Universal Basic Income Explained – Free Money for Everybody? [video]

https://www.youtube.com/watch?v=kl39KHS07Xc

by shaunlgs • 9 years ago

31 87 9 years ago

sharemywin4• 9 years ago

I still don't see how UBI doesn't cause inflation enough to offset any benefit(in the near term ie before robot job apocalypses).

bryanlarsen• 9 years ago

Inflation is a monetary phenomenon. As long as you are paying for UBI through taxes rather than by printing money, there shouldn't be any overall inflation.

Certainly there will be price adjustments: the prices of some things will go up while others will go down. But that definitely wont "offset any benefit".

dmm3• 9 years ago

Inflation is a monetary phenomenon.

Is it? The US monetary base has more than tripled since 2008 but inflation since then is only 14.6%.

For comparison between 1999 and 2008, the us monetary base increased by about a third and inflation between those years was around 29%.

sharemywin4• 9 years ago

That's assuming the people getting taxed are spending less on the same things (in the CPI) that people that are getting a surplus benefit are spending more on.

Otherwise the rich are investing less and the poor are spending more on consumption. asset prices go down cpi goes up.

mcguire3• 9 years ago

Maybe, maybe not.

I can see a situation where necessities increase in price, leaving low income household in the same position they have now.

thriftwy5• 9 years ago

Because many (most?) markets are buyer's markets.

You try to increase prices, you are out of business which is eaten by competitors.

sharemywin4• 9 years ago

if everyone's costs go up everyone will be forced to raise prices.

wu-ikkyu2• 9 years ago

Maybe using a resource based UBI rather than a money based UBI could help avoid this problem?

jandrese5• 9 years ago

UBI is a fancy way of saying "take from the rich to give to the poor". It has to be combined with a progressive tax system to make sense.

This isn't even a bad thing from an economic standpoint. Capitalism has the problem where wealth tends to accumulate upward naturally (rich get richer just because they're rich and have a bit of financial sense) and eventually starves itself of demand. Re-injecting cash in the low end keeps the economy moving despite this natural tendency. UBI has the advantage of low administrative overhead too, so more of the money gets used on goods and services. Also, unlike Welfare there is no perceived disincentive to work.

That said, UBI has its problems. Prices at the low end are likely to go up simply due to lack of workers. If you have UBI why would you do backbreaking manual labor all day for minimum wage? To really work well it has to be paired with increasing automation of low end jobs to offset the labor imbalance, otherwise you end up with inflation as people are forced to pay higher wages to fruit pickers, fry cooks, etc... in a competitive job market. Or more likely, those jobs will move overseas at an increased rate to countries where the labor market is skewed towards employers and they can pay people well below the value they generate.

skybrian5• 9 years ago

This supposed problem of higher wages would also be an argument against raising the minimum wage, and yet many people are in favor of that because they think low wages are the problem.

If UBI does indeed raise wages at the low end, it's because people have more options in life and made their own choices. Seems like a good thing, no?

More generally, inflation is usually a bad thing, except in the labor market where it's a good thing. If wages go up and the overall price level doesn't go up as much, that means people are earning more without their expenses going up as much.

notzorbo34• 9 years ago

I still haven't found an solution anywhere for the following problem: Living (not just housing, but everything) expenses are a lot less for dual, or even triple, income households than for single people. So there's going to be a lot less pressure on dual income households to work beyond their basic income. Logically, this would put double (or even triple) the additional pressure on single income households. Under UBI, they'd have to provide enough in taxes to provide the UBI for themselves AND dual income households.

How do UBI proponents solve that problem?

Hello71• 9 years ago

why is it a problem?

SapphireSun• 9 years ago

I think this question is only answerable with specific numbers. If UBI = $1 / person, then the difference in pressure is small. Also, you presume that people only work for money. I think with UBI, you'd see a revitalization of community oriented, but low profit pursuits.

notzorbo34• 9 years ago

If UBI = $1 / person, then the difference in pressure is small.

The pressure might be small, but it's still there. The €1 still has to come from somewhere.

Also, you presume that people only work for money. I think with UBI, you'd see a revitalization of community oriented, but low profit pursuits.

How are low-profit pursuits going to pay for everybody's UBI? You can't heavily tax low-profit pursuits.

dmm3• 9 years ago

UBI encourages marriage whereas traditional social programs discourage it. What's the problem?

notzorbo34• 9 years ago

Traditional social programs are a safety net for single people like those going through divorce and such. Under UBI, it just puts a lot more pressure on those people, while at the same time alleviating the pressure on multi-income households. It's might force people to stay together in unhappy marriages, etc. I see that as a problem.

peapicker• 9 years ago

Encourages co-habitation anyway.

ajross• 9 years ago

That's no different than it is now. Single family homes are incentivized to work more and thus contribute a disproportionate share of taxes. It doesn't matter what you spend those taxes on.

Then again, multifamily housing has less access to the mortgage interest deduction, which cuts the other way.

Basically, this is the deal we've already decided on in our society, and AFAICS it hasn't caused problems.

dragonwriter3• 9 years ago

“People can reduce essential shelter and some other expenses and increase their free cash flow by choosing to love together” isn't a problem; it's just a basic fact that is as true without UBI as with it, which encourages expense sharing and group living arrangements, especially among the less wealthy.

exabrial• 9 years ago

First line: "What if the state covered the cost of living?"

Who is paying for the income? It's not "The state". It's everyone else, by taxation. You're telling people you have a right to seize their earnings for their labor. You're literally taking someone else's money, and giving it to someone else. UBI is nothing but people ignoring the moral problems of seizing assets and saying "The end justifies the means."

If a billionaire philanthropist wants to sponsor UBI voluntarily, that's a different matter. Or if you want to donate to a charity that funds UBI, please do. It'll be an interesting economic experiment. But taking assets from people and giving them to another person is wrong, no matter how good the outcome is.

sbjustin3• 9 years ago

I'm not sure why this is being down voted as this is a matter of opinion - an opinion that many agree with.

In fact, in the US there is nothing in the constitution that supports the taxation of the people for these programs.

I'm all for UBI actually but this opinion is still valid.

jandrese5• 9 years ago

Because capitalism doesn't work without taxation, not in the long term. This probably sounds weird to most people, but it is the truth.

In capitalism money naturally accumulates at the top, but the whole system depends on money changing hands regularly. It's the essence of the economy. With no taxation all money ends up at the top with people who have nothing to buy, the system grinds to a halt and you have total economic collapse. In order to keep the system working the rich needs to keep feeding money back into the bottom so it can trickle back up to them. Human nature being what it is, you can't expect people to do this on their own. A few (Bill Gates for example) will, but in the majority of cases they would rather sit on the money so it can make even more money for them. Giving to the poor is not "fiscally responsible". Plus it would be very inefficient to make every multi-millionaire/billionaire/multi-billionaire manage their own welfare system.

That's why it is the government's job to redistribute wealth downward to keep the economy healthy. We have endless examples of governments that failed to do this and ended up with stagnant economies and endless economic depression. Look at feudal European economies for example, where the lords hoarded the cash and left charity to the church.

If you want to see this in person, crack open a game of Monopoly. The winning state in Monopoly is total economic collapse where one person has all of the money and nothing to spend it on. If you want to make it more realistic start the game with one player having $20,000, two with $200, and everybody else with $1. That's how real life economies are. If those $1 players lose tell them they didn't work hard enough and that they should pull themselves up by the bootstraps.

rtkwe• 9 years ago

I haven't really see the constitutional challenge question come up. Seems like there's nothing really different than any number of other federal assistance programs funded by taxes other than scale.

As for why the down votes it's probably because it's the really tired 'taxes are theft' argument that a lot of people are really tired of hearing and arguing against.

boomboomsubban2• 9 years ago

But taking assets from people and giving them to another person is wrong, no matter how good the outcome is.

This describes "profit" equally well as "taxes."

sbjustin3• 9 years ago

No. Profit is given, not taken.

CaptSpify3• 9 years ago

You aren't complaining about UBI, you are complaining about taxes (yes, I get how they are related, but they aren't the same thing).

We've long ago decided that we as a society are OK with taxes. If you don't want to pay them, go somewhere that doesn't make you pay them.

ameister144• 9 years ago

No, no he isn't. There is a difference between paying taxes so that the government can provide services and an A-B transfer.

For example, the government can, in some situations, seize land. The government is not generally allowed to then give that land to other citizens. There have been a couple of cases that came close to that, and if you read the majority opinions on them you'll see the logical foundations.

sbjustin3• 9 years ago

You are mistaken. We as a society have agreed to pay taxes for certain things. As defined in the constitution, some are the post office and raising a military. We pay taxes and expect to get X in return.

Your argument is comparable to saying we've as a society accepted we pay for food. What we get in return for whatever we pay is not part of the equation. I won't pay $40 for a fast food burger.

wu-ikkyu2• 9 years ago

You're literally taking someone else's money, and giving it to someone else.

You just decribed taxation in general. Should people be taxed at all? If so, should they have a say in how the money is spent?

rev_bird7• 9 years ago

You're telling people you have a right to seize their earnings for their labor.

You don't think this is happening now?

A hypothetical, though not a very abstract one: A wealthy investor uses some of their money to buy a corporation. Thousands of people drive to work every day and sit at a desk for more than half of their conscious hours, making money for that company. The investor stays at home, doing whatever he wants. At the end of the day, the investor is many thousands of dollars richer, while the employees have all make $70 in wages.

Capitalism is explicitly about seizing earnings generated from labor. You're not defining "taxation," you're defining "corporation."

PatientTrades• 9 years ago

Universal Basic Income is necessary for humanity to reach to higher goals in their evolution. Wasting 8-10 hours of the day doing a job that robots could do much better is not the best use of human intelligence. Imagine the discoveries and inventions that would happen if humans could devote all of their time to their passion. The benefits drastically outweigh the minuscule downsides

IncRnd• 9 years ago

Would UBI be available only for citizens or everyone living within the borders?

Thoughts?

delecti3• 9 years ago

Ideally eventually it will be truly universal (at least on a global scale). In the short term, the question of "citizens only?" is a pretty big complication. It means countries that start UBI sooner will be incentivized either to discourage or restrict immigration, or to limit it to citizens.

fpgaminer2• 9 years ago

When it comes to UBI, there's an interesting psychological phenomenon.

I believe that McDonald's and similar establishments could have automated away the vast majority of their work force years, maybe even decades ago. And yet there are still people working there. In fact, McDonald's is often viewed as many people's first entrance into the work force, and as a safety blanket if anything goes south (well worst case at least I can go work at McDonald's or something).

In other words, I believe McDonald's and its kin are a form of social welfare.

We see this elsewhere, in less subtle ways. Tons of jobs that shouldn't exist, but which are kept afloat by regulation designed specifically to preserve those jobs.

We pay either higher taxes or higher pries to achieve both of these forms of social welfare.

And yet, support for these jobs and social actions is generally quite strong. Hence why restaurants haven't fully automated themselves; the market would vomit at the idea of those thousands of jobs being replaced by machines. Regardless of whether that would save people an incredible amount of money, they are willing to accept those sacrifices in exchange for those jobs being available.

In that light, what's the difference between what we have today versus UBI? Either you're paying someone to do functionally meaningless work, or you're paying them to do "nothing". Under the former, their work is _truly_ meaningless. Under the latter they at least have the chance to do something beneficial for either themselves or others.

Personally I haven't formed a real opinion of UBI. Even in light of the above arguments, the complexities make it a problem not so easily reasoned through. But I suppose my point is that UBI isn't as drastic a step as many imagine it to be. It would be more of an evolution of our existing, de-facto social welfare programs.

EDIT: Addendum: When I use the term meaningless here I'm really just using it for the sake of argument. Obviously no one's work is meaningless. Just because a machine could do the exact same job that a human can do, doesn't mean that the task, as performed by a human, is meaningless. The true thrust of my argument is that a human performing the task subtracts value from the economy relative to a machine doing the job. It's sub-optimal.

the-dude• 9 years ago

In the US, the army is the social welfare.

Your argument about McD's fails because they are automating away their workforce with their self checkout systems.

skybrian5• 9 years ago

Or possibly, service jobs are harder to automate than it appears? What evidence do you have that it's easy to automate?

In theory, you could replace a McDonalds with a vending machine, but it's not the same thing.

mcguire3• 9 years ago

Automats predate McDonald's by a considerable time.

fpgaminer2• 9 years ago

Possibly. Customer facing service is certainly difficult to automate away. But I believe behind the counter workforce should be relatively simple. It's hard to fathom that the unskilled masses who end up working there can't be automated away.

It's not like we don't already have automated cooking lines. All the precooked foods at stores are from automated cooking lines. Just replicate that in the back of a McDonald's. I don't find that hard to fathom.

Some will say that "Well if McD's could have automated away those jobs already they would have." Market optimization and whatnot. But the market is always optimal from a _human_ perspective. Case-in-point: McD's switching away from their "pink goo" because of the backlash against it. Using pink goo was cheaper, but the uproar threatened demand, so they have to use more expensive alternatives. In the same way that I believe many, many jobs have not been automated away simply because the public backlash would destroy any business that tried.

rev_bird7• 9 years ago

I believe McDonald's and its kin are a form of social welfare.

If anything, I'd argue the current state of affairs is a form of corporate welfare. McDonald's profits by paying its workers as little as possible; because McDonald's employees typically don't have a ton of negotiating power, that amount is usually very little. Paying someone the minimum wage is a company basically saying "I want to pay you less but it's literally illegal."

When McDonald's refuses to pay their employees a living wage, the rest of us pick up the slack in the form of ACTUAL social welfare programs—food stamps, subsidized housing, tax credits, etc. The reason McDonald's workers can be so poor but McDonald's the company can be so successful is because the taxpayer is funding their payroll. They are not our friends.

lev99• 9 years ago

A UBI of $12,000/year given to every adult by the goverment would double the annual government expenditure.

That is fine, but we should have a talk about how the program is funded. This is one of the reasons I prefer talking about negative income tax. Yes, the concept is more complex, and has a worse acronym, but it is largely self-funded.

peterwwillis2• 9 years ago

Take it out of the 576 Billion dollar defense budget that makes up more than half of all federal spending?

aaron-lebo• 9 years ago

That's not 3 trillion dollars.

ihm• 9 years ago

You could start with the Republican’s 1.5 trillion dollar tax break for the wealthy, and also the defense budget as the other commenter mentioned.

bjt2n39042• 9 years ago

There would be still be very rich and poor people, but we could eliminate fear, suffering, and existential panic for a substantial part of the population. #6m28s

I actually laughed when I heard them say this, given their videos on things like the Fermi Paradox.

ghostbrainalpha• 9 years ago

Can you break that down a little more? I'm having trouble connecting those two statements.

bjt2n39042• 9 years ago

Many of their earlier videos (before they started to do "What If" videos a la XKCD) focused on the confusing, absurd, and seemingly meaningless existence of humanity -- so much so, that they made a video on "Optimistic Nihilism".

They're quite reserved in the statements that they make, as well. They won't say life is meaningless, only that we haven't found something we truly agree upon as meaningful, and given that the universe is headed towards big crunch / heat death, what does it all matter?

Given those two points, I found it amusing that they'd go so far to say that simply giving someone $1000 a month COULD resolve misery, suffering, and existential angst. It seems to fly in the face of their ethos.

hypertexthero• 9 years ago

Here's a good FAQ on Basic Income:

http://www.scottsantens.com/basic-income-faq

lumberjack• 9 years ago

What a dystopian future. So then, 99% of the population will be powerless, barely subsisting, as if they were rabbits in a cage in the pet store, while the remaining 1% own the entire world.

shams93• 9 years ago

Its not even going to turn out THAT nice. The new tax cuts assume that the poor will always be working, but between the loss of net neutrality and the automation of driving jobs we're looking at the loss of 95% of male work within the next 10 years. But the rich have divested themselves from society so state and local government will break down and most likely when you lose your career you will land in a concentration camp. The only working class jobs will be capturing torturing and executing the former working class.

rev_bird7• 9 years ago

between the loss of net neutrality and the automation of driving jobs we're looking at the loss of 95% of male work within the next 10 years

I'm pessimistic about the same legislative issues you are, but what on earth does this mean? "Transportation and warehousing" accounts for 3.2 percent of all jobs in the U.S. and is actually projected to hold steady between now and 2026.[1] What does net neutrality have to do with anything? Is this... a real comment? Do you really think they're going to send all the boys to concentration camps because their jobs got taken by self-driving cars?

[1] https://www.bls.gov/emp/ep_table_201.htm

thriftwy5• 9 years ago

So, do you have other kinds of future to offer?

Joeboy• 9 years ago

(in the context of first world countries with functional welfare states)

I'm deeply skeptical of the idea that we're going to get some sort of new deal where the rich are suddenly happy with increased subsidy of the poor, in return for increased social cohesion or whatever. The rich generally resent paying taxes and avoid it where possible. Why are they suddenly going to be happy to pay more tax, to subsidize people who have no specific need for the subsidy? Supposing the US replaces its welfare system with basic income, surely the next thing that happens is that the rich buy a government that guts or kills basic income (which is, by definition, not needed). I suspect if you want the rich to pay for this you're going to have to be prepared to go full French revolution.

I'm glad the video briefly touches on this question, but I find it frustrating how much of this debate focuses on the silly question of whether receiving free money morally taints people or whatever.

Edit: I mean, one of BI's highest profile advocates is Mark Zuckerberg. Does Mark Zuckerberg seem enthusiastic about paying tax?

rev_bird7• 9 years ago

I suspect if you want the rich to pay for this you're going to have to be prepared to go full French revolution.

The real challenge is decoupling capital from political power. Otherwise, yeah, why would the rich just sit and watch it float away? If "more money" continues to translate so literally into "more influence," it's pretty hard to blame the rich for using their money to influence the government in ways that will help them continue to keep their money—at that point, it's just an investment.

Of course, this kind of supposes that the working class wouldn't vote to do that on their own. Given the recent trends in American politics, I've stopped making too many assumptions about the weird decisions we make as a group.

thriftwy5• 9 years ago

My take: most of moneys nowdays go not to "the rich" but to various bubless and financial whirpools.

It is possible that the rich would not oppose trading the depressed economy where the only thing growing is bubbles to healthy economy in which they get to keep relative wealth compared to their peers (albeit with smaller gap versus median person).

rpiguy• 9 years ago

The true long term vision for basic income, which this video does not touch on, does not involve the rich subsidizing the poor.

When birthrates stabilize at or below the replacement rate it becomes difficult to grow an economy. Typically countries turn to immigration to make up the difference, but there are other ways (see below).

Furthermore for economies such as the US economy, it needs consumers more than it needs producers. We are a consumer driven economy.

So what does this have to do with UBI?

Another way to grow the economy is to print money, and ultimately I think this is where UBI is headed. Instead of importing bodies to consume more, you simply create money so your existing individuals can consume more.

Supply side economics seems to win when populations are growing, but good old aggregate demand style economics may win out the day once populations stabilize.

In the near term I agree with you, I don't see giving up a giant military, or high enough tax rates to pay for a basic income scheme.

b62• 9 years ago

5:23 ... many argue that it might be time to distribute the spoils more evenly to preserve the social peace.

This does not come from principles. It sounds like a stickup.

rev_bird7• 9 years ago

Workers have been generating increasing productivity for decades—Americans have never created more wealth. Yet wages have stagnated, companies have trillions of dollars squirreled away, and the richest families in the country have more money than many millions of the rest of us. Who's getting robbed?

b62• 9 years ago

Who's getting robbed?

Is it the really the case that anyone is being robbed?

DoreenMichele• 9 years ago

If you want to see a solid critique of practical challenges facing UBI that most proponents do not really address, I highly recommend this piece:

https://medium.com/@simon.sarris/after-universal-basic-incom...

Universal Basic Income Explained – Free Money for Everybody? [video]

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