There was an experiment in Canada in the 70s, Mincome. It went really well, from everything I can find about it, with increased school attendance and decreased hospital visits.
There was recently an article about a study on the prevalence of hookworm in is US south[0]. It seems to me that basic income could go a long way towards resolving this issue. One of the examples cited in the article involved a trailer park where they pumped sewage into open pools. If every member of the park was getting some form of basic income, the state could require the trailer park to install a septic system and the trailer park, in turn, could charge it's renters more and put in the system.
Currently it sounds like a blood from a stone situation: no one has any money, so requiring the park to install a sanitation system would simply cause it to file bankruptcy, likely with no change of any kind.
> If every member of the park was getting some form of basic income, the state could require the trailer park to install a septic system and the trailer park, in turn, could charge it's renters more and put in the system.
What you're describing is a special case of the exact sort of inflation that critics are afraid of (more money for tenants across the board just means more money that rentiers can extract).
If the argument is "we could use tax money (via a stipend to citizens, and then extracted as rent) to implement a law that required a trailer park to provide a functioning sewage system", then the easiest and most efficient way to do that would be use tax money to provide a functioning sewage system.
If, today, the trailer park owner is not required to provide adequate sanitation (which strikes me as heinous btw), why would UBI change that? Either the state couldn't care less or their are laws that are being flouted. Either way, it's not clear why a change in distribution methodology would change either.
The bit of your argument that I completely agree would occur is that the trailer park owner will charge the renters more. That's pretty much a given. Whether or not the renters will receive anything for that rent change is likely to be an orthogonal question.
My concern with UBI isn't that it won't work. It's that it's a right winger's wet dream.
I mean, imagine. With a great fanfare of fairness, we give everyone $x00/month. Dismantle all the means tested benefits for pensioners, disabled etc. Then watch as successive governments either ratchet it up or ratchet it down depending on their persuasion and the state of the economy. And as a target for when things get tight, it's a bloody big one.
The only really meaningful change from the status quo would be that the the truly disadvantaged would get royally stiffed.
The governments routinely implement plans without reasonable research to back up their claims, so why not try this?
There have been some studies, and from my recollection the takeaway is that most people, once their basic needs are met, strive to actually do something "useful". People on average do not become drug-addled sloths.
For many reasons it is difficult to do a comprehensive, long term study on this idea. The first, of course, is the cost. People or organizations with the money to spend on research tend to be motivated by profit, and thus far we've been taught (incorrectly, I would argue) that giving things away doesn't result in having more for yourself.
Don't forget that that money will also be spent on things, it doesn't just disappear, probably at least half of it comes back right where it came from while in the meantime making sure that those people in the USA that are currently living by third world standards are maybe getting closer to BRIC level of life.
There are already quite some levels of welfare here in the US, including food stamps, government healthcare, housing allowance, and welfare money. You’re much better off being poor in he US than the countries in your acronym.
If you increase taxation at the top ranges (and close loopholes the very rich and their corporate personas use to evade taxes and so on) you'll end up just injecting those trillions back into the economy.
If you use that to replace means-tested aid, you get rid of the management overhead.
And, maybe, if the US cuts costs for the military, making them build roads and schools instead of bombing them, you'll realize you really didn't need to spend that much in the military anyway...
There is also an important point in terms of opportunities lost due to low surplus. As you reduce the pressure on the poor, they will end up making better decisions (http://thepsychreport.com/research-application/featured-rese...) with better overall outcomes.
The authors are fools. Would the money just picked from the money tree? Increasing the money supply supply would result in an increase in housing inflation, just as it has now.
Ignoring whether the study's assumptions are accurate, one problem with this sort of rhetoric is that "the US economy" isn't a political constituency. There's just people, and their claims on the economy in terms of personal wealth and income.
It's sort of like when you say "NAFTA grows the US economy but $1 trillion" and the guy who's job was outsourced to Mexico ask "Okay, but how does that help me make rent or buy groceries for my family?"?
Basic Income (and other welfare schemes) are like that too, except for the rich. They're absolutely worse off if the economy grows 10% but their personal wealth and income declines by 20%.
Personally I'm a fan of UBI, but I sell it as (1) welfare is the right thing to do, and (2) UBI is the most efficient way to do it.
I'd probably start with something less than $1,000/month though. I'd offer a package deal to employers and the rich that looks like this: the government will pay healthcare costs and provide $500/month to each adult and $250/month for each child, and in return we abolish the minimum wage.
Are they worth X though? What if they produce X-1 in value? Would you hire someone who cost more than they produced?
Someone's wage has an absolute ceiling at the level of "this is how much value I produce per hour". No one will hire you for more than that. And currently, there are some people who cannot be hired at minimum wage.
A UBI (and national health insurance) would help a lot with wages though. With less fear of losing their job, employees would have more bargaining power. They'd also have more resources to spend on commuting or time off work for interviews. By expanding the number of potential employers a person has access to, you indirectly allow them to bargain for higher wages, even without explicitly setting a minimum wage.
Alternatively, it's "you cannot hire employees who are less valuable to you than this arbitrary threshold."
If someone wants to work for $1 / hour and someone else wants to hire them for $1 / hour... what right does a third party have to prevent them from doing business with each other?
I'm currently on an Amtrak train between Philadelphia and NYC.
Especially in leafless winter, the sheer uglyness of this swath of in-disrepair America is almost shocking.
Abandoned factories and houses. Lifeless downtowns. Trash along the tracks. Non-sweet graffiti.
Paying people to do nothing when there is so much to be done seems crazy to me. It's not like we have figured out how to solve these problems with AI or robots yet.
I could listen to an argument for paying people to participate in FDR-style public works programs. Building a bicycle lane network. Planting flowerbeds. Demolition and recycling and then re-urbanization or re-forestation of those crumbling factory grounds. And so many more things that would make this a better place to exist.
If you want to point to the single concept that has to be re-examined to understand basic income it is this one:
"Paying people to do **nothing** when there
is **so much** to be done seems crazy to me."
It speaks to the foundation question of value for capital that is pounded into our heads (in the US at least) from birth that if you want to make it you need to get a job that pays well. And it forces us to ask the very important questions and re-examine some of our assumptions.
Some of the things I have thought about when considering BI have been, is it really "nothing" we are paying for? Lets say you're living in a neighborhood without any jobs available, and without jobs and property taxes your educational infrastructure is lacking, and without a job in the first place your mobility is lacking. However you do find employment in selling illegal drugs, the market is wide spread, the risk is low for the street level dealers. Now into that market your provide a basic income for the youth who can now pursue their interests without participating in some form of underground economy. Can you see paying people to not participate in that economy?
When I think about BI I have come to think about removing worry rather than paying for 'nothing'. IF you look at income disparity versus economic efficiency, economies grow when there is incentive to get ahead but they begin to contract once that disparity exceeds a threshold. If the bottom of the economy is worried about where they are going to sleep and eat tonight, they aren't very efficient or contributory to the overall GDP, if the top end of the economy is keeping all of its wealth bottled up in trading games with other top end users, it isn't contributing to the overall GDP either.
If you force disparity to zero, you essentially get communism, if you leave disparity unconstrained forever you appear to get monarchistic type trapped wealth. If you change the rules of the game so that people can be wealthy or not, but the total difference between maximum wealth and minimum wealth is constrained to 2 orders of magnitude rather than 4. Perhaps you get a better system overall.
Money represents value created. If you simply hand out money, say in the form of BI, without it being in exchange for value created, you are simply deflating the value of money. This will cause inflation. And you'll end up back where yo started - the recipients of BI have more money but its buying power has been reduced, canceling each other out.
I'm with the parent comment. There is so much work to be done in this world - we should first try to tackle those before taking the BI shortcut.
Wouldn't the most logical thing be for people to reinvest their BI in the illegal drug trade? It's not like there isn't precedent for that kind of thing happening elsewhere:
"And some projects aimed at reducing poaching by alleviating poverty have backfired, said Duffy. For example, one program in Ghana was intended to decrease poaching by paying a premium on crops, on the theory that hunter-poachers would focus instead on farming. They did for a period, but then used the money they’d earned to buy more sophisticated weapons that they used to shoot more lucrative species [1]."
Beyond that, everyone seems to ignore the inflationary nature of BI. What will happen to the economy in real, not nominal, terms?
It's possible that a basic income would help with the rest of these, by taking the edge off the (currently very high) opportunity cost of spending time on community improvement for working class Americans.
It would also move money back into these economies in a way that support some of the kinds of industrial district revitalization that you see in more urban areas nowadays.
All in all, the capitalist in me wants to say that you'll get better results if you just give people money and let them figure out how to dispose of it, rather than letting some government bureaucrat off in the state capital or wherever try to figure out how best to use the money. The latter option is worryingly similar to the root causes of the worst of the prosperity-destroying waste that went on in places like the Soviet Union. And I do think you'll see people (mostly) put the money they'd get from a basic income to good use. It's not like anyone enjoys living in a blighted town; it's just that they're living under economic conditions that leave them with little other choice, aside from maybe doing like I did and contributing to the blight by moving out of town.
You need more than BI and warm bodies to improve your crumbling city infrastructure. There's a whole lot of skillsets that go into infrastructure development, including some type of organizational structure.
We already pay people to do nothing, in the form of dividends and capital gains. And we pay them a lot.
I'm a fan of UBI in that I believe we have the ability to provide everyone with the basic necessities of life, and providing it without demeaning means-testing and the attendant labelling and stigma seems the right way to do it.
But I'm not a fan of only giving money. That money ultimately comes from the corporate economy, which owes a large debt to the common purse. For example, we pedestal google, amazon, etc, but they wouldn't exist without the DARPA (government) funding which created the internet, and even more basic research before that, law and order to protect it, education to allow people to even read it, a road network to allow it to spread, I could go on.
And then there are what should be commonly-owned monopolies like land, radio spectrum, etc, etc. So I think corporations, rather than just paying this "common debt" in taxes (which they don't appear too keen to do), should be part-owned collectively.
So, we should have some kind of Universal Basic Income, but it should come in the form of dividends derived from Universal Basic Ownership, eg a system something like all companies should be 30% owned by a Universal wellfare fund which everyone gets a share of.
I agree that we should stop paying people to do nothing: Right now that's the super-rich who might be getting another tax cut for Christmas.
We have so much idle capital that is currently only being used to take over the competition rather than for innovation and investment. Am I alone in seeing the general public and local communities have more of a stake in what infrastructure and things we need, and should be more economically involved?
I think you have the wrong concept in your head. You've missed other portions of the larger economic system, by focusing on an individual atomic result as a platonic hypothesis of personal meaning. The presumed psychological effect, rather than broader the aggregate realities.
As easily as one might complain of rewarding mediocrity and paying into an unredeeming, bottomless void that bears no fruit, another might complain that a civilization founded on the threat of starvation and death by exposure isn't very civilized at all.
Take these two extremes on their own, and it's pretty easy to understand that a wide, ignored middle-ground exists, that rhetoric neglects. On one hand, a person is met by an offer to participate in society, in exchange for the obvious benefits society has to offer. On the other hand, stepping off the treadmill for too long risks permanent demotion, and a life sentence of perhaps animalistic subsistence, pan-handling, living off stolen cat food in a shanty town under a bridge, or worse, maybe suicide and unspoken realities in between.
I always though that as long as the US has a social program, it should be CC style (although there is also an argument for something like Teach for America, a 6'4 50 year old lumberjack might help prevent unruly classes), because (and here I cannot help but sound insanely old) making something gives you a certain amount of pride that helps you in many ways - you can be an ex drug addict who is trying to get permission to just see the kids just once a week, but you build that cabin, or cleaned that grassy knoll, or fixed that fence, or whatever.
Making something that objectively makes your country a better place, beyond just building a little cabin, might given you some sense of pride & stake/ownership in your country, as well.
Could you elaborate on what you mean by "CC Style?" You make a lot of sense with this post. Even UBI will not replace the human drive or need to create or feel satisfaction, and people will pursue that in healthier ways in their Survival Mode is taken care of (imho).
Money is useless without power.
I think all this talk of BI in isolation hides the socio-political dimensions.
The problems you describe are a result of market forces. The ability to do something about it is vested in a political system. Throwing money around won’t solve that.
I would argue that people without money lack power and are pretty much excluded from the political system. They often live in areas where the state level policies are making it difficult to vote (shorter voting hours, fewer polling places, more documentation requirements). Giving them income provides them the ability to become more involved.
Great point; a lot of the infrastructure we are so proud of on both sides of the aisle, was built back then. We generally agree we need to invest in infrastructure, too.
So will most of the Baby Boomers. A 20 year economic plan that gets through a major demographic shift which then needs a new plan anyway sounds pretty good to me.
One way to look at it is that people wouldn't, in fact, be paid to do nothing. They would be paid for the valuable service they provide; using their knowledge and experience to select products and services.
For the most part the poor in the USA already can get access to food stamps, medicaid, section 8 and a number of other programs that provide a safety net - especially if there are dependents in the household. For the middle class a reduced income tax rate would be much more effective than a UBI when it comes to saving money and having more for personal spending. The idea of giving a UBI to the rich strikes me as a bit of a stretch. Again paying people not to work while the rich continue to amass more wealth due to technology and capitalization seems to me a great way to create a permanent under class. The idea that government printing money to "take care of its people" strikes me as a naive experiment in socialism that is bound to fail.
They're already on it. (Sad to say. 20 Trillion national debt, and climbing.)
How 'bout taking some of that fresh money to set up a new department of Federal officers who drive around and break windows? Think of all the business that would generate! That would really boost the economy.
One serious question though: since the Federal government is printing all the money they need, why should they collect income taxes? If we're going to ignore fundamental economic consequences, what's a little more fresh ink? Let's just party 'till the walls fall in, right? (A: it's all fun and games until the velocity of that money increases and hyperinflation comes calling.)
Printing money doesn't necessarily increase the debt, it depends on who that money is being loaned to. It could actually reduce the debt relative to GDP via inflation.
Outside of the "how to pay for it" question (which has never been addressed beyond vague "tax the rich" promises) there's another problem: how to save people from themselves. One could think of this as an annuity, and try to cash it in for total cash value today (e.g. lump sum payment): get $200k today, and sign over the rest of the checks you get for life. Then what do you do with bankrupt folks? Sorry, you had your chance, now you starve in the streets? Of course not -- so you still need another safety net for those people.
> Then what do you do with bankrupt folks? Sorry, you had your chance, now you starve in the streets?
The institution of bankruptcy already answers, in general outline, the question of what to do with bankrupt folks: in short, cancel debts that aren't payable without excessive hardship. UBI should obviously be payable only to the beneficiary (except in the case of legal incapacity), who might contract to pay an equal amount to someone else, but such a contractual liability would be as subject to cancellation in bankruptcy as any other debt.
How would BI work with immigration? I could see that creating a lot of social problems if immigrants are percieved to consume more in BI than they contribute in taxes.
Readit News
- Effect on crime
- Effect on drug addiction
- Effect on family outcomes
- Effect on education opportunities
I'd gladly pay more taxes if I could draw a direct link between UBI and a safer, happier society.
https://en.wikipedia.org/wiki/Mincome
Currently it sounds like a blood from a stone situation: no one has any money, so requiring the park to install a sanitation system would simply cause it to file bankruptcy, likely with no change of any kind.
[0]: https://news.ycombinator.com/item?id=15179440
What you're describing is a special case of the exact sort of inflation that critics are afraid of (more money for tenants across the board just means more money that rentiers can extract).
If the argument is "we could use tax money (via a stipend to citizens, and then extracted as rent) to implement a law that required a trailer park to provide a functioning sewage system", then the easiest and most efficient way to do that would be use tax money to provide a functioning sewage system.
If, today, the trailer park owner is not required to provide adequate sanitation (which strikes me as heinous btw), why would UBI change that? Either the state couldn't care less or their are laws that are being flouted. Either way, it's not clear why a change in distribution methodology would change either.
The bit of your argument that I completely agree would occur is that the trailer park owner will charge the renters more. That's pretty much a given. Whether or not the renters will receive anything for that rent change is likely to be an orthogonal question.
My concern with UBI isn't that it won't work. It's that it's a right winger's wet dream.
I mean, imagine. With a great fanfare of fairness, we give everyone $x00/month. Dismantle all the means tested benefits for pensioners, disabled etc. Then watch as successive governments either ratchet it up or ratchet it down depending on their persuasion and the state of the economy. And as a target for when things get tight, it's a bloody big one.
The only really meaningful change from the status quo would be that the the truly disadvantaged would get royally stiffed.
There have been some studies, and from my recollection the takeaway is that most people, once their basic needs are met, strive to actually do something "useful". People on average do not become drug-addled sloths.
For many reasons it is difficult to do a comprehensive, long term study on this idea. The first, of course, is the cost. People or organizations with the money to spend on research tend to be motivated by profit, and thus far we've been taught (incorrectly, I would argue) that giving things away doesn't result in having more for yourself.
Because it's a huge change to society and it might have unexpected consequences. I feel this way, even being on the pro BI side.
GDP isn't everything. I can't say it better than Kennedy: https://www.youtube.com/watch?v=77IdKFqXbUY
250m[1] * $1000 * 8 * 12 = $24,000,000,000,000
1. http://datacenter.kidscount.org/data/tables/99-total-populat...
When it's all said and done, having a $1000/m basic income would be little different than increasing the minimum wage by the same amount.
If you use that to replace means-tested aid, you get rid of the management overhead.
And, maybe, if the US cuts costs for the military, making them build roads and schools instead of bombing them, you'll realize you really didn't need to spend that much in the military anyway...
There is also an important point in terms of opportunities lost due to low surplus. As you reduce the pressure on the poor, they will end up making better decisions (http://thepsychreport.com/research-application/featured-rese...) with better overall outcomes.
Right; that is, whichever economy those rich folks choose to call home. :)
250m * 1000 * 12 = $3 trillion.
It's sort of like when you say "NAFTA grows the US economy but $1 trillion" and the guy who's job was outsourced to Mexico ask "Okay, but how does that help me make rent or buy groceries for my family?"?
Basic Income (and other welfare schemes) are like that too, except for the rich. They're absolutely worse off if the economy grows 10% but their personal wealth and income declines by 20%.
Personally I'm a fan of UBI, but I sell it as (1) welfare is the right thing to do, and (2) UBI is the most efficient way to do it.
I'd probably start with something less than $1,000/month though. I'd offer a package deal to employers and the rich that looks like this: the government will pay healthcare costs and provide $500/month to each adult and $250/month for each child, and in return we abolish the minimum wage.
Someone's wage has an absolute ceiling at the level of "this is how much value I produce per hour". No one will hire you for more than that. And currently, there are some people who cannot be hired at minimum wage.
A UBI (and national health insurance) would help a lot with wages though. With less fear of losing their job, employees would have more bargaining power. They'd also have more resources to spend on commuting or time off work for interviews. By expanding the number of potential employers a person has access to, you indirectly allow them to bargain for higher wages, even without explicitly setting a minimum wage.
If someone wants to work for $1 / hour and someone else wants to hire them for $1 / hour... what right does a third party have to prevent them from doing business with each other?
Especially in leafless winter, the sheer uglyness of this swath of in-disrepair America is almost shocking.
Abandoned factories and houses. Lifeless downtowns. Trash along the tracks. Non-sweet graffiti.
Paying people to do nothing when there is so much to be done seems crazy to me. It's not like we have figured out how to solve these problems with AI or robots yet.
I could listen to an argument for paying people to participate in FDR-style public works programs. Building a bicycle lane network. Planting flowerbeds. Demolition and recycling and then re-urbanization or re-forestation of those crumbling factory grounds. And so many more things that would make this a better place to exist.
Some of the things I have thought about when considering BI have been, is it really "nothing" we are paying for? Lets say you're living in a neighborhood without any jobs available, and without jobs and property taxes your educational infrastructure is lacking, and without a job in the first place your mobility is lacking. However you do find employment in selling illegal drugs, the market is wide spread, the risk is low for the street level dealers. Now into that market your provide a basic income for the youth who can now pursue their interests without participating in some form of underground economy. Can you see paying people to not participate in that economy?
When I think about BI I have come to think about removing worry rather than paying for 'nothing'. IF you look at income disparity versus economic efficiency, economies grow when there is incentive to get ahead but they begin to contract once that disparity exceeds a threshold. If the bottom of the economy is worried about where they are going to sleep and eat tonight, they aren't very efficient or contributory to the overall GDP, if the top end of the economy is keeping all of its wealth bottled up in trading games with other top end users, it isn't contributing to the overall GDP either.
If you force disparity to zero, you essentially get communism, if you leave disparity unconstrained forever you appear to get monarchistic type trapped wealth. If you change the rules of the game so that people can be wealthy or not, but the total difference between maximum wealth and minimum wealth is constrained to 2 orders of magnitude rather than 4. Perhaps you get a better system overall.
I'm with the parent comment. There is so much work to be done in this world - we should first try to tackle those before taking the BI shortcut.
"And some projects aimed at reducing poaching by alleviating poverty have backfired, said Duffy. For example, one program in Ghana was intended to decrease poaching by paying a premium on crops, on the theory that hunter-poachers would focus instead on farming. They did for a period, but then used the money they’d earned to buy more sophisticated weapons that they used to shoot more lucrative species [1]."
Beyond that, everyone seems to ignore the inflationary nature of BI. What will happen to the economy in real, not nominal, terms?
[1] http://america.aljazeera.com/articles/2015/5/22/zambia-poach...
It would also move money back into these economies in a way that support some of the kinds of industrial district revitalization that you see in more urban areas nowadays.
All in all, the capitalist in me wants to say that you'll get better results if you just give people money and let them figure out how to dispose of it, rather than letting some government bureaucrat off in the state capital or wherever try to figure out how best to use the money. The latter option is worryingly similar to the root causes of the worst of the prosperity-destroying waste that went on in places like the Soviet Union. And I do think you'll see people (mostly) put the money they'd get from a basic income to good use. It's not like anyone enjoys living in a blighted town; it's just that they're living under economic conditions that leave them with little other choice, aside from maybe doing like I did and contributing to the blight by moving out of town.
I'm a fan of UBI in that I believe we have the ability to provide everyone with the basic necessities of life, and providing it without demeaning means-testing and the attendant labelling and stigma seems the right way to do it.
But I'm not a fan of only giving money. That money ultimately comes from the corporate economy, which owes a large debt to the common purse. For example, we pedestal google, amazon, etc, but they wouldn't exist without the DARPA (government) funding which created the internet, and even more basic research before that, law and order to protect it, education to allow people to even read it, a road network to allow it to spread, I could go on. And then there are what should be commonly-owned monopolies like land, radio spectrum, etc, etc. So I think corporations, rather than just paying this "common debt" in taxes (which they don't appear too keen to do), should be part-owned collectively.
So, we should have some kind of Universal Basic Income, but it should come in the form of dividends derived from Universal Basic Ownership, eg a system something like all companies should be 30% owned by a Universal wellfare fund which everyone gets a share of.
We have so much idle capital that is currently only being used to take over the competition rather than for innovation and investment. Am I alone in seeing the general public and local communities have more of a stake in what infrastructure and things we need, and should be more economically involved?
As easily as one might complain of rewarding mediocrity and paying into an unredeeming, bottomless void that bears no fruit, another might complain that a civilization founded on the threat of starvation and death by exposure isn't very civilized at all.
Take these two extremes on their own, and it's pretty easy to understand that a wide, ignored middle-ground exists, that rhetoric neglects. On one hand, a person is met by an offer to participate in society, in exchange for the obvious benefits society has to offer. On the other hand, stepping off the treadmill for too long risks permanent demotion, and a life sentence of perhaps animalistic subsistence, pan-handling, living off stolen cat food in a shanty town under a bridge, or worse, maybe suicide and unspoken realities in between.
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Printing trillions and trillions of dollars of money would increase the debt and increase GDP. Let's do that too!
[1] I'm actually European, but the ECB and the Federal Reserve are behaving in similar fashion, in this case.
How 'bout taking some of that fresh money to set up a new department of Federal officers who drive around and break windows? Think of all the business that would generate! That would really boost the economy.
One serious question though: since the Federal government is printing all the money they need, why should they collect income taxes? If we're going to ignore fundamental economic consequences, what's a little more fresh ink? Let's just party 'till the walls fall in, right? (A: it's all fun and games until the velocity of that money increases and hyperinflation comes calling.)
The institution of bankruptcy already answers, in general outline, the question of what to do with bankrupt folks: in short, cancel debts that aren't payable without excessive hardship. UBI should obviously be payable only to the beneficiary (except in the case of legal incapacity), who might contract to pay an equal amount to someone else, but such a contractual liability would be as subject to cancellation in bankruptcy as any other debt.