Hiring for Basic Income

https://blog.ycombinator.com/hiring-for-basic-income/

by mattkrisiloff • 9 years ago

83 126 9 years ago

blog.ycombinator.com

minimaxir• 9 years ago

Shouldn't this be posted in the Who is Hiring thread instead? :P

thedogeye2• 9 years ago

Sweet! Where can I sign up to receive my basic income?

Tycho4• 9 years ago

Apologies if this has been discussed extensively. But it occurs to me that the US (and maybe other Western countries) has a retirement crisis - ie. people have not saved nearly enough for their retirement, and state-related pensions/entitlements are a massive strain on the budgets.

So with that in mind, how the heck can these countries even consider rolling out a new "basic income" program? Doesn't this seem a bit incongruous?

dsr_• 9 years ago

Basic income would solve that problem too, by replacing the state pension programs.

(The US has very few real pension programs any more, since the 401(k) and IRA systems were put into effect and displaced them.)

sokoloff4• 9 years ago

I don't see this happening. Basic income will be a terribly spartan existence (I estimate not more than $650/person/month with pretty generous guessestimating).

Anyone who works for the government (including teaching & military) with retirement benefits is not going to subsist on just UBI once they stop working.

dragonwriter11• 9 years ago

Basic income would solve that problem too, by replacing the state pension programs.

This doesn't actually fit very well with the conceptual basis of UBI as a replacement for means-tested benefit programs, as defined-benefit pensions are not means-tested benefits.

Though its true that a number (though not all) UBI proponents have either explicitly called for replacing existing Social Security-style retirement programs, or implicitly suggested that by including the existing cost of those programs as funds available for UBI.

Tarrosion• 9 years ago

Part of the idea is that with a basic income, there's no longer a need for many "social safety net" programs: disability, social security, food stamps, medicaid, etc. The money saved eliminating all these programs (and their nontrivial overhead) can be used to give everyone a modest basic income.

I'm not sure if this is true or not. You can find serious people with reasonable seeming numbers on both sides of that argument.

eanzenberg• 9 years ago

Right.. Basic income essentially wants to take mone out of the pot currently reserved for the needy and disabled, and distribute it to able-bodied people who choose not to enter the work force.

wmf2• 9 years ago

Obviously if the same money is spread among more people, some people will receive less than they used to. If social security isn't enough to live on, replacing it with basic income could be worse. Eliminating bureaucratic overhead helps but it's not clear how much.

marcell• 9 years ago

The money saved eliminating all these programs (and their nontrivial overhead) can be used to give everyone a modest basic income.

This isn't really the case. Basic income is not about cost savings.

The programs you mention are wealth transfers, so the overhead is in fact trivial. They take money from person A, and give it to person B. There are checks in place to make sure person B qualifies, which accounts for the overhead. For retirement transfer (social security), you check each persons age--not too hard in America.

All those programs would have to be colossally, amazingly inefficient for basic income to be more efficient at redistributing wealth. Out of it's over $1 trillion budget, estimates of administrative overhead are around 1%. Even for more complex programs like foodstamps, overhead is likely low and under 10% [1].

Basic income is about wealth re-distribution, not efficiency. It applies a huge tax increase to the top 10-20% of society, and gives that money to the bottom 80-90%. It's that simple.

So the question everyone should ask is: should we have a policy of taking money from the top 10%, and giving it to the bottom 90%?

[1] http://www.huffingtonpost.com/susan-blumenthal/food-stamp-my... (not the most reliable source, but best I could find quickly)

lewisl9029• 9 years ago

I'm a huge fan of the concept of a universal basic income, but I don't see how it can be a replacement for social programs for basic necessities like food stamps.

There will always be people out there who will choose to blow their entire paycheck on frivolous purchases outside of their means and not have any money left over at the end of the month for food. As stupid and irresponsible they are for making that choice, a humane, post-scarcity society shouldn't just let those people just starve to death on the streets as a consequence.

As a much more charitable example, consider the case of someone getting into an accident and ending up having to spend all or most of their basic income on medical expenses. How could someone like this survive if the basic income were to completely replace all existing social programs?

So basic income will have to coexist with these existing programs. Perhaps the existing programs can be reduced in scale due to less people needing to rely on them thanks to the introduction of a basic income, but probably not nearly enough to completely offset the immense costs of the basic income program itself.

This means the overall expenditure for social programs will likely have to increase due to the introduction of a universal basic income, and I personally am perfectly fine with increasing tax rates on the rich to make that happen, but it's not going to be easy.

MichaelBurge2• 9 years ago

This is Y Combinator giving people money, not a state actor. It is probably(or should be) unconstitutional for the US to provide basic income, though the state of California might be able to.

wmf2• 9 years ago

The production version of basic income is clearly government-based. YC is doing a private beta to decide whether to lobby governments to provide basic income.

stevens32• 9 years ago

What's the argument for basic income through government being unconstitutional?

dragonwriter11• 9 years ago

Basic income (including its funding stream) can be implemented as an income tax with a fixed refundable credit per qualified individual [0], so its unmistakably exactly as Constitutional as federal income tax.

[0] E.g., if you decide that the UBI goes to all adult citizens and legal permanent residents, then that's the population that gets the credit.

thedevil• 9 years ago

I have the same concern. I've heard arguments, but none that adequately address the issue.

While I'm a fan of the idea of adopting basic income eventually, I don't see how we can fund it now without serious negative consequences.

Unfortunately the studies I've read about here on HN (including this one I'm guessing) seem to only address the positive side without actually comparing costs vs benefits.

3pt141592• 9 years ago

Every time I do the math for BI people I never get upvotes, so it never gets attention. Yes, one day in the far future basic income will work, but right now even assuming nobody that is currently working will stop working, it will cost a _ton_ of money. Especially from the top part of the tax bracket.

dragonwriter11• 9 years ago

So with that in mind, how the heck can these countries even consider rolling out a new "basic income" program?

Unconditional income programs (whether they meet basic needs or not) are conceived of as replacing some or all existing means-tested benefit programs, and reducing or eliminating the adverse employment effects of minimum wage laws (without eliminating the income-floor effects of those same laws).

They can be budget neutral by either being cost neutral (redirecting funds from the displaced programs) or by being tied to specific new funding sources. (Given that one of the long-term goals is to address long-term concentration of economic gains in capital rather than labor, capital-specific income or ad valorem taxation is the natural place to look for dedicated new revenue streams.)

Tycho4• 9 years ago

How can they be cost neutral? That would only happen if by luck the same number of people applied to basic income as previously applied for means-tested benefits. I find this scenario unlikely! Also, even if you have some new funding source, the system would have potentially huge liabilities if lots of people decide to sign up for it. Given that we can barely manage pensions, which I suspect have more stable characteristics than the hypothetical distribution of basic income requests, I'm skeptical that we could successfully manage a basic income program.

koolba• 9 years ago

Nonsense. Since when did not having money to pay existing obligations stop lawmakers from legislating new unpaid handouts?

thedogeye2• 9 years ago

The cost of basic income in the United States is about equal to the cost of getting us off permanently off of fossil fuels.

This is going to send heads spinning as we decide which one we care about more, poverty or the environment.

WaxProlix• 9 years ago

Sashimi and gyoza cost about the same amount but I had both for lunch yesterday.

RyanZAG2• 9 years ago

Getting permanently off fossil fuels is a one-off cost. Basic income is an ever increasing and perpetual cost.

I don't think they are comparable.

zaguios7• 9 years ago

For anyone who is interested, I actually recently started a basic income experiment of my own. You can check it out here: https://www.swiftdemand.com/

Essentially the way that it works is that anyone who signs up will receive 100 coins each day and they may be freely traded among users. Ideally over time people will start assigning real world value to the coins and then the daily income you receive from Swift Demand will function exactly how Basic Income is supposed to work. If anyone has any questions or suggestions relating to the service I would love to discuss them.

wehadfun2• 9 years ago

How is the experiment going. Are people using this yet?

zaguios7• 9 years ago

You can check out some information on the stats page: https://www.swiftdemand.com/stats

I actually only released the website less than a week ago so it's still incredibly new, but people have already done some cool stuff with it. This guy set up a website to write haikus in exchange for coins http://swiftpoetry.club/

I'm planning on setting up a service to allow people to more easily exchange coins into their local countries currency and develop an API so websites can more easily accept Swift Demand as a payment option, but these things are still in the pipeline.

wehadfun2• 9 years ago

Pretty cool! Any plan to open source this thing or give it to community. Would not want to do anything substantial for a swiftcoin if there is a concern that they could be taken away or lost or something.

literallycancer• 9 years ago

Ideally over time people will start assigning real world value to the coins and then the daily income you receive from Swift Demand will function exactly how Basic Income is supposed to work.

How is this going to happen?

zaguios7• 9 years ago

Hopefully the same way that Bitcoin established value. Speculation that the coins will be more valuable in the future. Obviously since the coins are constantly being generated you are never going to have the coins reach values of $1000 each, but it is possible if people suspect eventually they will be worth $0.10 a piece they might try to invest now by buying them at $0.01 a piece. Hopefully after this happens and the currency starts becoming more established it will be able to maintain that value.

tnecniv• 9 years ago

Assuming people do assign value to these coins, how do you plan to handle inflation?

zaguios7• 9 years ago

Inflation will be handled in by simply increasing the amount of coins given to users. For example if there is a target of 3% inflation YoY then then amount of coins given will be based on that target inflation level. Figuring out the exact numbers will be decided in the future once the service has gained mainstream adoption.

throwaway13337• 9 years ago

Interesting idea. The problem with this, though, is the same problem video game economies have with similar systems - people just make extra accounts.

Ensuring a single person has a single account would be a sort of holy grail here for many things. I'd love to hear ideas of a way to make it possible without sharing private information.

zaguios7• 9 years ago

Yea, the extra account issue is something that I have thought a lot about. My initial plan is to slowly increase the requirements for information. In the very near future I will be making email verification a requirement. After that I will be adding required phone verification as an extra step. Eventually once the service grows large enough I will be forced to start requiring private information to ensure that people are unable to game the system by creating multiple accounts.

simcop2387• 9 years ago

I've signed up for it. Not sure what I'll do with it yet either but I have some ideas for a webservice to toy with it. Do you have an API of any kind for interacting with the service? (e.g. to see the latest transactions on my account?)

zaguios7• 9 years ago

An API is on my todo list. There are three main things I am looking to add in the near future:

An exchange to allow people to trade their coins for normal currency An API to allow businesses to easily hook Swift Demand into their platform Added verification requirements (This one depends on the rate of growth)

covercash• 9 years ago

I didn't see any referral codes on here, so here's mine if anyone else decides to sign up: https://www.swiftdemand.com/users/sign_up?referred_by_name=c...

peter303• 9 years ago

A few years ago a bitcoin startup gave every MIT student one bitcoin to ivest or spend as they please. I never heard the followup of this project.

morgante6• 9 years ago

I don't want to be too negative, but this seems very meaningless.

I've just given you 5000 morgante points for your comment. I'll give you 5 more tomorrow! Nobody accepts morgante points for anything so it's inherently meaningless.

A basic income program is only interesting if it's actually giving out something of value. Your first step should be to assign value to a new currency, not to start handing it out.

I don't see a plausible path to value for your currency. Fiat currencies derive their value from government. Cryptocurrencies derive it from math. Yours is derived from your "word" that you won't just give yourself half the currency if you feel like it.

Not to mention that you don't seem to have any mechanism in place to ensure 1 person:1 account.

6d6b735• 9 years ago

"I don't want to be too negative, but this seems very meaningless."

It is meanigless but it wouldnt be hard to add some value to these "coins". For example, I can offer that one hour of my time as automation consultant is from today worth 100swifts. All you need is enough people to trust the system and it becomes real currency. after all money is just a way to allow people to trade their time or products without having to barter.

roymurdock• 9 years ago

Interesting that you've created a centralized system. This means that everyone needs to trust you at all times, as there are no miners or active nodes that can "fork" your ledger or ignore your code updates by working off an old/alternative ledger.

This could actually be quite dangerous for you if your project gains any sort of traction. Some unsavory individuals might be quite tempted to harm you to gain access to your digital "mint". If you made any unpopular decisions regarding the rate of inflation, market access, experienced a security issue, etc. you would also be subject to a lot of vitriol and potential violence. Not to mention that the government of any country where this is introduced would probably be itching to shut you down (whether they could would be an entirely different story).

Personally I think the answer to inequality, which is the main issue that BI attempts to solve, lies in tax reform. Especially on the rate at which we tax capital, and the loopholes that allow corporations and wealthy individuals to harbor capital in some low-tax jurisdiction; capital that they could not have earned and accumulated without access to the infrastructure and public services in the nation where they live and conduct business.

I'm glad BI is raising awareness of the problem of inequality, but I think it focuses too much on the wrong side - the distribution of benefits, rather than the taxation of profits. Piketty studied wealth/capital for the better part of 20 years and came to the conclusion that we need a global income tax [1].

For further inspiration on your project RE: fake identities, check out how Auroracoin was "airdropped" to Icelandic citizens, who had to verify their identity with a government-issued ID number to be eligible to collect their coins.

https://en.wikipedia.org/wiki/Auroracoin

[1] https://www.bloomberg.com/view/articles/2014-05-11/picketty-...

snarf212• 9 years ago

This is an interesting experiment. The one thing that people keep talking about is that with BI, people will have the freedom to do more things. Some might start a business (but that still usually requires additional extra money) or they might do things like volunteer or teach a class or help others.

I just had the thought that what if there was a currency that flipped it around. Doing good things for others is the only way to earn the currency. It obviously requires controls but then you could exchange it for food at a restaurant that accepts "good". I'm still thinking through a lot of implementation details but it feels like there is something here.

ToshiAtYamato• 9 years ago

I tried to make a service to pay with swiftdemand If you are interested, please try it.

http://ameblo.jp/toshi-atm-yamato/entry-12249882284.html

#Toshiatyamato

cpursley• 9 years ago

Hiring for Basic Income

So much irony in just four words. I love it.

selllikesybok2• 9 years ago

Might want to fix this -> https://blog.ycombinator.com/author/elizabeth-rhodes/

craigcannon• 9 years ago

Fixed. Thanks for the heads-up!

selllikesybok2• 9 years ago

Hmm, Elizabeth's author profile still show's Matt's info, for me...

desireco422• 9 years ago

It is really cowardly to use throwaway account when posting.

hnbroseph• 9 years ago

...and? cowards are people too.

withdavidli• 9 years ago

500+ days old and 877 karma. Doesn't look like a throwaway. Maybe just an ironic name.

sctb• 9 years ago

We detached this subthread from https://news.ycombinator.com/item?id=13708932 and marked it off-topic.

desireco422• 9 years ago

It is off topic, sorry moderators.

It seems whenever someone wants to say something a little bit controversial or not as mainstream, they use throwaway account. And I think this is not fair. I noticed this in number of discussions. And people like to throw opinions but don't stand behind them.

amelius• 9 years ago

I suppose that one good way to research BI is by making the national lotteries provide a prize that basically corresponds to a BI, and then make sure that participants agree to partake in the research (e.g., surveys).

andrewla5• 9 years ago

One alternative to unconditional basic income would be an presence-based minimum wage. The idea would be not only to replace welfare and social security and other conditional income sources but also replace the idea of the minimum wage with a funded mandate. I'm not sure where this idea came from, though I believe I heard it attributed to Milton Friedman (though I've not been able to find a reference).

The idea would be to have an auditorium, where you would come in and sit and do nothing, and be paid the minimum wage when you leave based only on the amount of time you spent in the room.

Individuals would be free to accept wages lower than the minimum wage for outside jobs, but employers would have to compete with that minimum wage for employees, so any lower wages offered would have to compete in other aspects -- pensions, tips, benefits, opportunities for advancement, etc.

Because this would require physical presence, it would naturally be self-limiting in some aspects of abuse; you can "sit" as many or as few hours as you wish, but you cannot use that time for other productive work, so there's a natural fall-off of benefits as you choose to work instead (rather than an artificial administrative "cliff").

There are other aspects which seem very vulnerable to abuse -- why not just sleep there, what about doing remote work on a laptop, what about setting up shop and selling hot dogs in the room, etc. And there are some aspects which seem logistically problematic -- how do people commute to the room, how many rooms do you need, what about people who have disabilities that prevent them from travelling, etc.

But generally all of these seem addressable, and some of them might just be self-regulating by social norms, so that there is a small but acceptable amount of leakage due to abuse.

It seems administrative simpler in some regards than UBI, in that the uniqueness of a recipient is more easily enforceable, and it doesn't just change the y-intercept of the income curve, but rather semi-truncates it, so might be less vulnerable to attempting to extract the income through rent increases.

It also more easily adjusts to location-based pricing sensitivity -- it's totally reasonable for a place like SF to have a higher "minimum wage" than a less expensive city (just as minimum wages can float from state to state), and the requirement for physical presence makes it harder to game this.

naravara• 9 years ago

You're going to have auditoriums full of smelly homeless people whose mere presence discourages others from participating in your program the way they already do with public parks and libraries in low-income areas. Unless you have mental health facilities to take them in in addition to the cash-auditorium you're going to be SOL.

Addressing all the addressable avenues for abuse is also going to be a grim looking situation where you're going to be policing people sitting there to make sure they're not sending e-mails from their phones or having conversations with each other or reading books. Lots of peoples' jobs involve studying or having meetings.

andrewla5• 9 years ago

I don't have any particular problems with what you're saying, although it feels like a lot of the abuse around camping and doing work will be offset by the problems of stigma associated with being in one of the centers. That is, there's no need to police people to make sure that they aren't doing outside work or reading, when being in the center itself is not a particularly fun -- people who can afford to not be in the center will most likely choose to spend their time elsewhere.

That may not sound particularly humanitarian, but keep in mind that this also benefits the "smelly homeless people" likely in ways that the current systems (what good is a minimum wage when nobody will hire you) or UBI (what's your mailing address, sir, where we can send the check, or where's your photo ID?) will not.

dragonwriter11• 9 years ago

One benefit of a mature UBI is that it enables people to do training and other activities which prepare them for jobs in a changing economy, another is that it enables them to attempt entrepreneurial endeavors without risking basic survival.

Both of these are, obviously, lost in a presence-based minimum wage, which also abandons adds additional administrative overhead compared to UBI. AFAICT, this idea is strictly worse in terms of benefit and implementation cost.

andrewla5• 9 years ago

I think I address most of these arguments in my reply to bluenose above.

The claim that this adds administrative overhead and increases implementation cost and decreases benefit in particular I think is incorrect.

Since most people will not participate in the "wasted-work" program (I need a pithy name for this scheme), the benefit per participant can be scaled up considerably from what UBI could provide on an individual basis.

Administratively I think it's probably close to a wash -- UBI has the administrative difficulty of preventing or detecting fraud (duplicate identities in particular), "wasted-work" has the administrative overhead of employing reliable "doormen" for the centers, and the real estate costs (and maintenance, etc.) of the centers, not to mention any administrative costs associated with attempts to fix the problems I highlighted around "commuting costs".

Both programs have the problem of setting the appropriate level of compensation and updating it to reflect changes in cost of living, but as I mentioned, "wasted-work" can be more sensitive to regional variations in the cost of living than UBI can (without a hugely increased administrative overhead).

lilactown• 9 years ago

One of things I hope some sort of UBI-esque program would do is allow people to create value in ways that are currently economically infeasible. This solution stomps on that while keeping one of the worst aspects of our current system, which is feeling stuck in a position where you're creating little value/care very little about the work but are chained to it because of lack of options.

andrewla5• 9 years ago

As I've mentioned in other replies, for the same amount of dollars pumped into UBI (where it has to be distributed to the entire populace), this system can distribute that money instead to a much, much smaller segment of the population.

If, say, 10% of people opt to participate in "wasted-work", then each will receive 10x the benefit they would get from UBI, meaning that would be able to afford to save up money, or work part-time and still have sufficient money to support themselves while they pursue the "creation of value in ways that are currently economically infeasible".

UBI sounds great, but on a dollar-for-dollar basis it just seems worse than this because the level of compensation cannot be as high.

bluenose• 9 years ago

This seems like the worst possible option. Forcing the time to be "wasted" destroys the potential of doing any creative, productive work, self betterment activities or even taking care of "personal business" such as housework, errands, etc.

The notion of creating a market pressure on minimum wage employers is the only redeeming aspect, but gets there in the most destructive possible fashion I can imagine.

Rating: 1/10, would not recommend.

andrewla5• 9 years ago

I appreciate the feedback; these are interesting points.

To be clear, though, these are all attributes of the current system. The potential isn't destroyed, it just requires a rational examination of the tradeoffs. And this is assuming that the minimum wage offered here would be far inferior to what someone would get through UBI -- a UBI that amounts to a baseline income of $10,000 a year, for example, is unlikely to inspire hoards of people to become artists or to take classes; they'll likely have to take minimum wage jobs to make up for the price increases that will be associated with the UBI.

Similarly, if the wasted-wage salary level is set to something higher; like if working a 20 hour week would be sufficient to support a family, then I feel like it would provide the benefits that you associate with UBI.

In my mind this is more a question of how much benefit could be provided given that both programs would (theoretically) receive the same funding. Given that most people would not be participating in the "wasted-wage" program, coupled with the reduction in overhead for preventing personal-identity-based fraud, I think bang for the buck you could fund a much higher effective part-time salary with "wasted-wage" instead of UBI.

Hiring for Basic Income

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