then I'll know that the time is ripe in America too.

zanny2• 10 years ago

While I am a staunch advocate of UBI as a solution to a massive swath of present and emerging problems around the world, I also do not see the experiments around it leading to its mass adoption in at least the span of decades.

Things have to get much worse (and they will) and we will need some active social unrest (on the scale of Occupy Wall Street or Black Lives Matter, except informed about UBI and fighting for it in a unified message) before the wealthy will acknowledge that if they want to stay wealthy, they need a society to be wealthy within, and we won't have one if people are destitute and starving by the millions because traditional capitalist expectations of work and compensation break down in the face of growing automation.

Florin_Andrei2• 10 years ago

So that's the question, isn't it. Will it go down smoothly, or will we go through another round of revolutions and unrest everywhere, complete with burning down the mansions and whatnot.

maxxxxx2• 10 years ago

My prediction for Basic Income is that even if it gets introduced a few years/decades later a lot of people will complain (rightfully or not) about all those parasites not doing anything while "job creators" have to pay for it. At least in the US it won't work long term looking at the current discussions about tax rates.

manyoso14• 10 years ago

If it is also sold and paired with an elimination of the general income tax I think it could have wide support on the right and left. And how would we pay for it without a national income tax? A value added tax and a carbon tax.

debacle7• 10 years ago

We need to return to a wealth-oriented tax. Neither income tax nor VAT are taxes on wealth.

But even as someone without a lot to worry about, I can't think of a fair way to tax wealth outside of land taxes, which would greatly disrupt the economy.

drabiega4• 10 years ago

VAT is a great alternative to a US style sales tax, but it is still regressive and UBI + regressive taxation seems like a pretty terrible combination.

maxxxxx2• 10 years ago

It won't get support from the right. It's pretty clear that the right wing doesn't like people getting something for nothing.

Florin_Andrei2• 10 years ago

The USA is uniquely unfit from a cultural standpoint to accept the idea of universal basic income. It's funny, the cultures that would easily accept such an idea are America's old enemies, the former Eastern Bloc countries.

It's interesting how UBI is the way of the future, while America's own way of thinking is opposed to it.

hnal943• 10 years ago

The Eastern Bloc has been following the "way of the future" for a century.

Kenji3• 10 years ago

Haha, I love how the tech community is so liberal and critical against government when it comes to privacy and meddling with our private lives, yet that exact same community is mostly in agreement with UBI which in turn means being completely dependent on the state. If the state thinks you do something it does not like (you're a ''terrorist''), your UBI will be striked - you know that, right?

strasser• 10 years ago

Great comments Kenji - pointing out the futility of the liberal mindset.

manyoso14• 10 years ago

Liberals understand that we are the state as a government of the people, by the people and for the people. Probably we remember this from grade school and also we don't instinctively fear the 'other' like you guys.

Kenji3• 10 years ago

I am not the state. And when I look around, a lot of states certainly aren't 'for' or 'by' the people. Maybe you have to start thinking independently, rather than smugly reciting one-liners from school. The state is a large entreprise that gives us some things and forces us to do things and pay money under the threat of violence and incarceration. I argue for voluntaryism, the notion that people enter into contracts and relationships by their own free will and without force, which is fundamentally at odds with most of what the state does.

mikeash4• 10 years ago

As opposed to now, where your livelihood will be destroyed by just putting you in jail?

With UBI, if you hold a job you'll still be able to survive even if your benefits are revoked. You're not forcibly dependent on the state (at least not beyond the ways we are now, for roads and utilities and such), it's just an option. I imagine most people here would continue to hold their nice high-paying jobs even if UBI were implemented.

mindslight3• 10 years ago

I suspect you might have better luck by not being so confrontational and generalizing, and instead using that energy to better critique the actual topic.

ConfuciusSay02• 10 years ago

It doesn't mean you're completely dependent on the state, people can still get jobs and have a career, go off grid, same as now.

It's almost as if there are different people with different opinions in the tech community.

And what's wrong with applauding the government when they make a policy decision that helps your average person, while critisizing them when they make a decision that hurts your average person?

The hilarious part is, the rabid anti-government "libertarians" are always the first ones to also be rabidly pro military (the largest socialist entity in the government).

CuriousSkeptic2• 10 years ago

To me UBI is tied to the commons, not e state. So would be perectly fine with an implementation that makes it clear the the state has no say in it.

But then again I don't advocate the B in UBI, I'm content with any amount that is fair and efficient. If the state want to add a complementary redistribution scheme on top of that, it's fine, but there should be a component they can't touch.

For example, one component might be in hands of the central banks as a way to control inflation and such.

Another component might be an institution representing the commons. An organization charged with deciding what should remain a commons, and what could be rented out as private property. F.ex. pollution rights could be their mandate to allocate.

Edit: Also, checkout https://en.m.wikipedia.org/wiki/Geolibertarianism it doesn't have to be either or

afarrell• 10 years ago

I wonder if there is a way to structure it as a dividend from the profits gained by unemploying people via automation. That way, fixed-income voters have a double incentive to advocate for policies of more automation:

- It goes into their pockets

- It reduces their cost of living

If they vote in large numbers, as retirees do, that creates a large constituency to remove red tape.

The problem is making sure there is still enough profit motive to invest.

emartinelli3• 10 years ago

In Brazil, we have a law[1], from 2004, implementing UBI, but it is not nearly applied for all population. This law determine a gradual implementation and I believe that the the full one is far away. There are some benefits for poor people, unfortunately there are frauds and IMHO some mass manipulation from government.

[1] http://www.planalto.gov.br/ccivil_03/_ato2004-2006/2004/lei/... (Portuguese)

nmrm22• 10 years ago

Are you referring to bolsa familia? Or is this something else? (I don't speak Portuguese)

emartinelli3• 10 years ago

Yes, I am, Bolsa Familia is a national program. We have a city (Santo Antonio do Pinhal) that seems to have implemented UBI, too (I don't know much about that one). This article[1] (2013), in English, explains the current scenario and the law that I referenced.

The original proposal seems interesting to me, but I don't see government efforts to implement it as defined in law.

[1] http://www.basicincome.org/news/2013/06/opinion-a-three-step...

marcosdumay• 10 years ago

No, this is about universal income (bolsa família is means tested).

I've never heard about it, I don't think it has gone anywhere.

falsestprophet• 10 years ago

A lot of the minimum income people are also for open borders and I rather doubt you can have both.

anu7df• 10 years ago

I am inclined to think all this is posturing. UBI has the potential to reduce the friction involved in changing jobs. This alone makes it unpalatable to the corporations. When corporations don't want this, they will lobby and scare people till UBI becomes contentious. I can already see the ads... Booming voice narrator " UBI is tax on the small business. Say no to UBI"

nugget• 10 years ago

Serious question for folks here - do you believe we can successfully institute a meaningful basic income in the US with the current immigration policies? How would policies have to change given the increased incentives from UBI?

AnimalMuppet6• 10 years ago

Serious answer: I don't think we can institute basic income with the current immigration policies without rioting in the streets.

thisislame• 10 years ago

The powerful political force behind minimum income is the rentier class who will ultimately capture it as rent.

Replacing existing programs with "free choice" is a well-worn playbook. See also: pensions vs. 401k plans.

civilian• 10 years ago

Eer, I don't get it, why wouldn't I want a 401k over a pension?

You can't trust pensions. Companies can go bankrupt, and even governments have been going bankrupt and have renegotiated pension plans. I'd much rather slowly tuck away a portion of my own income and have it be labeled as mine, rather than have it be a future debt on some organization's account book.

twoodfin2• 10 years ago

Sorry, which "powerful political forces"? A Canadian newspaper?

In keeping with HN guidelines, I don't like to comment on why I flag articles, but I'm going to continue to flag the nearly content-less Basic Income posts that seemingly rocket up the front page a few times a week.

I'm sure there are comprehensive, insightful articles on BI out there. If they're ever posted, I'll probably vote them up.

quirkot• 10 years ago

"the [...] Basic Income posts that seemingly rocket up the front page a few times a week"

Sounds like HN is also one of those powerful political forces

AnimalMuppet6• 10 years ago

The article stated that the party that won Canada's most recent election has proposed BI. That's "powerful political forces", at least within Canada.

ef4• 10 years ago

Prediction: if universal basic income starts to become an imminent possibility, the existing public and private sector welfare bureaucracy will lobby against it. Because it will put them all out of a job.

Not coincidentally, this is also how you can sell the idea to people with libertarian leanings: universal basic income means much less discretion for unelected administrators, and more discretion for each individual on how dollars get spent.

debacle7• 10 years ago

You're already right. See: universal healthcare. No one has been lobbying harder against universal healthcare than insurance companies.

xrange2• 10 years ago

Here's something I like to see some discussion on from Basic Income proponents. Does BI need to be rolled out everywhere-all-at-once, or is it possible to do small scale experiments to look at the effects? If you think it is possible to have meaningful smaller scale tests, how small can it be? 1000 participants? 100,000 participants? 10,000,000 participants? And then the big question, would there be any outcomes from these smaller scale tests that would convince you that BI isn't feasible? Can share your list of those undesirable outcomes that would change your mind about the desirability of BI? (No sense in running tests if no one will change their mind). Also, what do people think of the Social Security retirement situation as being a fairly large example of BI, that has been running for the last 80 years on a subset of Americans. Does the fact that they are older invalidate it as an example case in your mind?

karmacondon2• 10 years ago

There have been multiple tests of the ideas behind BI:

* https://en.wikipedia.org/wiki/Mincome

* https://decorrespondent.nl/541/Why-we-should-give-free-money...

* http://freakonomics.com/podcast/fighting-poverty-with-actual...

The problem is that it often isn't possible to falsify or confirm ideas based on limited tests. You can set up a minimum income for one town, or give money with no strings attached to several groups of people, but it won't answer a lot of the long term societal questions. It's like asking if you can test social security or universal healthcare. Those tests might not illuminate problems that could occur on a large scale, 50 years down the line.

Sometimes the only way to test something is to do it.

mikeash4• 10 years ago

I don't think you can do small scale experiments, unless you do it using an entire small country. The idea is that you raise taxes too, and naturally you'll have winners and losers. I don't think the losers (wealthier people) will tolerate being forced into the program while others are left out of it. If you let people choose, then only the winners (poorer people) will choose to participate, which will deeply distort the results.

If you can do such an experiment (by, for example, instituting BI in a small country) then there are certainly outcomes that would indicate BI isn't feasible. The big questions are whether people in a BI scheme will continue to work, and whether the higher taxes needed to pay for it will kill the economy. If everybody quits their jobs and the taxes strangle the economy then that indicates BI isn't feasible. If everybody keeps working and the economy proceeds as usual then that indicates it is.

I don't think Social Security is a useful example precisely because it's aimed at retirees. You don't get much useful information about people's willingness to continue working when you target it at people who have retired. The tax rates needed to support it also look artificially low because the SS tax base is much younger than the SS recipients, and population growth means the former group is disproportionately large. Finally, it doesn't really look much like a BI scheme, because what you get out of SS is based on what you paid in, it's not at all universal.

xrange2• 10 years ago

I don't think you can do small scale experiments

What if you started everyone out at $50/month, and increased it slowly over the course of say 10 years or 20 years, or 100 years to whatever target you liked? Or do you think a gradual introduction would invalidate the results, or that you couldn't extrapolate from people's behavior at $300/mo, what they might do when the payout is $1000/mo?

Or what if you started walking the social security age backwards gradually, making people eligible at the age of 60 in the year 2020, and 55 in 2025, and 50 in 2030, etc.?

Can anyone shed insight on Indian reservations and basic income. For some reason I thought that some reservations with casinos had payments to all the tribe members?

You don't get much useful information about people's willingness to continue working when you target it at people who have retired.

What about the other claims that some people make with BI, like an explosion of new exciting art/music/novels, etc.. Is that testable with SS recipients (say looking at how many novels they write the year before, and the year after they retire, counting the number of hours they watch TV before and after retirement). Or are they an invalid group because they are old? Or are the "other" category of BI claims mostly just feel good claims that no one really believes?

warfangle2• 10 years ago

Alaskans have been receiving a guaranteed income of ~$1,000 per anum for the past 34 years.

CuriousSkeptic2• 10 years ago

Not a direct answer to your question. But possibly related.

First of all, I think we need a pretty large experiment to reach a conclusion, this because I don't think we are ready to measure the outcome until the experiment has had time to alter our perception of what is desirable. I'm afraid current measuement would be to tied to the current way of thinking, where productivity and gdp is overly emphasized.

I'm a proponent of basic income and do believe there are many economic and social benefits in practice, but it's primarily an ethical conclusion. So even if the theoretic benefits turns out to be false, I'd probably still need something else to change my ethical reasoning.

Like Thomas Paine, my primary argument for an UBI is that it is the way to make property rights fair. See https://en.m.wikipedia.org/wiki/Geolibertarianism , but in general my line of thinking is that the right to exclusive control over a resource is not derived from labor alone, as is the popular interpretation of Locke today, but from the agreement with all competing interests. From that I derive that property title must be bundled with full compensation for the opperunity cost incurred on those who now lack access to the resources. To me the most efficient way to implement such a compensation is to demand a rent, equal to what the next highest bid for the resource would be. This rent is distribute equally to all citizen, and thus acts as the compensation for respecting the property owners exclusive rights.

I also happen to believe that it would be an effective way to balance the hoarding effect of capitalism. In the simple tax and divide scheme usually thought of it would at least create a flow in the other direction, increasing circulation.

But hopefully it would also remove some of the rent seeking possibilities from the market and make sure that resources are employed for more productive uses.

However, if you implement UBI my way you probably won't reach levels that would make most UBI proponents happy, which means an additional grant must be distributed according to those people. Perhaps the failure to recognize the true ethical reasoning and instead insisting on treating it as welfare would make me lose hope in ever reaching a workable implementation.

If you insist on treating it as welfare you're probably going to end up taxing he middle class to support the lower class. That would probably turn out pretty horrific for everyone.

locopati• 10 years ago

Honest question - how does UBI address hikes in the cost of basic necessities (food, shelter, clothes) by companies knowing that everyone can afford them?

drabiega4• 10 years ago

With markets. As the distribution of income changes so does the distribution of goods and services produced.

manyoso14• 10 years ago

The UBI can be scaled by the cost of living index which will shelter it from inflation. We have a sovereign money supply for a reason. Let's use it!

X86BSD• 10 years ago

I keep seeing people say use the cost of living index. Do any of you realize what a fraud that is? They have taken out the two most expensive categories people spend money on to survive. Food and energy. And it's been like that for decades. That index is as useless as tits on a tree.

VLM3• 10 years ago

The market won't change too much. Everyone can afford food and shelter and clothes now, in the former 1st world countries. There are places in the world where people can't get food and thus die in the streets, but this is a rounding error here. Therefore not much will change at the bottom end. Prices might drop slightly due to reduced demand because people will occasionally splurge.

Note that this won't actually help with many social problems. For example kids who go to school hungry because mom spent todays money on crack will after UBI merely go to school hungry because mom spent todays money plus UBI on crack. Neither the slumlord nor the supermarket will see a penny more. Cultural changes are much harder to make than mere economic changes.

tangent128• 10 years ago

If competition works, companies won't be able to hike the price of necessities.

If competition doesn't work, the entire premise of capitalism is unsound.

jerelunruh• 10 years ago

Let's say that currently rent is $1,000 per month, food is $500, and Alice is earning $2,500.

Now UBI is implemented and Alice and all fellow citizens receive $1,000 per month. What will keep the market from easing the entry level rent up to $1,500 and food to $1,000 since the money is available? At first glance it seems like we'd just be choosing a different number representing "broke".

drabiega4• 10 years ago

Because markets still exist. The change in the distribution of income will necessarily incur a change in the distribution of production of goods and services. You would probably expect the price of some necessities to increase a little, especially in the short term, but it's not like we're anywhere near our capacity to produce food and housing.

manyoso14• 10 years ago

We tie the UBI to the cost of living index.

notahacker4• 10 years ago

That makes any potential generalised inflation worse, not better...

danharaj• 10 years ago

That would be the Marxian claim: wages trend for most workers towards subsistence. Caveat: subsistence is a relative term.

I think it's a reasonable question because UBI doesn't change much about the structure of capitalism. And also just like every other welfare program, it will be rolled back inch by inch every time there's a systemic shock and the poors are held to blame.

twoodfin2• 10 years ago

BI shouldn't be more inflationary in the aggregate than any other government scheme that redistributes income in a comparable way. The only difference would be which goods have more money chasing them. That choice would be made by the market (of net BI recipients after any tax clawback) instead of by politicians & bureaucrats, which has a certain appeal.

Currently, if you want access to much redistributed income, you can only use it to eat what USDA allows you to, or live where HUD tells you to. I find that a rather degrading way to treat our fellow citizens.

mindslight3• 10 years ago

The only difference would be which goods have more money chasing them. That choice would be made by the market

... for what people must spend on, and where it's hard to create new competition. So, rent - exactly where most middle-class surplus is going today (and I think a large part of what makes people yearn for BI).

karmacondon2• 10 years ago

The obvious answer here is that basic income won't be evenly distributed to all citizens. A household earning the average national income will get $1,000/month from the government, and see their taxes go up by about $1,000/month. So it's difficult to raise rent on everyone when only a fraction of your customers have true extra income.

Imagine you're a landlord who runs a property for those of normal income. How much do you raise rent because people who currently earn below the poverty line suddenly have $1,000 extra per month? You can raise rent on everyone, but then most of your middle class tenants will move out to seek better prices. The same is true for the price of groceries and other staples.

A smart business will maintain their prices and benefit from a larger customer base. Since everyone doesn't experience an increase in income, raising rents of all forms will only open those businesses up to price competition.

CWuestefeld2• 10 years ago

You ignore marginal utility. As you amass more of something, the value you place on each individual unit of it decreases. So $1 is worth more to me than to Bill Gates.

In any mutually-agreed upon transaction, both parties to the transaction will gain some amount of value ("utility" in economics jargon) relative to the amount they're giving up. Because $X is now worth (slightly) less (say, by $Y) to each BI recipient, the seller (or landlord in this case) can demand $X+$Y in exchange for his product. That is, he's demanding that the buyer continue to sacrifice the same amount of value, because the value of his own asset hasn't decreased. So you'll see prices increase.

There are other forces in play, too. One of them is price elasticity of demand. This tells us that things that people are less willing to go without (housing, fuel...) put more bargaining power in the hands of the seller than those that we're more willing to flex on (say, going out to movies). In this context, goods like housing and fuel will have a larger degree of price rise than will those where the consumer has greater bargaining power.

alistairSH• 10 years ago

The argument is that BI is non-inflationary because the total money supply is not being increased. BI simply re-allocates money from one person to another.

While that addresses inflation on an economy-wide scale, there are also arguments that apply to specific items. Take milk for example. Currently, if you are poor, you buy milk using SNAP vouchers or some other form of welfare. Under a BI system, the demand for milk doesn't change - we simply replace SNAP vouchers with cash from the BI.

drcode• 10 years ago

Easy, once that starts happening, we'll just raise Alice's earnings to $3,500.

(kidding)

qudat2• 10 years ago

you've essentially described minimum wage

Spooky23• 10 years ago

That already happens now. Tenement apartments in the hood rent at rates similar to suburban developments -- using vouchers.

The only actual "benefit" I can see from UBI is laying off a half million welfare workers.

VLM3• 10 years ago

"since the money is available?"

Sure about that? Some fraction of the population will buy a new iphone, some will experience the rare luxury of health insurance, some will repair the car they use to get to work or buy a better car to get to work, some will spend money on higher education, some can finally afford dental work, some will pay up whatever had garnished their wages (child support,taxes?), catch up on bills. Most of that money is not going to be available for basic food or rent.

The experience will vary greatly depending on the socioeconomic class and the size of the UBI. It'll also vary based on institutionalization status. College students will likely be expected to pay 100% of it toward tuition. Prisoners will likely either not get it or the state will keep it for restitution and court fees. On the other extreme the average slumlord likely will not see an additional penny.

noonespecial• 10 years ago

Draw it out into the absurd to watch it work:

Consider a society with 2 members, Mr Rich (net worth $10M) and Mr. Poor (net worth $100). Mr. Rich is 100,000 X richer than Mr. Poor right now.

Institute a ridiculous UBI of $1M/year for everyone. At the end of the year, Mr. Poor has $1,000,100 and Mr Rich has $11M but Mr Rich is now only ~ 11 X richer than Mr Poor.

Now sure cheeseburgers at Micky-D's are now $700 but the fact has changed that before, Mr Rich could buy a hundred thousand burgers for every one Mr Poor could buy. Now he can only buy 11.

UBI works like gravity. Continually pulling the unequal towards a center. The rich will still stay rich, but unlike today where rich automatically makes richer, the force will be reversed. It will take "energy" to stay rich.

bryanlarsen2• 10 years ago

Mr Rich will have $9M because his taxes would have gone up by $2M/year to pay for the program.

And the cheeseburgers are still the same price. Mr. Poor was buying cheeseburgers before he got BI and he's still buying cheeseburgers; neither supply nor demand has changed. Mr. Rich bought caviar before and after.

If McDonald's gets greedy and raises its prices because it thinks it can, Burger King is still making money selling at $5.

CWuestefeld2• 10 years ago

unlike today where rich automatically makes richer

This aspect of Piketty has been pretty well refuted. To begin with, he failed to properly account for depreciation. That server software system that you built and is making you money today, isn't going to be worth squat in 10 years.

qudat2• 10 years ago

except mr. rich is now making more for producing micky-d burgers

logfromblammo• 10 years ago

You would have to restructure taxation, such that incomes from rent-seeking behaviors and business activities are taxed at a higher (possibly punitive) rate than incomes from voluntary, equivalent-value trades between economic equals.

Otherwise, as has been seen countless times before, the value of the government benefit will be mostly captured by those best positioned to monetize it.

The alternative is to provide the housing and food benefit directly, rather than distributing dollars and employing a middleman. If UBI provided 3000 kcal of food per person per day directly, as pantry staples, rather than with a $500 check, it is much more difficult to skim rents out of that. Even restricted use food stamps fuel scams that convert them into cash. There may be people who rent out their government-provided housing as storage units, storefronts, or offices as they live in a non-gratis premium residence, but assigned tenement space is not quite as liquid as cash in the wallet, and therefore less able to be sucked out of the local economy.

Twice as much of the same apartment you already have is simply less valuable to you than twice what one apartment is worth to you, so anyone trying to rent it out cannot demand the same price as it might otherwise cost for the first apartment you live in. Imagine where you live now. Now make an exact copy of it. Would you pay twice as much as you currently pay to live in both places at once? Would you cook twice as much or twice as often if you had two identical kitchens? Would you sleep twice as long or twice as restfully if you had two identical bedrooms? If housing is a benefit guaranteed by UBI, rental prices for the non-gratis residences crash, because the only people willing to pay are now only those looking for a better place to live, rather than those looking for any place to live.

Whereas if the benefit is up to $500 in cash to the person who rents you an apartment, that's just fueling an economic bidding war where everyone in the auction has another $500 to spend.

AnimalMuppet6• 10 years ago

Let's assume a free market, run by supply and demand. Will BI change the supply of food? No. Will it change the demand? Well, there are some people who can't get enough food, but they are the exception. Demand might rise, but it won't double.

What will change is an increasing demand for quality. If I've got more money, I might want healthier food, or tastier food, or food that I perceive as being more "upper class" than I have been eating so far. I might move to wine from beer, or to steak from hamburger, or to organic from factory food.

lintiness• 10 years ago

"But more QE may not be politically palatable, as it disproportionately benefits the wealthy, hurts pension plans, and may lead to banks simply hording cash."

ok, so the author clearly hasn't got a clue how qe works.

ck2• 10 years ago

Jeez I wish people would quit this.

Minimum income means guaranteed maximum prices for things like rent and food that you cannot live without.

You think your $500 a month apartment isn't going to become $800 when the landlord knows everyone is getting at least $1000?

bryanlarsen2• 10 years ago

https://medium.com/basic-income/wouldnt-unconditional-basic-...

AnimalMuppet6• 10 years ago

No, because they would still have Milton Freidman's famous helicopter money drop. Previously, this took the form of quantitative easing.

QE was not the same as the "helicopter drop". The helicopter drop (HD) is much closer to basic income (BI), except that HD might be a one-time thing, whereas BI is ongoing.

QE is creating money to buy bonds. This raises the price of bonds, and injects money into the system. But where does it inject the money? To everyone? No, only to those who currently hold bonds - that is, to the wealthy, and to financial institutions. HD and BI, by contrast, give the money to everyone.

QE didn't do much to solve the problem of inadequate demand. HD and/or BI may do better. They may do it at the price of increased inflation, true. But under the current circumstances, the Fed would welcome a bit more inflation...

shkkmo3• 10 years ago

One big benefit to minimum income that I never heard discussed is the wonderful ability make the minimum wage obsolete. (Since minimum wage is merely an alternative route to achieve minimum income without using direct taxes and that doesn't help those with no job.)

Each time we hit a rough patch we could boost the minimum income to increase liquidity, and drop the minimum wage to stimulate job creation.

This has the potential to fix some of the inefficiencies of the job market. There are jobs that people enjoy or find fulfilling that don't provide enough 'value' to exist (or only exist in the black/barter market where minimum wage is not enforced). There are also jobs that nobody enjoys or find fulfilling, that should have been automated already, but haven't because we force people to work to support themselves and thus create a glut of cheap labor with the minimum wage as the price floor.

As far as to how we pay for minimum income, I love the idea I ran across on HN of directly and progressively taxing capital/assets rather than income.

jakeogh• 10 years ago

It is inevitable that the threat of withholding 'basic income' will be used to modify behavior. Didn't pay a fine? Didn't do your taxes? Post "radical" comments on the internet? On the no-fly list? On the no-drive list? Don't have a gov-issued InternetID™? No soup for you. How long until China couples it with it's human scoring system?

mikerichards• 10 years ago

So are you saying that basic income requirements will be very different than welfare is today?

mchahn2• 10 years ago

A socialists pipe dream, you might say.

A common misunderstanding. BI is not socialism.

    Socialism: A political theory advocating state ownership of industry.

dragonwriter2• 10 years ago

BI is certainly the type of thing many actual.socialists have proposed, and the definition of socialism you post is, while perhaps what made ght be found in a particularly compact general dictionaries, not particularly accurate or complete, even by the standard of general dictionary definitions.

mchahn2• 10 years ago

Then post your definition and its source. I just googled six of them and they all matched mine.

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