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Finland launches trial program to pay unemployed citizens a basic monthly income

202 points by breitling 10y ago

dudul 10y ago
Why limit the experiment to unemployed people? It would be interesting to see what people already earning a living do when receiving this no-strings-attached income.
- aswanson 10y ago
  Econ 101 predicts....inflation.
  - flukus 10y ago
    Most people working full time would have their taxes adjusted so it made little difference.
- grecy 10y ago
  Australia has some of the most liberal welfare payments in the world - anyone that isn't earning much (or doesn't have a job, or has never had one) can get around $250 per week. Forever. Very few strings attached. More money if you have kids, etc. It's known there are tens of thousands (hundreds? millions?) of people who just don't want to work and sit around on it for their entire lives. A few friends did it for a decade after highschool, just surfed all day every day. Despite all the naysayers and doomsayers about this kind of thing, Australia's economy and workforce is perfectly healthy, and has been this way for decades....
  - davidlumley 10y ago
    > anyone that isn't earning much (or doesn't have a job, or has never had one) can get around $250 per week. Forever. Very few strings attached. Sorry but that's just flat out incorrect. The maximum payment possible is $528 a fortnight through Newstart (not available to everyone, and only available for 6 months). See https://www.humanservices.gov.au/customer/services/centrelink/newstart-allowance https://www.humanservices.gov.au/customer/services/centrelin... for more information. $528 a fortnight equates to $13,728 annually (so you're going to get less than this, because you can only get it for 6 months) in a nation where the _median_ income is over $80,000 AUD. What little you get is going to be spent on rent, food, and going to and from interviews (which are a requirement of you getting NewStart). > It's known there are tens of thousands (hundreds? millions?) of people who just don't want to work and sit around on it for their entire lives. Dole bludgers are _few_ and far between. What you're seeing is people doing nothing because they literally cannot afford to do anything, even if they're getting the maximum payment (and it's likely they're not). Welfare in Australia could be a lot better, and I'd be interested to find out how a UBI could affect the process as Centrelink (the welfare department) is incredibly inefficient.
    - grecy 10y ago
      > Sorry but that's just flat out incorrect Have you been on the dole? I was on it between jobs, and my brother was just on it for a year while he rode a bike around Tasmania, then volunteered at the circus in Perth. It's very do-able. Obviously you're not owning an iPhone and driving a new Commodore, but if you're willing to have a few roommates and eat 2 minute noodles from time to time, it's an easy life.
      - davidlumley 10y ago
        No. I looked into it at one stage between jobs but didn't qualify for it because I had savings. I've had numerous friends who have been on and off various forms over the past 10 years though. I'm not implying it's not do-able, but it's definitely not the same as having a job that pays even 30k AUD a year. How comfortable you're going to be also depends on where you live naturally, as renting a room in Brisbane is about ~$120 a week minimum. Melbourne is more expensive and Sydney same again.
  - nickfromseattle 10y ago
    Australia has an extremely high cost of living, $1,000/month doesn't seem high enough to cover the cost of rent, food and a cell phone, let alone enjoy a surfers lifestyle.
    - asdfaoeu 10y ago
      I assume by surfers lifestyle he doesn't mean a beachfront property in Manly.
    - tomjakubowski 10y ago
      Is the cost of living still that high outside of urban areas? And remember: there are 4 weeks and some change in the average month, so more like $1083/mo. Not that that's much more :)
    - giancarlostoro 10y ago
      I imagine some people could have roommates with either real jobs, or the same source of income, would help reduce costs. Others could live with their families and save their money for when they need it most. But I guess if you're by yourself that would kind of not be enough, but if you can still get that welfare check plus a part time job, it may just be enough.
    - grecy 10y ago
      > doesn't seem high enough to cover the cost Evidence proves otherwise. I know people who are doing it right now. Nobody needs a cell phone when they're just surfing every day anyway....
  - inopinatus 10y ago
    That is an exceptionally positive review of Australia's economic position. By contrast can I point out that Australia has a high basic cost of living, colossal levels of private debt, an epidemic of obesity, an ongoing productivity crisis that was only temporarily masked by a resources boom, and a demographic inversion just around the corner that is likely to a) overwhelm the healthcare system and b) elect ever more conservative governments that will stifle immigration at exactly the time it is most needed.
    - tomlock 10y ago
      I'm not sure there are many nations in a better position. Could you provide some examples of countries that are?
    - confounded 10y ago
      They also have the highest median individual wealth in the world.
    - fratlas 10y ago
      Could you elaborate on the 'demographic inversion' that's incoming?
      - chiaro 10y ago
        Baby boomers exiting the workforce, along with lower birth rates (and some increasing anti-immigrant sentiment that curtails the normal set of solutions) will lead to issues with healthcare affordability and end of life care. But these are issues that all Western countries are dealing with, and I have no reason to believe that Australia would be harder hit than many others due in part to the success of our mandatory saving schemes.
        elyobo 10y ago
        The success of the mandatory saving schemes will probably work for a while, but the current property crisis in Australia is going to put an end to that eventually. Give it another 30 or 40 years once the non-boomers that have been unable to buy a place to live (and have therefore being paying rent their whole lives and will continue to do so in retirement) and there will be an even worse crisis.
  - ajdlinux 10y ago
    "Very few strings attached" Have you ever actually dealt with Centrelink?
    - grecy 10y ago
      Sure have. I was on the dole between jobs, and my brother was just on it for a year while he rode a bike around Tasmania, then volunteered the circus in Perth :)
      - ajdlinux 10y ago
        How many decades ago was that? Because I can guarantee you, as someone who spent 8 years on Centrelink payments (for study, not unemployment, which is even worse) that it is most definitely not no-strings-attached.
        grecy 10y ago
        For my brother it was mid 2015 to mid 2016. I was also on center link payments for study.
  - sjwright 10y ago
    And I suspect that if people didn't lose the $250 per week if they get a job, more people would get jobs, even if it were just casual or occasional work... Losing the benefit when employed is a massive disincentive.
  - flukus 10y ago
    > Very few strings attached 20 Years ago maybe, now there are so many strings no one knows what to expect from centerlink. My mum has to get a doctors certificate every year to prove that my sister is still down syndrome. I doubt she's going to grow out of that extra chromosome.
  - apatters 10y ago
    Australia also has an entire continent's worth of natural resources and a population of 25M people. Of course when you can pull money out of the ground hand over fist you can afford to spread a little of it around in the form of generous welfare and social services. It is a classic resource economy, helicopters of money everywhere during the boom years, take on debt during the bust years, cycle repeats.
- ams6110 10y ago
  The people already earning a living are the ones paying for it. You'd be taking their own money from them only to give it back, less overhead.
  - AnthonyMouse 10y ago
    > The people already earning a living are the ones paying for it. You'd be taking their own money from them only to give it back, less overhead. The way means-tested welfare works is that there is e.g. a 20% tax and then people are given some benefits but the benefits are taken away very quickly, e.g. you lose 70 cents in benefits for every dollar of income. It means that low income people are effectively paying a 70% marginal tax rate while the rich pay 20%, which means there is a much lower incentive for the poor to make some more money. Especially when making more money can also cost more in expenses like transportation and child care, which can eat more than the part the government didn't take. The way a universal basic income works is that there is a somewhat higher nominal tax rate, e.g. 30%, but everyone gets the benefits unconditionally (and in cash, so less bureaucracy), so everyone has the same marginal tax rate. Which reduces the disincentive to work of means-tested welfare. You can still have any effective tax rate you like at a given income level, by choosing the amount of the basic income and the nominal tax rate.
- schemathings 10y ago
  I've wondered the same thing about WIC/Food stamps. What if everyone had a card for $x worth of food per month?
  - AtheistOfFail 10y ago
    Republicans would have a heart attack, a stroke and a brain aneurysm at the same time.
    - 3825 10y ago
      I for one would love this idea even if it means we can only give a fraction of what we give now. My rationale is that if everyone gets the same amount regardless of income or race or whatever then the phony dogwhistlers (which is all that Reagan ever was) would have less of a stranglehold on the people. I think it would bring people together and it would encourage compassion.
- fulafel 10y ago
  Since it's designed to study the disincentives to work, by the end of the study it's likely to include many employed people. But true, it would be a better experimental setup to include all kinds of initial circumstances in the study population.
  - dispose13432 10y ago
    >Since it's designed to study the disincentives to work, by the end of the study it's likely to include many employed people. On the other hand, people realize that UBI may go away any day. What will be when canceling UBI has as much chance as canceling Minimum wage?
    - sjwright 10y ago
      One would hope that the participants have been given a long term guarantee that this program will apply to them, perhaps 5 or 10 years. Without the guarantee, the results would be unreliable.
- headcanon 10y ago
  > Those chosen will receive 560 euros every month, with no reporting requirements on how they spend it. The amount will be deducted from any benefits they already receive. It looks like they're doing it in a way that doesn't cost anything - its just a reshuffling of the current benefits.
thescribe 10y ago
I'm very interested in this. My own intuition says basic income won't work, but it'd sure be nice if it did.
- deleted 10y ago
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- quickben 10y ago
  Eh, 30% of all income is capital gains income, so passive income does work for the top 1% without problems.
  - cperciva 10y ago
    The majority of capital income flows not to the super-rich, but rather to the pensions of the upper-middle-class. Also, most income earned by the top 1% of income earners is employment income; many professionals (doctors / dentists / engineers / lawyers / accountants) fall into that top 1% of incomes. The working-age individuals whose income is primarily from capital are generally in the top 0.1%.
    - ragazzina 10y ago
      > Also, most income earned by the top 1% of income earners is employment income; many professionals (doctors / dentists / engineers / lawyers / accountants) fall into that top 1% of incomes. I am not American and I don't know if doctors and lawyers are usually considered 1 percenters, but Wikipedia says "Data on the minimum yearly income to be considered among the 1% vary per source, ranging from about $500,000 to $1.3 million."[1] It is my understanding that half a million dollar is not a common engineer or doctor income, I am not sure most income earned by 1 percenters is employment income. [1] https://en.wikipedia.org/wiki/We_are_the_99%25 https://en.wikipedia.org/wiki/We_are_the_99%25
    - filoeleven 10y ago
      You're right that the majority of capital income does not go to the super-rich, however they do get a very large slice of the pie nonetheless: > In 2015, according to PSZ, the richest 1% of people in America received 20.2% of all the income in the nation. Ten points of that 20.2% came from equity income, net interest, housing rents, and the capital component of mixed income. Which is to say, 10% of all national income is paid out to the 1% as capital income. > Even if you exclude the capital component of mixed income (since it is connected to work even if the income is not from labor) and housing rents (since these are imputed to homeowners rather than paid to them as cash), that still means that, from equity income and interest alone, the top 1% receives 7.5% of the national income without having to work for it. Put another way: the average person in the top 1% receives a UBI equal to 7.5 times the average income in the country. That last line is key. Even if most of the income of the 1% is not passive, they still receive a massive amount of passive income. Source: https://medium.com/@MattBruenig/the-ubi-already-exists-for-the-1-d3a49fad0580#.qkob80xzc https://medium.com/@MattBruenig/the-ubi-already-exists-for-t...
Nition 10y ago
The New Zealand Treasury did a basic analysis on a Guaranteed Minimum Income a while ago (2010) that's a good read, with a lot of actual numbers crunched: http://igps.victoria.ac.nz/WelfareWorkingGroup/Downloads/Working%20papers/Treasury-A-Guaranteed-Minimum-Income-for-New-Zealand%20.PDF http://igps.victoria.ac.nz/WelfareWorkingGroup/Downloads/Wor...
- TheSpiceIsLife 10y ago
  For those of us too lazy to click a link, would you mind providing a summary or a few dot-points of interest.
  - gallerdude 10y ago
    From a table within the source: Benefits:  More equal distribution of income  Removes disincentive for beneficiaries to undertake part-time work  Poverty is reduced but only at the 60 and 70 percent relative levels (2, 2A)  May improve labour market outcomes in some areas: more employee flexibility; encourages unpaid work; additional employee bargaining power; encourages entrepreneurial activity; and reduces the opportunity cost of full time training or education.  Lowers administrative, management and operating costs Costs:  Poverty is either increased across all relative levels as Superannuitants have their payment decreased by 44% on average (1), or is increased when measured at the 50 percent relative level (2, 2A).  Horizontal equity problems due to differential treatment of one and two parent families  Many current beneficiaries (e.g. sole parents, the disabled and carers) will be financially worse off under the scheme  Reduces the supply of labour: decreases hours worked; increases migration of skilled workers; discourages people from taking entry level jobs; discourages further education and training; and the EMTRs for families with children are very high discouraging further work, MFTC (1, 2).  High personal income taxes have negative implications for saving, investment and productivity  Lowers economic growth (estimated at 2.8 percentage points per year)  Non-alignment causes integrity and coherence issues for the tax system
    - disordinary 10y ago
      It's interesting that they think it will be a disincentive to work, $300 is less than the benefit now when you include the accommodation supplement and quite a lot less if you include training incentive allowance, emergency cash, food allowances, etc. Yet people still work. I wonder if it would actually be the opposite, with people being able to work legitimately rather than under the table to supplement their income (and not have to fake ACC injuries).
sean_patel 10y ago
As humans, we are inherently Lazy. What's the incentive to start looking for work if there are no strings attached on how you can spend money? Is Finland the only country in the world that has 0 junkies, 0 prescription addicts, 0 dads paying child support? I agree with @aswanson, this is headed for inflation, or an even worse financial disaster. Side Note: Is it easy to immigrate to and naturalize as a Citizen? I'm buying my ticket.
- ashark 10y ago
  > What's the incentive to start looking for work if there are no strings attached on how you can spend money? More money? > I agree with @aswanson, this is headed for inflation, or an even worse financial disaster. Why would distributing money per se cause inflation? Does inflation go up any time money goes from one entity to several?
  - hamandcheese 10y ago
    I think the inflation argument is that distributing more dollars would mean more buying power overall, increasing demand, and therefore cost of living increases. That only makes sense when supply is inelastic, which is not a valid assumption, imo. I can imagine certain things, though, like housing, might be more successful as extracting additional rent from across the board income bumps.
    - cperciva 10y ago
      That only makes sense when supply is inelastic, which is not a valid assumption, imo. No, it makes sense whenever supply is not perfectly elastic. And time scales matter -- most supplies are inelastic over the short term but elastic over the long term, so "helicopter money" will tend to produce a short-term spike in prices due to more money chasing a limited supply, which then levels off at different rates depending on the goods as the supply catches up.
  - cperciva 10y ago
    Why would distributing money per se cause inflation? So-called "helicopter money" is very good at inducing inflation, because it shifts the equilibrium between "holding money" and "buying stuff". This is the principle behind quantitative easing. But basic income isn't simply a matter of distributing money; the money also has to come from somewhere, and raising taxes (or cutting spending elsewhere) in order to fund BI has a disinflationary effect. That said, the inflationary and disinflationary effects are likely to not apply equally across all goods; if you raise income taxes in order to fund a basic income system, you'll likely see increased inflation on low-end goods (since the people who purchase them have more money to spend) and decreased inflation on high-end goods (since the people who purchase those have less money to spend).
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chunsj 10y ago
Basic income is not free money, it's redistribution so that every people can live humane life.
- johnnyg 10y ago
  Money comes from value and value comes from somewhere. If you receive a redistribution, you've not created value but you've received it. That's "free money". And remember friends, TANSTAAFL.
  - AaronFriel 10y ago
    There are plenty of free lunches, they're called externalities, free rider problems, etc., etc. For a maxim held by so many who flirt with economics, it's strange that so much of the field is explicitly about determining where the free lunches are.
    - closeparen 10y ago
      The point of TANSTAAFL isn't that you'll never eat for free. It's that someone pays for your lunch. In an externality, someone pays for your lunch involuntarily.
      - AaronFriel 10y ago
        And I don't think that makes it any more relevant as a maxim here. Social safety nets, welfare, and UBI are all giving lunches to people. Sometimes they produce net benefits, sometimes not. Throwing in TANSTAAFL doesn't add anything to the discussion.
        closeparen 10y ago
        UBI represents a massive increase in the level of redistribution proposed, so it's important to remember that it is redistribution and the money will have to come from somewhere.
    - 10y ago
dispose13432 10y ago
1. $587 a month in many cities in the US will barely rent a room. Even in St. Louis (https://www.rentjungle.com/average-rent-in-st-louis-rent-trends/ https://www.rentjungle.com/average-rent-in-st-louis-rent-tre... ), average monthly rent for a one bedroom apartment is $1000 a month. In LA, it's over 2000 a month, in NY it's 2700, in Detroit it's at 1000. SNAP (Food stamps) give about $255 a month. That means that out of UBI, about $300 is left over for rent. 2. If everyone in the US gets $587 a month, that's 1.5 trillion a year. The current US federal budget is 3.8 trillion. That's about a quarter of current US federal budget, and we still have to give an actual livable stipend to the truly poor (SNAP, section 8, medicare), some kind of defense, leave some for state/city tax, federal infrastructure programs (freeways/trains).
- gokhan 10y ago
  > That's about a quarter of current US federal budget Only some will be given free money, and almost all of them will be spent since receivers are poor and cannot save it, would be quite a boost to the economy. It's a very direct way of implementing Keynesian policies.
  - dispose13432 10y ago
    >Only some will be given free money, I thought the idea is that everyone from Bill Gates to the beggar will be given it?
    - flukus 10y ago
      And most will have their taxes adjusted so that it makes no difference to the governments bottom line.
      - dispose13432 10y ago
        I'm saying that taxes will go through the nose (close to 25%) for everyone with quite questionable benefits (will barely pay for rent).
    - 10y ago
known 10y ago
Good initiative since 1% have 99% wealth http://www.bbc.com/news/business-35339475 http://www.bbc.com/news/business-35339475
- cperciva 10y ago
  That article actually says that the top 1% have 50% of the net wealth. But "net wealth" is a really weird statistic. The top 20% of the world has somewhere around 125% of the world's net wealth, because many people are in debt.
jasonmclaren 10y ago
The HN headline ("Free money for all") is a bit misleading. The article states that the basic income will only be given to 2000 randomly selected unemployed people.
- grzm 10y ago
  Source title: "Finland launches basic income experiment with Jan. 1 cheques for those in pilot project" Suggested title: "Finland launches basic income experiment with 2000-person pilot project"
- cperciva 10y ago
  2000 randomly selected unemployed people That's how they're selecting the participants for the trial; but continuing to be unemployed is not a requirement for receiving the $587. (Indeed, this is the whole point: They want to see if the existing system of unemployment benefits is creating a disincentive to finding work.)
- ge96 10y ago
  Definitely not click bait
- dang 10y ago
  Yes. We changed it to a shortened version of the article title. Submitters: the HN guidelines ask you to use the original article title, unless it is misleading or linkbait. (Submitted title was 'Free money for all: Finland launches basic income experiment with Jan. 1 cheques').
Tick2Time 10y ago
Basic Income is another failed Utopiasm and it depresses me that seemingly intelligent people are falling for its populist simplicities. But this is the age of Trump so I should expect no less.
- philliphaydon 10y ago
  Comment is strange considering the only other candidate was no better of a choice.
- flukus 10y ago
  > failed Utopiasm How can it be failed when it's never been implemented?
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avenoir 10y ago
Could somebody living in Finland comment on what 560 euros per month will get you? Edit: Looking at some stats here [1] and it looks like 565 euros is enough to rent an apartment outside of city center. It also looks like one could potentially find something for 450 which leaves pretty decent money for food and perhaps a bicycle for transportation? Definitely not enough if you consider utilities though. That's some rough living. [1] https://www.numbeo.com/cost-of-living/country_result.jsp?country=Finland https://www.numbeo.com/cost-of-living/country_result.jsp?cou...
- 1rs 10y ago
  That's about right. To live in Helsinki you'd probabaly need minimum 1000€ for a shared Apartment and food... With 560€ you might be able to live somewhere and scrape by.
  - lastyearman 10y ago
    This is outside of Helsinki but student benefit is 460e per month and I know many who can live without taking on debt or working part time. Also If you manage to buy a (small) condo, the interest is basically below zero right now, so 560e could easily cover basic expenses.
    - Jommi 10y ago
      Student benefit is not 460e per month. In Helsinki Metropolitan area is is 315e student aid + 200e housing aid ( + possibility for student priced housing and other student priced amenities)
- kisstheblade 10y ago
  It's possible to live with that amount (because schools and health care are basically free), but it wouldn't be nice of course. Note that this doesn't really "cost" anything as the people in the program are already receiving generous unemployment benefits, " The amount will be deducted from any benefits they already receive." So the difference mainly is that you don't have to ask for this money or report it if you start to earn money. I wonder how your other benefits are affected though (child support, living expenses like rent and utilities etc.) if you indeed get a job. The bureaucracy is a nightmare here with unemployment benefits, so hopefully something good will come out of this project.
hydandata 10y ago
This is wholeheartedly welcome, lets hope 2017 brings more news like this. Not at all surprised that it is being done in Finland.
apatters 10y ago
The largest concerns about basic income are that it will reduce the incentive to work for at least some people, and that it is phenomenally expensive. Why not solve both problems by simply eliminating income tax on lower income brackets instead? This is cheaper, easier to implement and less politically contentious (we already embrace the notion of progressive taxes, and who doesn't like a tax cut?). It also gives the money directly to those who need it most. I suspect many people support basic income because they fundamentally believe in a world where you shouldn't have to work to make a living. They use arguments like helping the poor, or putting everyone on an even playing field, or the claim that tech will eventually destroy jobs anyway as Trojan horses for this agenda. I don't agree and I think most people would disapprove of basic income if you told them that it was intended to undermine the culture of working and earning to make your own living. If you really want to help the poor and the working class, support the elimination of income tax on the lower income brackets instead of basic income. It is a simpler, better, cheaper, and less divisive solution.
- Gustomaximus 10y ago
  Have you seen the concept of a negative tax rate? It's similar but geared to provide money to those that have lower earnings. Interesting concept like UBI. https://en.wikipedia.org/wiki/Negative_income_tax https://en.wikipedia.org/wiki/Negative_income_tax
  - ThomPete 10y ago
    Only problem with that is that it doesn't get rid of the bureaucracy which is one of the very reasons UBI has been proposed. On another note I don't understand why the word Universal is being used. The point is that it's unconditional compared to the conditional version of something like Negative Income Tax.
- jclulow 10y ago
  You can't give people a tax break if they earn literally nothing. There isn't necessarily an economically sensible job for every single person, and it seems ridiculous to invent bullshit or demeaning jobs just so that people can work to eat. I reject the idea that working any deadend awful job just to get by is somehow virtuous. I love what I do, and I would do it even if I didn't need to work -- but being able to say that is an extremely privileged position to be in. We're automating away industry after industry. There already aren't enough jobs to go around, and that will only get worse from here on out. I have no idea what the future should look like, but we have to start by accepting that the value of working at a job to feed yourself is not irreducible or axiomatic.
NurAzhar 10y ago
in Singapore the unemployed can get up to $500 per year LoL is this a form of basic income
osmala 10y ago
This basic income experiment has plenty of flaws. Many people get DOUBLE that from government as benefits anyway, so the premise of that experiment is flawed. The disintensives for smallish amount of work still continue. Finland has additional benefits for rent, additional benefits for supported children and increases to standard unemployment benefits for having to support children. This isn't really the basic income as most people understand it. It really doesn't replace benefits bureaucracy with something more streamlined that deals away with disincentives. By disintensives I mean the situation in which reduction of benefits and cost of getting to work eat the salary and there is almost nothing left from the work if its a part time job.
- metafunctor 10y ago
  This is not a basic income experiment. This is an experiment to redefine and simplify unemployment benefits. Specifically, this experiment eliminates (much of) the problem that earning a few hundred euros will cut your unemployment benefits by the same amount. It allows people to take part-time jobs without being penalized. It's not perfect for the reasons you give and more, but it might be significantly better than what is currently in place. The premise that one can find some universal income amount X and do away with all other types of benefits is a pipe dream anyway. For some, X will be enough to scrape by. For others, X will not be enough for their medical care necessary to survive for two weeks. There will always be a need for some extra needs-based benefits.
  - powmonk 10y ago
    I just wish it would stop being touted as a basic income experiment. It's not even close.
    - alkonaut 10y ago
      Any experiment that changes benefits to be unconditional whereas they used to be withdrawn if you get a job, will provide very useful insight into peoples behavior under a basic income experiment. That is why this a useful basic income experiment - regardless of whether the program itself is classified as basic income in its current form or not.
ge96 10y ago
Haha lucky, seems like one of those "idealized situations" If we automated everything, where does money/value come from. I still don't completely understand how money works "it's a ledger, faith, gateway of energy" a doctor is worth more than a janitor (not arguing that) Just when there are no skills involved, everyone's the same, would money still have a purpose. Though I like the idea of basic income. I wouldn't mind that myself and I could remove the fear of being homeless from my mind and focus more on web development.
- chaosagent 10y ago
  https://en.wikipedia.org/wiki/Post-scarcity_economy https://en.wikipedia.org/wiki/Post-scarcity_economy
  - majewsky 10y ago
    When this is linked, I'd like to add this article about a concrete fiction of post-scarcity: https://medium.com/@RickWebb/the-economics-of-star-trek-29bab88d50 https://medium.com/@RickWebb/the-economics-of-star-trek-29ba...
  - ge96 10y ago
    I don't understand. Is post-scarcity good or bad? Scarcity seems to be the reason why anything has value.... No forget that I kind of forgot what I was going with that. What I did want to bring up is this argument of land vs. population and energy/raw materials. If energy is neither created or destroyed, it's just moved around, and assuming we still have the sun, if we're just using the energy from the sun through food, then as long as the sun exists, aren't we fine? Same with water. Water might be transformed but it returns. Where it would it go? There is also salt water sure you have to take energy/time to desalinate and purify it. I just don't get that argument of resources if you have an ineexhaustable supply of energy as the sun for 5 billion years. Also humans compared to the size of the Earth, we don't even begin to cover it as far as human size compared to land size eg. continents. Please correct me as I'd like to learn.
pmyjavec 10y ago
Well if valley types have their way and automate 40% or more of jobs in the next ten years, then what actually is the alternative? This or major uprisings and violent clashes?
- paulddraper 10y ago
  > automate 40% or more of jobs in the next ten years No scheme on earth could automate 40% of jobs in a decade. > what actually is the alternative As a proportion of total U.S. jobs, farming declined steadily 5% per decade from 1800 to 1970. Imagine telling a youth in 1900 that in his lifetime, 35% of the nation's jobs would disappear. People will have nothing to do!!
  - willvarfar 10y ago
    For a sense of what humans are capable of when motivated to work towards a common goal, look at the mass mobilization of the recent world wars. You may think it improbable, but surely you think it still possible?
  - ThomPete 10y ago
    Between 98-2004 the US lost 4 million jobs to the Chinese. In that same period the chinese lost 15 million jobs to automation. I don't think most people understand how fast this is going mostly because we work in the part that still benefit from this. When automated cars and truck become a reality then 12 million jobs in the us are in danger. Transportation being the one job that can't be outsourced to other countries (contrary to Europe) is the most common job in the US. Once that's gone so are their jobs. And can we please stop comparing to farming and the luddite fallacy they are completely missing the point of whats going on right now. Did the horses get new jobs when cars started taking over? Technology replaces jobs that require higher and higher levels of abstraction and while technology keeps improving humans only improve to the extent that technology allows them to. Also here is another good example of a huge manufactorer who is going to get rid of all their people. It's here faster than you think. http://www.theverge.com/2016/12/30/14128870/foxconn-robots-automation-apple-iphone-china-manufacturing http://www.theverge.com/2016/12/30/14128870/foxconn-robots-a...
known 10y ago
Causes for Economic inequality https://en.wikipedia.org/wiki/Economic_inequality#Causes https://en.wikipedia.org/wiki/Economic_inequality#Causes
duckingtest 10y ago
That's pretty pointless... it has absolutely nothing to do with basic income. It's a limited time stipend. The recipients' behavior would only be identical if they were so dumb as to not plan more than a month ahead.
nabla9 10y ago
Finland is one of the best places to adopt basic income. We already have comprehensive and complex welfare system that creates pockets where effective marginal tax rate is above 100% (going to work part time reduces welfare, net effect is negative). In the lowest income service industry almost half of workers would earn the same if they were unemployed. Fears of people not working if they get the same money without working seems to be false. There is already two groups of Finns that get kind of basic income. Underage children and old people. Underage children get unconditional sum of money (goes to parents of course). Old people have guaranteed small pension. This test has many faults, (its only for unemployed, basic income would be for everyone) but it's unconditional like basic income should be. People get the same amount of basic income even if they find work, or work only part time.
- ptaipale 10y ago
  On the other hand, there are about 213 000 officially unemployed and 140 000 "hidden unemployed" with an employed workforce of 2 413 000. Worse than that, the benefit dependency has now started to become intergenerational. About one fifth of Finnish young men (20-24) are "NEET" (Neither in employment nor in education or training). To exaggerate a bit, they don't mind living on benefits as they have enough for housing, food and computer games, or whatever they do. The problem with welfare system's pockets of >100% marginal tax are not only related to money in the long term. It's also that the payment of benefits is interrupted very quickly upon the employment office learning of someone getting any job (even temporary and part time) and resuming payments is slow. So although the money is evened out in the longer run, people who take a job tend to have short-term cash flow problems. They really suffer for taking a job, and that is wrong. BI would help in that, but as a long-term solution on population level the equation looks unsolvable.
  - nabla9 10y ago
    The biggest problem in Finnish welfare is pensions[1]. They are too high for babyboomer generation. Basic income would allow creation of something similar to mini-jobs in Germany but still giving people a choice. --- 1: Yes. Pensions in Finland are welfare. Pension fund savings cover only tiny percentage of pension. Young working people are paying sums much bigger than basic income to old people.
rmc 10y ago
I doubt they are actually giving cheques. It's only USA which still regularly uses cheques.
- grzm 10y ago
  Well, if we're going to be pendantic about it, the USA doesn't have cheques, either. The only check I currently write is for rent.
neilwilson 10y ago
This is fundamentally unemployment benefit paid to those out of work coupled with working tax credits paid to those in work. Nothing new to see here at all other than the elimination of the ridiculous requirement to look for jobs that don't exist - because there aren't enough jobs. Not enough jobs is still the issue, and nothing has been done to redress that. Nothing changes until the buyers market in labour is turned into a sellers market.
jfoldager 10y ago
> The scheme is part of the measures by the centre-right government of Prime Minister Juha Sipila to tackle Finland's joblessness problem. I like this is not even proposed by a leftist government. The Scandinavian left-right scale maps outside the political spectrum of many countries.
arjunbajaj 10y ago
I don't understand, how do governments plan to have a long term sustainable basic income for citizens when AI and other technological developments put a large percentage of people out of jobs?
- ensiferum 10y ago
  For example, tax the robot work equal to human work. But since the robots don't need money the salary paid to a robot is pooled to a "common bank account" and then distributed to humans according to some criteria by the goverment.
  - chongli 10y ago
    Robots won't replace humans on a one-for-one basis. One human could be replaced by a hundred tiny robots or a factory with a hundred workers might be replaced by a single big robot. We already have single robots that can do a task hundreds of times faster than a human so how do you tax them equally to human work?
    - vorotato 10y ago
      Tax them by their production. If one robot can do the labor of 40,000 surely it can pay for the people it displaced so they don't starve to death.
- notahacker 10y ago
  Probably the same as they dealt with it in every other decade of the past century that people worried about workforces disappearing overnight due to technological development, women entering new areas of the workforce, immigration and outsourcing: by paying unemployment benefit to people whose jobs were very gradually replaced and ignoring the doomsayers who insisted - despite all the evidence to the contrary - that in aggregate humanity wasn't ingenious enough to find new things that other people would pay them to do.
kilre 10y ago
I am wondering. If there would be a real basic income for all citizens. Wouldn't that simply lead to an increase in overall prices, so nothing would be gained?
alkonaut 10y ago
Note that this is an experiment to observe the behavior of those who are on unemployment benefits when they get unconditional benefits. It is not yet universal income, even on a small scale (as it is conditional on the current benefit status). Note that any "complete" welfare state more or less guarantees, that you will get X income (or at worst, incur a cost of X). Even if you refuse to work, society will make sure you aren't hungry. There is universal healthcare etc. So the money is already spent - a basic income only changes the dynamics by also offering it to those who work. Offering it to people who work might reduce the number of worked hours, which would be a positive effect (might create more jobs, improve health etc). It comes at an increased cost of course - but that can be offset by increasing income taxes. If money is distributed and taxes are not increased, then it is a form of stimulus. In that context, a Basic Income should be compared to central bank stimulus (artificially low interest rates etc). If you want to make absolutely sure that stimulus money ends up spent in the economy, as opposed to saved or transferred abroad etc - then a BI seems like a better idea.
- lintiness 10y ago
  "If you want to make absolutely sure that stimulus money ends up spent in the economy, as opposed to saved or transferred abroad etc" i read this all time around here. money "saved" is usually invested, and that too stimulates an economy -- and probably more meaningfully long-term.
  - kbart 10y ago
    So we can get another bubble? I prefer people spending money directly on goods they really need as opposed to shady deals by investment bankers.
  - marcosdumay 10y ago
    Reality is more complex than that. This is what most people are talking about when they talk about stimulating consumption: https://en.wikipedia.org/wiki/Keynesian_economics#Excessive_saving https://en.wikipedia.org/wiki/Keynesian_economics#Excessive_... It logically leads to the existence of an optimum rate of saving/spending and the requirement of some powerful actor to keep that rate near optimum. Notice that the math is flawless, but there are some issues with its meaning, so again, reality is more complex than that too.
jernfrost 10y ago
I don't see basic income working in its purest form but then again that is not what this is. This reminds me of the reforms done to the Norwegian pension system, which allows people to keep working after retirement without reduction in pension payments. This was to encourage people who are healthy to work longer than the standard 67 year retirement age. To my knowledge this has worked well in Norway, and so I suspect a similar change can work well for the unemployed. I think we are going down the wrong path with endless reports, and threats to get unemployed people back into the workplace. I think it would be better with stronger focus on positive encouragement. I won't claim to fully understand the theory of guaranteed basic income, but as it has been explained to me it seems inherently flawed in its purest form. The whole point of a welfare system is that members of society will occasionally experience dramatic situations which can get very costly, whether from unemployment, serious illness or accidents. That means sudden spikes in money requirements. A socialized system can handle that as those spikes are evened out over a large portion of people. But a universal pay is constant to my understanding and thus won't fluctuate with need. This all it can really solve is hindering people from lacking basic necessities like food, shelter and clothes. You can make a system which pays enough to handle every possible case unless you make the payment really high. A young healthy individual will require less basic income than a disabled person in a wheel chair with expensive medications and customized house and car.

202 points by breitling 10y ago

dudul 10y ago

Why limit the experiment to unemployed people? It would be interesting to see what people already earning a living do when receiving this no-strings-attached income.

aswanson 10y ago
Econ 101 predicts....inflation.
- flukus 10y ago
  Most people working full time would have their taxes adjusted so it made little difference.
grecy 10y ago
Australia has some of the most liberal welfare payments in the world - anyone that isn't earning much (or doesn't have a job, or has never had one) can get around $250 per week. Forever. Very few strings attached. More money if you have kids, etc. It's known there are tens of thousands (hundreds? millions?) of people who just don't want to work and sit around on it for their entire lives. A few friends did it for a decade after highschool, just surfed all day every day. Despite all the naysayers and doomsayers about this kind of thing, Australia's economy and workforce is perfectly healthy, and has been this way for decades....
- davidlumley 10y ago
  > anyone that isn't earning much (or doesn't have a job, or has never had one) can get around $250 per week. Forever. Very few strings attached. Sorry but that's just flat out incorrect. The maximum payment possible is $528 a fortnight through Newstart (not available to everyone, and only available for 6 months). See https://www.humanservices.gov.au/customer/services/centrelink/newstart-allowance https://www.humanservices.gov.au/customer/services/centrelin... for more information. $528 a fortnight equates to $13,728 annually (so you're going to get less than this, because you can only get it for 6 months) in a nation where the _median_ income is over $80,000 AUD. What little you get is going to be spent on rent, food, and going to and from interviews (which are a requirement of you getting NewStart). > It's known there are tens of thousands (hundreds? millions?) of people who just don't want to work and sit around on it for their entire lives. Dole bludgers are _few_ and far between. What you're seeing is people doing nothing because they literally cannot afford to do anything, even if they're getting the maximum payment (and it's likely they're not). Welfare in Australia could be a lot better, and I'd be interested to find out how a UBI could affect the process as Centrelink (the welfare department) is incredibly inefficient.
  - grecy 10y ago
    > Sorry but that's just flat out incorrect Have you been on the dole? I was on it between jobs, and my brother was just on it for a year while he rode a bike around Tasmania, then volunteered at the circus in Perth. It's very do-able. Obviously you're not owning an iPhone and driving a new Commodore, but if you're willing to have a few roommates and eat 2 minute noodles from time to time, it's an easy life.
    - davidlumley 10y ago
      No. I looked into it at one stage between jobs but didn't qualify for it because I had savings. I've had numerous friends who have been on and off various forms over the past 10 years though. I'm not implying it's not do-able, but it's definitely not the same as having a job that pays even 30k AUD a year. How comfortable you're going to be also depends on where you live naturally, as renting a room in Brisbane is about ~$120 a week minimum. Melbourne is more expensive and Sydney same again.
- nickfromseattle 10y ago
  Australia has an extremely high cost of living, $1,000/month doesn't seem high enough to cover the cost of rent, food and a cell phone, let alone enjoy a surfers lifestyle.
  - asdfaoeu 10y ago
    I assume by surfers lifestyle he doesn't mean a beachfront property in Manly.
  - tomjakubowski 10y ago
    Is the cost of living still that high outside of urban areas? And remember: there are 4 weeks and some change in the average month, so more like $1083/mo. Not that that's much more :)
  - giancarlostoro 10y ago
    I imagine some people could have roommates with either real jobs, or the same source of income, would help reduce costs. Others could live with their families and save their money for when they need it most. But I guess if you're by yourself that would kind of not be enough, but if you can still get that welfare check plus a part time job, it may just be enough.
  - grecy 10y ago
    > doesn't seem high enough to cover the cost Evidence proves otherwise. I know people who are doing it right now. Nobody needs a cell phone when they're just surfing every day anyway....
- inopinatus 10y ago
  That is an exceptionally positive review of Australia's economic position. By contrast can I point out that Australia has a high basic cost of living, colossal levels of private debt, an epidemic of obesity, an ongoing productivity crisis that was only temporarily masked by a resources boom, and a demographic inversion just around the corner that is likely to a) overwhelm the healthcare system and b) elect ever more conservative governments that will stifle immigration at exactly the time it is most needed.
  - tomlock 10y ago
    I'm not sure there are many nations in a better position. Could you provide some examples of countries that are?
  - confounded 10y ago
    They also have the highest median individual wealth in the world.
  - fratlas 10y ago
    Could you elaborate on the 'demographic inversion' that's incoming?
    - chiaro 10y ago
      Baby boomers exiting the workforce, along with lower birth rates (and some increasing anti-immigrant sentiment that curtails the normal set of solutions) will lead to issues with healthcare affordability and end of life care. But these are issues that all Western countries are dealing with, and I have no reason to believe that Australia would be harder hit than many others due in part to the success of our mandatory saving schemes.
      - elyobo 10y ago
        The success of the mandatory saving schemes will probably work for a while, but the current property crisis in Australia is going to put an end to that eventually. Give it another 30 or 40 years once the non-boomers that have been unable to buy a place to live (and have therefore being paying rent their whole lives and will continue to do so in retirement) and there will be an even worse crisis.
- ajdlinux 10y ago
  "Very few strings attached" Have you ever actually dealt with Centrelink?
  - grecy 10y ago
    Sure have. I was on the dole between jobs, and my brother was just on it for a year while he rode a bike around Tasmania, then volunteered the circus in Perth :)
    - ajdlinux 10y ago
      How many decades ago was that? Because I can guarantee you, as someone who spent 8 years on Centrelink payments (for study, not unemployment, which is even worse) that it is most definitely not no-strings-attached.
      - grecy 10y ago
        For my brother it was mid 2015 to mid 2016. I was also on center link payments for study.
- sjwright 10y ago
  And I suspect that if people didn't lose the $250 per week if they get a job, more people would get jobs, even if it were just casual or occasional work... Losing the benefit when employed is a massive disincentive.
- flukus 10y ago
  > Very few strings attached 20 Years ago maybe, now there are so many strings no one knows what to expect from centerlink. My mum has to get a doctors certificate every year to prove that my sister is still down syndrome. I doubt she's going to grow out of that extra chromosome.
- apatters 10y ago
  Australia also has an entire continent's worth of natural resources and a population of 25M people. Of course when you can pull money out of the ground hand over fist you can afford to spread a little of it around in the form of generous welfare and social services. It is a classic resource economy, helicopters of money everywhere during the boom years, take on debt during the bust years, cycle repeats.
ams6110 10y ago
The people already earning a living are the ones paying for it. You'd be taking their own money from them only to give it back, less overhead.
- AnthonyMouse 10y ago
  > The people already earning a living are the ones paying for it. You'd be taking their own money from them only to give it back, less overhead. The way means-tested welfare works is that there is e.g. a 20% tax and then people are given some benefits but the benefits are taken away very quickly, e.g. you lose 70 cents in benefits for every dollar of income. It means that low income people are effectively paying a 70% marginal tax rate while the rich pay 20%, which means there is a much lower incentive for the poor to make some more money. Especially when making more money can also cost more in expenses like transportation and child care, which can eat more than the part the government didn't take. The way a universal basic income works is that there is a somewhat higher nominal tax rate, e.g. 30%, but everyone gets the benefits unconditionally (and in cash, so less bureaucracy), so everyone has the same marginal tax rate. Which reduces the disincentive to work of means-tested welfare. You can still have any effective tax rate you like at a given income level, by choosing the amount of the basic income and the nominal tax rate.
schemathings 10y ago
I've wondered the same thing about WIC/Food stamps. What if everyone had a card for $x worth of food per month?
- AtheistOfFail 10y ago
  Republicans would have a heart attack, a stroke and a brain aneurysm at the same time.
  - 3825 10y ago
    I for one would love this idea even if it means we can only give a fraction of what we give now. My rationale is that if everyone gets the same amount regardless of income or race or whatever then the phony dogwhistlers (which is all that Reagan ever was) would have less of a stranglehold on the people. I think it would bring people together and it would encourage compassion.
fulafel 10y ago
Since it's designed to study the disincentives to work, by the end of the study it's likely to include many employed people. But true, it would be a better experimental setup to include all kinds of initial circumstances in the study population.
- dispose13432 10y ago
  >Since it's designed to study the disincentives to work, by the end of the study it's likely to include many employed people. On the other hand, people realize that UBI may go away any day. What will be when canceling UBI has as much chance as canceling Minimum wage?
  - sjwright 10y ago
    One would hope that the participants have been given a long term guarantee that this program will apply to them, perhaps 5 or 10 years. Without the guarantee, the results would be unreliable.
headcanon 10y ago
> Those chosen will receive 560 euros every month, with no reporting requirements on how they spend it. The amount will be deducted from any benefits they already receive. It looks like they're doing it in a way that doesn't cost anything - its just a reshuffling of the current benefits.

thescribe 10y ago

I'm very interested in this. My own intuition says basic income won't work, but it'd sure be nice if it did.

deleted 10y ago
[deleted]
quickben 10y ago
Eh, 30% of all income is capital gains income, so passive income does work for the top 1% without problems.
- cperciva 10y ago
  The majority of capital income flows not to the super-rich, but rather to the pensions of the upper-middle-class. Also, most income earned by the top 1% of income earners is employment income; many professionals (doctors / dentists / engineers / lawyers / accountants) fall into that top 1% of incomes. The working-age individuals whose income is primarily from capital are generally in the top 0.1%.
  - ragazzina 10y ago
    > Also, most income earned by the top 1% of income earners is employment income; many professionals (doctors / dentists / engineers / lawyers / accountants) fall into that top 1% of incomes. I am not American and I don't know if doctors and lawyers are usually considered 1 percenters, but Wikipedia says "Data on the minimum yearly income to be considered among the 1% vary per source, ranging from about $500,000 to $1.3 million."[1] It is my understanding that half a million dollar is not a common engineer or doctor income, I am not sure most income earned by 1 percenters is employment income. [1] https://en.wikipedia.org/wiki/We_are_the_99%25 https://en.wikipedia.org/wiki/We_are_the_99%25
  - filoeleven 10y ago
    You're right that the majority of capital income does not go to the super-rich, however they do get a very large slice of the pie nonetheless: > In 2015, according to PSZ, the richest 1% of people in America received 20.2% of all the income in the nation. Ten points of that 20.2% came from equity income, net interest, housing rents, and the capital component of mixed income. Which is to say, 10% of all national income is paid out to the 1% as capital income. > Even if you exclude the capital component of mixed income (since it is connected to work even if the income is not from labor) and housing rents (since these are imputed to homeowners rather than paid to them as cash), that still means that, from equity income and interest alone, the top 1% receives 7.5% of the national income without having to work for it. Put another way: the average person in the top 1% receives a UBI equal to 7.5 times the average income in the country. That last line is key. Even if most of the income of the 1% is not passive, they still receive a massive amount of passive income. Source: https://medium.com/@MattBruenig/the-ubi-already-exists-for-the-1-d3a49fad0580#.qkob80xzc https://medium.com/@MattBruenig/the-ubi-already-exists-for-t...

Nition 10y ago

The New Zealand Treasury did a basic analysis on a Guaranteed Minimum Income a while ago (2010) that's a good read, with a lot of actual numbers crunched: http://igps.victoria.ac.nz/WelfareWorkingGroup/Downloads/Working%20papers/Treasury-A-Guaranteed-Minimum-Income-for-New-Zealand%20.PDF http://igps.victoria.ac.nz/WelfareWorkingGroup/Downloads/Wor...

TheSpiceIsLife 10y ago
For those of us too lazy to click a link, would you mind providing a summary or a few dot-points of interest.
- gallerdude 10y ago
  From a table within the source: Benefits:  More equal distribution of income  Removes disincentive for beneficiaries to undertake part-time work  Poverty is reduced but only at the 60 and 70 percent relative levels (2, 2A)  May improve labour market outcomes in some areas: more employee flexibility; encourages unpaid work; additional employee bargaining power; encourages entrepreneurial activity; and reduces the opportunity cost of full time training or education.  Lowers administrative, management and operating costs Costs:  Poverty is either increased across all relative levels as Superannuitants have their payment decreased by 44% on average (1), or is increased when measured at the 50 percent relative level (2, 2A).  Horizontal equity problems due to differential treatment of one and two parent families  Many current beneficiaries (e.g. sole parents, the disabled and carers) will be financially worse off under the scheme  Reduces the supply of labour: decreases hours worked; increases migration of skilled workers; discourages people from taking entry level jobs; discourages further education and training; and the EMTRs for families with children are very high discouraging further work, MFTC (1, 2).  High personal income taxes have negative implications for saving, investment and productivity  Lowers economic growth (estimated at 2.8 percentage points per year)  Non-alignment causes integrity and coherence issues for the tax system
  - disordinary 10y ago
    It's interesting that they think it will be a disincentive to work, $300 is less than the benefit now when you include the accommodation supplement and quite a lot less if you include training incentive allowance, emergency cash, food allowances, etc. Yet people still work. I wonder if it would actually be the opposite, with people being able to work legitimately rather than under the table to supplement their income (and not have to fake ACC injuries).

sean_patel 10y ago

As humans, we are inherently Lazy. What's the incentive to start looking for work if there are no strings attached on how you can spend money? Is Finland the only country in the world that has 0 junkies, 0 prescription addicts, 0 dads paying child support? I agree with @aswanson, this is headed for inflation, or an even worse financial disaster. Side Note: Is it easy to immigrate to and naturalize as a Citizen? I'm buying my ticket.

ashark 10y ago
> What's the incentive to start looking for work if there are no strings attached on how you can spend money? More money? > I agree with @aswanson, this is headed for inflation, or an even worse financial disaster. Why would distributing money per se cause inflation? Does inflation go up any time money goes from one entity to several?
- hamandcheese 10y ago
  I think the inflation argument is that distributing more dollars would mean more buying power overall, increasing demand, and therefore cost of living increases. That only makes sense when supply is inelastic, which is not a valid assumption, imo. I can imagine certain things, though, like housing, might be more successful as extracting additional rent from across the board income bumps.
  - cperciva 10y ago
    That only makes sense when supply is inelastic, which is not a valid assumption, imo. No, it makes sense whenever supply is not perfectly elastic. And time scales matter -- most supplies are inelastic over the short term but elastic over the long term, so "helicopter money" will tend to produce a short-term spike in prices due to more money chasing a limited supply, which then levels off at different rates depending on the goods as the supply catches up.
- cperciva 10y ago
  Why would distributing money per se cause inflation? So-called "helicopter money" is very good at inducing inflation, because it shifts the equilibrium between "holding money" and "buying stuff". This is the principle behind quantitative easing. But basic income isn't simply a matter of distributing money; the money also has to come from somewhere, and raising taxes (or cutting spending elsewhere) in order to fund BI has a disinflationary effect. That said, the inflationary and disinflationary effects are likely to not apply equally across all goods; if you raise income taxes in order to fund a basic income system, you'll likely see increased inflation on low-end goods (since the people who purchase them have more money to spend) and decreased inflation on high-end goods (since the people who purchase those have less money to spend).

deleted 10y ago

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chunsj 10y ago

Basic income is not free money, it's redistribution so that every people can live humane life.

johnnyg 10y ago
Money comes from value and value comes from somewhere. If you receive a redistribution, you've not created value but you've received it. That's "free money". And remember friends, TANSTAAFL.
- AaronFriel 10y ago
  There are plenty of free lunches, they're called externalities, free rider problems, etc., etc. For a maxim held by so many who flirt with economics, it's strange that so much of the field is explicitly about determining where the free lunches are.
  - closeparen 10y ago
    The point of TANSTAAFL isn't that you'll never eat for free. It's that someone pays for your lunch. In an externality, someone pays for your lunch involuntarily.
    - AaronFriel 10y ago
      And I don't think that makes it any more relevant as a maxim here. Social safety nets, welfare, and UBI are all giving lunches to people. Sometimes they produce net benefits, sometimes not. Throwing in TANSTAAFL doesn't add anything to the discussion.
      - closeparen 10y ago
        UBI represents a massive increase in the level of redistribution proposed, so it's important to remember that it is redistribution and the money will have to come from somewhere.
  - 10y ago

dispose13432 10y ago

1. $587 a month in many cities in the US will barely rent a room. Even in St. Louis (https://www.rentjungle.com/average-rent-in-st-louis-rent-trends/ https://www.rentjungle.com/average-rent-in-st-louis-rent-tre... ), average monthly rent for a one bedroom apartment is $1000 a month. In LA, it's over 2000 a month, in NY it's 2700, in Detroit it's at 1000. SNAP (Food stamps) give about $255 a month. That means that out of UBI, about $300 is left over for rent. 2. If everyone in the US gets $587 a month, that's 1.5 trillion a year. The current US federal budget is 3.8 trillion. That's about a quarter of current US federal budget, and we still have to give an actual livable stipend to the truly poor (SNAP, section 8, medicare), some kind of defense, leave some for state/city tax, federal infrastructure programs (freeways/trains).

gokhan 10y ago
> That's about a quarter of current US federal budget Only some will be given free money, and almost all of them will be spent since receivers are poor and cannot save it, would be quite a boost to the economy. It's a very direct way of implementing Keynesian policies.
- dispose13432 10y ago
  >Only some will be given free money, I thought the idea is that everyone from Bill Gates to the beggar will be given it?
  - flukus 10y ago
    And most will have their taxes adjusted so that it makes no difference to the governments bottom line.
    - dispose13432 10y ago
      I'm saying that taxes will go through the nose (close to 25%) for everyone with quite questionable benefits (will barely pay for rent).
  - 10y ago

known 10y ago

Good initiative since 1% have 99% wealth http://www.bbc.com/news/business-35339475 http://www.bbc.com/news/business-35339475

cperciva 10y ago
That article actually says that the top 1% have 50% of the net wealth. But "net wealth" is a really weird statistic. The top 20% of the world has somewhere around 125% of the world's net wealth, because many people are in debt.

jasonmclaren 10y ago

The HN headline ("Free money for all") is a bit misleading. The article states that the basic income will only be given to 2000 randomly selected unemployed people.

grzm 10y ago
Source title: "Finland launches basic income experiment with Jan. 1 cheques for those in pilot project" Suggested title: "Finland launches basic income experiment with 2000-person pilot project"
cperciva 10y ago
2000 randomly selected unemployed people That's how they're selecting the participants for the trial; but continuing to be unemployed is not a requirement for receiving the $587. (Indeed, this is the whole point: They want to see if the existing system of unemployment benefits is creating a disincentive to finding work.)
ge96 10y ago
Definitely not click bait
dang 10y ago
Yes. We changed it to a shortened version of the article title. Submitters: the HN guidelines ask you to use the original article title, unless it is misleading or linkbait. (Submitted title was 'Free money for all: Finland launches basic income experiment with Jan. 1 cheques').

Tick2Time 10y ago

Basic Income is another failed Utopiasm and it depresses me that seemingly intelligent people are falling for its populist simplicities. But this is the age of Trump so I should expect no less.

philliphaydon 10y ago
Comment is strange considering the only other candidate was no better of a choice.
flukus 10y ago
> failed Utopiasm How can it be failed when it's never been implemented?

deleted 10y ago

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avenoir 10y ago

Could somebody living in Finland comment on what 560 euros per month will get you? Edit: Looking at some stats here [1] and it looks like 565 euros is enough to rent an apartment outside of city center. It also looks like one could potentially find something for 450 which leaves pretty decent money for food and perhaps a bicycle for transportation? Definitely not enough if you consider utilities though. That's some rough living. [1] https://www.numbeo.com/cost-of-living/country_result.jsp?country=Finland https://www.numbeo.com/cost-of-living/country_result.jsp?cou...

1rs 10y ago
That's about right. To live in Helsinki you'd probabaly need minimum 1000€ for a shared Apartment and food... With 560€ you might be able to live somewhere and scrape by.
- lastyearman 10y ago
  This is outside of Helsinki but student benefit is 460e per month and I know many who can live without taking on debt or working part time. Also If you manage to buy a (small) condo, the interest is basically below zero right now, so 560e could easily cover basic expenses.
  - Jommi 10y ago
    Student benefit is not 460e per month. In Helsinki Metropolitan area is is 315e student aid + 200e housing aid ( + possibility for student priced housing and other student priced amenities)
kisstheblade 10y ago
It's possible to live with that amount (because schools and health care are basically free), but it wouldn't be nice of course. Note that this doesn't really "cost" anything as the people in the program are already receiving generous unemployment benefits, " The amount will be deducted from any benefits they already receive." So the difference mainly is that you don't have to ask for this money or report it if you start to earn money. I wonder how your other benefits are affected though (child support, living expenses like rent and utilities etc.) if you indeed get a job. The bureaucracy is a nightmare here with unemployment benefits, so hopefully something good will come out of this project.

hydandata 10y ago

This is wholeheartedly welcome, lets hope 2017 brings more news like this. Not at all surprised that it is being done in Finland.

apatters 10y ago

The largest concerns about basic income are that it will reduce the incentive to work for at least some people, and that it is phenomenally expensive. Why not solve both problems by simply eliminating income tax on lower income brackets instead? This is cheaper, easier to implement and less politically contentious (we already embrace the notion of progressive taxes, and who doesn't like a tax cut?). It also gives the money directly to those who need it most. I suspect many people support basic income because they fundamentally believe in a world where you shouldn't have to work to make a living. They use arguments like helping the poor, or putting everyone on an even playing field, or the claim that tech will eventually destroy jobs anyway as Trojan horses for this agenda. I don't agree and I think most people would disapprove of basic income if you told them that it was intended to undermine the culture of working and earning to make your own living. If you really want to help the poor and the working class, support the elimination of income tax on the lower income brackets instead of basic income. It is a simpler, better, cheaper, and less divisive solution.

Gustomaximus 10y ago
Have you seen the concept of a negative tax rate? It's similar but geared to provide money to those that have lower earnings. Interesting concept like UBI. https://en.wikipedia.org/wiki/Negative_income_tax https://en.wikipedia.org/wiki/Negative_income_tax
- ThomPete 10y ago
  Only problem with that is that it doesn't get rid of the bureaucracy which is one of the very reasons UBI has been proposed. On another note I don't understand why the word Universal is being used. The point is that it's unconditional compared to the conditional version of something like Negative Income Tax.
jclulow 10y ago
You can't give people a tax break if they earn literally nothing. There isn't necessarily an economically sensible job for every single person, and it seems ridiculous to invent bullshit or demeaning jobs just so that people can work to eat. I reject the idea that working any deadend awful job just to get by is somehow virtuous. I love what I do, and I would do it even if I didn't need to work -- but being able to say that is an extremely privileged position to be in. We're automating away industry after industry. There already aren't enough jobs to go around, and that will only get worse from here on out. I have no idea what the future should look like, but we have to start by accepting that the value of working at a job to feed yourself is not irreducible or axiomatic.

NurAzhar 10y ago

in Singapore the unemployed can get up to $500 per year LoL is this a form of basic income

osmala 10y ago

This basic income experiment has plenty of flaws. Many people get DOUBLE that from government as benefits anyway, so the premise of that experiment is flawed. The disintensives for smallish amount of work still continue. Finland has additional benefits for rent, additional benefits for supported children and increases to standard unemployment benefits for having to support children. This isn't really the basic income as most people understand it. It really doesn't replace benefits bureaucracy with something more streamlined that deals away with disincentives. By disintensives I mean the situation in which reduction of benefits and cost of getting to work eat the salary and there is almost nothing left from the work if its a part time job.

metafunctor 10y ago
This is not a basic income experiment. This is an experiment to redefine and simplify unemployment benefits. Specifically, this experiment eliminates (much of) the problem that earning a few hundred euros will cut your unemployment benefits by the same amount. It allows people to take part-time jobs without being penalized. It's not perfect for the reasons you give and more, but it might be significantly better than what is currently in place. The premise that one can find some universal income amount X and do away with all other types of benefits is a pipe dream anyway. For some, X will be enough to scrape by. For others, X will not be enough for their medical care necessary to survive for two weeks. There will always be a need for some extra needs-based benefits.
- powmonk 10y ago
  I just wish it would stop being touted as a basic income experiment. It's not even close.
  - alkonaut 10y ago
    Any experiment that changes benefits to be unconditional whereas they used to be withdrawn if you get a job, will provide very useful insight into peoples behavior under a basic income experiment. That is why this a useful basic income experiment - regardless of whether the program itself is classified as basic income in its current form or not.

ge96 10y ago

Haha lucky, seems like one of those "idealized situations" If we automated everything, where does money/value come from. I still don't completely understand how money works "it's a ledger, faith, gateway of energy" a doctor is worth more than a janitor (not arguing that) Just when there are no skills involved, everyone's the same, would money still have a purpose. Though I like the idea of basic income. I wouldn't mind that myself and I could remove the fear of being homeless from my mind and focus more on web development.

chaosagent 10y ago
https://en.wikipedia.org/wiki/Post-scarcity_economy https://en.wikipedia.org/wiki/Post-scarcity_economy
- majewsky 10y ago
  When this is linked, I'd like to add this article about a concrete fiction of post-scarcity: https://medium.com/@RickWebb/the-economics-of-star-trek-29bab88d50 https://medium.com/@RickWebb/the-economics-of-star-trek-29ba...
- ge96 10y ago
  I don't understand. Is post-scarcity good or bad? Scarcity seems to be the reason why anything has value.... No forget that I kind of forgot what I was going with that. What I did want to bring up is this argument of land vs. population and energy/raw materials. If energy is neither created or destroyed, it's just moved around, and assuming we still have the sun, if we're just using the energy from the sun through food, then as long as the sun exists, aren't we fine? Same with water. Water might be transformed but it returns. Where it would it go? There is also salt water sure you have to take energy/time to desalinate and purify it. I just don't get that argument of resources if you have an ineexhaustable supply of energy as the sun for 5 billion years. Also humans compared to the size of the Earth, we don't even begin to cover it as far as human size compared to land size eg. continents. Please correct me as I'd like to learn.

pmyjavec 10y ago

Well if valley types have their way and automate 40% or more of jobs in the next ten years, then what actually is the alternative? This or major uprisings and violent clashes?

paulddraper 10y ago
> automate 40% or more of jobs in the next ten years No scheme on earth could automate 40% of jobs in a decade. > what actually is the alternative As a proportion of total U.S. jobs, farming declined steadily 5% per decade from 1800 to 1970. Imagine telling a youth in 1900 that in his lifetime, 35% of the nation's jobs would disappear. People will have nothing to do!!
- willvarfar 10y ago
  For a sense of what humans are capable of when motivated to work towards a common goal, look at the mass mobilization of the recent world wars. You may think it improbable, but surely you think it still possible?
- ThomPete 10y ago
  Between 98-2004 the US lost 4 million jobs to the Chinese. In that same period the chinese lost 15 million jobs to automation. I don't think most people understand how fast this is going mostly because we work in the part that still benefit from this. When automated cars and truck become a reality then 12 million jobs in the us are in danger. Transportation being the one job that can't be outsourced to other countries (contrary to Europe) is the most common job in the US. Once that's gone so are their jobs. And can we please stop comparing to farming and the luddite fallacy they are completely missing the point of whats going on right now. Did the horses get new jobs when cars started taking over? Technology replaces jobs that require higher and higher levels of abstraction and while technology keeps improving humans only improve to the extent that technology allows them to. Also here is another good example of a huge manufactorer who is going to get rid of all their people. It's here faster than you think. http://www.theverge.com/2016/12/30/14128870/foxconn-robots-automation-apple-iphone-china-manufacturing http://www.theverge.com/2016/12/30/14128870/foxconn-robots-a...

known 10y ago

Causes for Economic inequality https://en.wikipedia.org/wiki/Economic_inequality#Causes https://en.wikipedia.org/wiki/Economic_inequality#Causes

duckingtest 10y ago

That's pretty pointless... it has absolutely nothing to do with basic income. It's a limited time stipend. The recipients' behavior would only be identical if they were so dumb as to not plan more than a month ahead.

nabla9 10y ago

Finland is one of the best places to adopt basic income. We already have comprehensive and complex welfare system that creates pockets where effective marginal tax rate is above 100% (going to work part time reduces welfare, net effect is negative). In the lowest income service industry almost half of workers would earn the same if they were unemployed. Fears of people not working if they get the same money without working seems to be false. There is already two groups of Finns that get kind of basic income. Underage children and old people. Underage children get unconditional sum of money (goes to parents of course). Old people have guaranteed small pension. This test has many faults, (its only for unemployed, basic income would be for everyone) but it's unconditional like basic income should be. People get the same amount of basic income even if they find work, or work only part time.

ptaipale 10y ago
On the other hand, there are about 213 000 officially unemployed and 140 000 "hidden unemployed" with an employed workforce of 2 413 000. Worse than that, the benefit dependency has now started to become intergenerational. About one fifth of Finnish young men (20-24) are "NEET" (Neither in employment nor in education or training). To exaggerate a bit, they don't mind living on benefits as they have enough for housing, food and computer games, or whatever they do. The problem with welfare system's pockets of >100% marginal tax are not only related to money in the long term. It's also that the payment of benefits is interrupted very quickly upon the employment office learning of someone getting any job (even temporary and part time) and resuming payments is slow. So although the money is evened out in the longer run, people who take a job tend to have short-term cash flow problems. They really suffer for taking a job, and that is wrong. BI would help in that, but as a long-term solution on population level the equation looks unsolvable.
- nabla9 10y ago
  The biggest problem in Finnish welfare is pensions[1]. They are too high for babyboomer generation. Basic income would allow creation of something similar to mini-jobs in Germany but still giving people a choice. --- 1: Yes. Pensions in Finland are welfare. Pension fund savings cover only tiny percentage of pension. Young working people are paying sums much bigger than basic income to old people.

rmc 10y ago

I doubt they are actually giving cheques. It's only USA which still regularly uses cheques.

grzm 10y ago
Well, if we're going to be pendantic about it, the USA doesn't have cheques, either. The only check I currently write is for rent.

neilwilson 10y ago

This is fundamentally unemployment benefit paid to those out of work coupled with working tax credits paid to those in work. Nothing new to see here at all other than the elimination of the ridiculous requirement to look for jobs that don't exist - because there aren't enough jobs. Not enough jobs is still the issue, and nothing has been done to redress that. Nothing changes until the buyers market in labour is turned into a sellers market.

jfoldager 10y ago

> The scheme is part of the measures by the centre-right government of Prime Minister Juha Sipila to tackle Finland's joblessness problem. I like this is not even proposed by a leftist government. The Scandinavian left-right scale maps outside the political spectrum of many countries.

arjunbajaj 10y ago

I don't understand, how do governments plan to have a long term sustainable basic income for citizens when AI and other technological developments put a large percentage of people out of jobs?

ensiferum 10y ago
For example, tax the robot work equal to human work. But since the robots don't need money the salary paid to a robot is pooled to a "common bank account" and then distributed to humans according to some criteria by the goverment.
- chongli 10y ago
  Robots won't replace humans on a one-for-one basis. One human could be replaced by a hundred tiny robots or a factory with a hundred workers might be replaced by a single big robot. We already have single robots that can do a task hundreds of times faster than a human so how do you tax them equally to human work?
  - vorotato 10y ago
    Tax them by their production. If one robot can do the labor of 40,000 surely it can pay for the people it displaced so they don't starve to death.
notahacker 10y ago
Probably the same as they dealt with it in every other decade of the past century that people worried about workforces disappearing overnight due to technological development, women entering new areas of the workforce, immigration and outsourcing: by paying unemployment benefit to people whose jobs were very gradually replaced and ignoring the doomsayers who insisted - despite all the evidence to the contrary - that in aggregate humanity wasn't ingenious enough to find new things that other people would pay them to do.

kilre 10y ago

I am wondering. If there would be a real basic income for all citizens. Wouldn't that simply lead to an increase in overall prices, so nothing would be gained?

alkonaut 10y ago

Note that this is an experiment to observe the behavior of those who are on unemployment benefits when they get unconditional benefits. It is not yet universal income, even on a small scale (as it is conditional on the current benefit status). Note that any "complete" welfare state more or less guarantees, that you will get X income (or at worst, incur a cost of X). Even if you refuse to work, society will make sure you aren't hungry. There is universal healthcare etc. So the money is already spent - a basic income only changes the dynamics by also offering it to those who work. Offering it to people who work might reduce the number of worked hours, which would be a positive effect (might create more jobs, improve health etc). It comes at an increased cost of course - but that can be offset by increasing income taxes. If money is distributed and taxes are not increased, then it is a form of stimulus. In that context, a Basic Income should be compared to central bank stimulus (artificially low interest rates etc). If you want to make absolutely sure that stimulus money ends up spent in the economy, as opposed to saved or transferred abroad etc - then a BI seems like a better idea.

lintiness 10y ago
"If you want to make absolutely sure that stimulus money ends up spent in the economy, as opposed to saved or transferred abroad etc" i read this all time around here. money "saved" is usually invested, and that too stimulates an economy -- and probably more meaningfully long-term.
- kbart 10y ago
  So we can get another bubble? I prefer people spending money directly on goods they really need as opposed to shady deals by investment bankers.
- marcosdumay 10y ago
  Reality is more complex than that. This is what most people are talking about when they talk about stimulating consumption: https://en.wikipedia.org/wiki/Keynesian_economics#Excessive_saving https://en.wikipedia.org/wiki/Keynesian_economics#Excessive_... It logically leads to the existence of an optimum rate of saving/spending and the requirement of some powerful actor to keep that rate near optimum. Notice that the math is flawless, but there are some issues with its meaning, so again, reality is more complex than that too.

jernfrost 10y ago

I don't see basic income working in its purest form but then again that is not what this is. This reminds me of the reforms done to the Norwegian pension system, which allows people to keep working after retirement without reduction in pension payments. This was to encourage people who are healthy to work longer than the standard 67 year retirement age. To my knowledge this has worked well in Norway, and so I suspect a similar change can work well for the unemployed. I think we are going down the wrong path with endless reports, and threats to get unemployed people back into the workplace. I think it would be better with stronger focus on positive encouragement. I won't claim to fully understand the theory of guaranteed basic income, but as it has been explained to me it seems inherently flawed in its purest form. The whole point of a welfare system is that members of society will occasionally experience dramatic situations which can get very costly, whether from unemployment, serious illness or accidents. That means sudden spikes in money requirements. A socialized system can handle that as those spikes are evened out over a large portion of people. But a universal pay is constant to my understanding and thus won't fluctuate with need. This all it can really solve is hindering people from lacking basic necessities like food, shelter and clothes. You can make a system which pays enough to handle every possible case unless you make the payment really high. A young healthy individual will require less basic income than a disabled person in a wheel chair with expensive medications and customized house and car.