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I realize that UBI is a very popular position on HN, so I am hoping someone here has given this more thought and can comment. My problem with UBI is that all t

• FussyZeus 9y ago
  > My problem with UBI is that all tests to date look great, but have only been done on a micro level. The fundamental issue I would like addressed is the macro scale inflation you would expect when redistributing trillions of dollars without commensurate economic value being created directly. The thing is though, most people who would benefit from UBI are not currently generating enough economic value to live, or barely so, and many are probably not capable of doing so for any number of reasons. We can do this because: > Money is a complicated subject, but essentially it represents a transfer of a future scarce resource. For commodities, the cost is essentially the sum of labor to generate it (either to mine the raw resources, build the factory, etc). ...the costs of all of these things are plummeting due previously to outsourcing, and now to automation. As manufacturing becomes more and more automated and the costs of these items continues to drop, you start seeing volume sales/renewing subscriptions being the only possible way to make money on some products. > If no economic resource is being added to the economy, then you are just devaluing money. That is usually very regressive, and in this case could be made worse by people slightly reducing their economic labor because of the extra income stream. I could see this leading to a bad cycle, where any economic gains due to increasing UBI are later undermined. This is my one beef with UBI and the one thing that does make me worry about it, but the way I see it is that whatever effect this does have the overall value of the currency cannot possibly approach the effects that the results of borrowing and printing currency to fund things like the outrageous defense budget (of the US) do, the economic benefits of which are muddy at best. For me this is both an issue of economics -and- of people. To me, in a country as rich as mine it's embarrassing that we still have such vast areas of the country that look more like the slums of Brazil than the cities they're usually parked next to. It's also the simple fact that if you continue to displace more and more people, as we've done, who are too old/not smart enough to change careers, eventually something is going to give. Frankly I pitch UBI as how we avoid the second Civil War, where instead of North vs South, we have Urban vs Rural when the much larger (and better armed) population gets tired of the cities and their nonchalant attitude towards their plight. These are legit questions and I hope we get better answers than mine (I'm no economist), but speaking as someone on the higher end of the income brackets who would never see a dime from UBI, I really don't think continuing to pretend that the rich can keep on getting richer and the poor poorer is a good plan. When it comes right down to it, there are more of the poor than the rich, and the cash won't save you when they break down your door with pitchforks.
  • CuriousSkeptic 9y ago
    If you don't see a dime I wouldn't call it an UBI. "Unconditional" is supposed to mean that everyone gets the same amount of dime. If you are concerned with progressive income tax as a means of financing it. Consider the possibility to implement UBI based on land rent instead, like the Alaska oil fund but the rent from all kinds of natural resources that really should be shared fairly anyway. Regarding the issue that people would work less: - Perhaps that's not a big problem. Just think of all the people in telemarketing that could just stop contributing to that particular problem. Or perhaps some other truly evil industry, like tobacco, would people with an UBI be more inclined to not work in unethical industries? - Perhaps more people would dare to start their own business. Trying truly weird stuff that no one would invest in otherwise. - Perhaps it contributes enough stress reduction in people to have significant effect on healthcare costs - Given the safety net of an UBI, a lot of laws and institutions surrounding employment could perhaps be relaxed and more dynamic. In my mind the potential benefits to the economy and could be quite interesting
    • FussyZeus 9y ago
      > If you don't see a dime I wouldn't call it an UBI. "Unconditional" is supposed to mean that everyone gets the same amount of dime. I wouldn't see a dime because I make far, far more than the people who need it. I don't need help.
      • lovich 9y ago
        Part of the benefit of UBI is removing a large amount of overhead that comes with current welfare systems. This is done by writing a check to every citizen in the system with overhead only to confirm that one citizen gets one check. When you add in other checks you increase how much money needs to be spent on just running the system
        • sokoloff 9y ago
          If I literally see a dime from the UBI check and pay $2 in taxes to support the UBI program for every dime in UBI I receive, it's reasonable to say that I'm not really receiving UBI on a net basis. (I still support it, and your arguments for why it must be universal are congruent with my own thinking.)
• DrNuke 9y ago
  You know, trillions are raided from communities and stashed offshore untouched instead of being reinvested locally, this makes entire continents poorer; on the other hand, it is common sense today to give people the basic to survive instead of having them fleeing, migrating and becoming criminals. You may even avoid paper money, just give all a credit card to buy the minimum daily dietary without withdrawal allowance. Otherwise history says that there will be wars.
• omot 9y ago
  You're absolutely right, but theres no other solution that's feasible. If we don't have some form of UBI, I'm willing to bet in 20-30 years we're looking at another French revolution. I think the best solution is instead of handing out liquid cash that can be used/abused in any way (and contribute to inflation as you say), the better option is to provide basic accommodations for every citizen in a given country. This means, basic housing / basic education / basic means of transportation (either car or ride sharing credits) / basic forms of entertainment / basic access to some vacation spots. That way no one needs to work anymore but you could keep the general citizen's happiness to a stable level. The only problem with this solution is that the government has to pay for this by either borrowing money from private creditors or to tax the rich heavily. The rich are only rich because they're good at keeping their money, so it's a good solution, but incredibly hard to pull off.
• bryanlarsen 9y ago
  Why would you expect inflation? All sane UBI proposals don't create money, they just move money from rich people to poor people. If you're a Friedman disciple, then "inflation is a monetary phenomenon" and we can stop there. If we're moving money from rich people to poor people, perhaps we'll see the prices of stuff rich people buy go down and the prices of stuff poor people buy go up. The vast majority of stuff poor people buy is demand limited, not supply limited, so if poor people start buying more PS4's, Sony will just make more. I'll also assert that food is demand limited, we have lots more capacity to increase production than people think. It doesn't matter though; the problem with poor people in the United States is that they eat too much, not that they eat too little. The only thing that might see price movement is housing. That's definitely supply limited in many places. But maybe UBI will encourage people to move from high cost areas where UBI isn't sufficient to live on to low cost areas where it is. And movement will only happen in the margins -- most of the poor in the States already have a place to live, so demand shouldn't increase that much.
  • nateberkopec 9y ago
    MV = PQ. Money * Velocity = Price level * Quantity of goods and services. Friedman assumes the velocity of money is constant (good assumption), so really the only why you can cause inflation is to increase the supply of money, M. UBI increases the velocity of money by moving money from low-consumption, high-investment rich people to high-consumption, low-investment poor-to-middle-class people. Increase money velocity, and you'll see price inflation to compensate.
    • pyoung 9y ago
      But if we are demand constrained as opposed to supply constrained for most consumer goods, than you will see an increase in 'Q', not 'P'.
      • mjevans 9y ago
        Energy, time and space. Distance is effort, both in energy and time. Space is already constrained by historical distributional of 'valuable' lands, and restrictions on new ones. There's nowhere left to go out and just settle that someone else doesn't already claim somehow. (Yes, if you go out of the solar system you might claim that... but that's literally how bad the issue is.) The real solution is increasing supply. Yes, UBI will help individuals, but society must actively balance to ensure that there is enough supply in the markets to maintain liquidity. Otherwise (as we see with housing) flow seizes and prices dramatically rise.
• deleted 9y ago
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• wvenable 9y ago
  I think one of the biggest problems in the world right now is how much money is simply captured and not moving through the economy. A huge amount of money is sitting around adding very little economic value. Redistribute that money to people who will use it to consume products and services and you get a much more active economy.
  • moxious 9y ago
    Where is this money that is captured and not moving? Most invested dollars are still moving in one form or another. Invest in a company's bond, and they're using that money to build a factory.
    • taway_1212 9y ago
      If you buy stocks, you could argue that this money is not doing anything (except maybe the person who sold you the stock now has cash and is presumably doing something with it).
      • moxious 9y ago
        That's exactly what I'd argue. You can't show money tied up even in skyscraper investments since they generate rents. So where is all of this money that's just sitting there doing nothing? So long as interest rates are > 0%, I think that's going to be a pretty rare situation.
    • wvenable 9y ago
      Apple has 250 billion dollars in cash -- they aren't building any factories with it. There might be greater need for factories if people had more disposable income to spend on things.
• nugget 9y ago
  Look at Alaska which has a long-term state-run form of UBI. It's about $100 per person per month. Even at such a low amount, to your point, it creates some measurable inflation and other distortions in the market. UBI may only work as a low, supplemental amount to start, so it could be a fair analog. The idea that we'll start with UBI that's enough for each individual to rent a studio, cover transportation costs, and put food on the table seems improbable.
  • vkou 9y ago
    Distortions in the Alaskan market happen because everything in the far north costs a lot more labour/energy. This is due to economies of scale, the inhospitable environment, and the need to ship in pretty much everything necessary for human life. Government handaouts are not why a head of lettuce in a small town in Nunavut can cost ~$15.
    • nugget 9y ago
      Yes, that's true. There are other Government subsidies (e.g. increased payments to medicare providers) meant to offset the costs of operating in that environment. What I meant was that within these "permanent distortions" of the market, there are short-term observable trends around the time of the APF dividend (an annual payment) is distributed, e.g. I believe something like 30% of all sales in certain (rural) areas occur in the 30 days following distributions. My larger point was simply that 1) the APF is an important source of income for many cash-poor Alaskan families, 2) Alaskans generally seem to have faith in it's sustainability, 3) there's 30+ years of good data around distributions and economic activity, and 4) as such, it seems like both the best proxy we have for UBI and its potential effects.
• drxzcl 9y ago
  Most western social democracies already have an overlapping network of benefit systems that are essentially a patchwork UBI in disguise. The system is designed not to go without food and shelter, but the exact mechanism varies depending on what population group you belong to. There's assistance for the temporary unemployed, for students, for people with disabilities, people with long-term illnesses, etc. There's pensions for those that have aged out of the workforce, there's assistance for children. And this is only scratching the surface. Even working people get a fixed basic tax deduction under most taxation systems. I'm not convinced that the sum total of all these benefits plus the current infrastructure that is needed to maintain, dispense and detect/punish abuse on them is significantly larger than the total expenditure on UBI. Of course, all the people that you let go from the benefits departments initially will end up on UBI, so that's not really a big win. But eventually they will find employment elsewhere, hopefully.
  • notahacker 9y ago
    > I'm not convinced that the sum total of all these benefits plus the current infrastructure that is needed to maintain, dispense and detect/punish abuse on them is significantly larger than the total expenditure on UBI. Most western social democracies publish the data on costs of running departments and numbers of working age people in employment or receiving each type of subsidy, so we know that the admin costs are negligible compared with the cost of paying a living subsidy to an enormous number of working age people who aren't claiming disability or unemployment benefits, generally because they don't need the money enough to take the steps necessary to claim it.
  • kilroy123 9y ago
    I completely agree. I think moving to a single-payer health care system would also be required.
    • gator-io 9y ago
      I believe single payer eliminates market competition to the detriment of all but those who can pay out of pocket. A better way is to use UBI which a portion earmarked only to purchase health insurance. Instant universal coverage with consumer choice and market forces stay intact.
• the_gastropod 9y ago
  The best explanations I've heard effectively make the assertion that a country's land is collectively owned by its citizens. Its citizens can then charge rent (via taxation) to individuals or corporations using the land. UBI is the distribution of that rent.
  • thescriptkiddie 9y ago
    Politicians are loath to acknowledge this, but the fundamental purpose of taxation isn't just to fund the public good, it is to discourage rent-seeking. Economic rents (not to be confused with the rent you might pay for an apartment) are dead weight, so any tax that can target them without disrupting actual productive work is effectively free money. One of the best ways of doing this is, as you proposed, to tax the unimproved value of the land. https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax
  • moxious 9y ago
    In what way is the land collectively owned? The business would show a deed and prove they already own the land. Also, if I already own a house privately, I would pay the commons rent on what I already own? This seems to pervert the notion of ownership.
    • the_gastropod 9y ago
      In the US (and most countries), land "ownership" is already a perverted notion. You often must pay personal property tax on the land you "own", the government, through eminent domain, can take the land you "own", etc.
    • kwhitefoot 9y ago
      As the land is not something that you created your 'ownership' of it is simply a grant from the commons. Unless I am misinformed this is explicitly the case in the US as far as many tracts of land in the mid-west are concerned, the federal government granted parcels of land to those who would settle there. The point is that because it is a grant from the commons there is no natural law that says that that grant cannot be handled in a different way than it is now. If society as a whole decides that this grant is no longer to be regarded as absolute then there is no barrier to taxing the occupier of the land.
• savanaly 9y ago
  As others said, UBI doesn't necessitate increasing the stock of money, it's a system of redistribution. The types of goods being consumed by the economy as a whole would change, you correctly predict (if they didn't, UBI could hardly be called a success in redistributing money to the poor, could it?). Luckily, one thing capitalism does have going for it if nothing else is that it encourages a rapid response to changing demand. There may be a period of time where the grocery store aisles are leaner than usual, so to speak, but I don't see why we wouldn't see our usual swift return to equilibrium.
• bluehazed 9y ago
  UBI generally has the implication attached to it that creating a proper safety net allows for savings in other areas, simplifies other social services, and reduces costs through net social benefit - not just the upfront costs. So health care savings, the ability to quit your job and go back to school (or other kinds of re-training, generally a diversified workforce is a beneficial one), reducing the need for shelters, etc. This is aside from the fact that a reduced engagement in the workforce doesn't have to be a negative thing - plenty of money is being made, it's just not being distributed very well :) UBI just intends to right that inequality in a productive way.
• funkyy 9y ago
  I would like to see UBI tests performed in pathological areas, or areas close-to-pathology - in real world environment without hype enforced on them.
  • _rpd 9y ago
    In the "real world", payday loans type operations will be the only beneficiaries of UBI. Simply handing out money will not change the structure of society.
• rpearl 9y ago
  But sometimes that scarce resource is time. You pay a person for their time doing a service. For instance, waiting tables. Cleaning. Staffing a counter. Driving a truck. Nothing (or very little) is constructed there, it is just a service rendered. And you can therefore consider financing UBI by virtue of the time saved by automating these tasks. You take that time saved and hand it back as dollars instead of translating it into additional profit.
• clairity 9y ago
  we're so sophisticated now that we abstract the idea of work away from the idea of making a living (as in being able to be alive, as opposed to dead) and come up with concepts like UBI where we can simply not work, without realizing that not working correlates with not living. work is not some thing apart from ourselves. work is not something apart from play or recreation or relaxation or any such things. we move and create and change and destroy all the same. we value these things as part of our social fabric of keeping a community of us humans alive. money lets us abstract away the need to trade immediate goods for that purpose, but it also lets us abstract out the fairness of it all. those who seem to contribute more to the general welfare might deserve a little more in return, whether it be in goods or esteem or respect. but we're all expected to put in along with taking out. UBI would tear up that implicit social contract and unmoor us from our democratic underpinnings. while well-intended, UBI suffers from the same idealism as libertarianism by failing to grasp even a basic modicum of the human condition. despite automation, people will create ways to make a living. lives are literally depending on it. that's not to advocate long-term suffering, but our social responsibility should be focused on using our natural craftiness to help others help themselves (and leveling the playing field), not providing handouts.
  • adrianN 9y ago
    I agree that work is very important for mental health. I disagree that the work has to be in form of a paying job. With UBI I could choose to work on open source, or create art or clean up my neighborhood. Without UBI I have to sell my lifetime and work on things that don't really interested me.
    • EduardoBautista 9y ago
      I can see GDP dropping massively.
      • adrianN 9y ago
        Normal people don't care about GDP. They care about working infrastructure, food, housing... those things can be had with a shrinking GDP.
• FullMtlAlcoholc 9y ago
  UBI isnt the solution, there just isnt a better response that has even slight chance of being implemented. There needs to be a radical shift in how we look at our economic systems and culture in the medium term. However, if the currently proposed health care replacement is evidence of current thinking, U I is a pipe dream. I don't usually make predictions, but it is going to get very ugly in the next 10 years if nothing changes.
  • stevenwoo 9y ago
    IIRC the margin for single payer healthcare being not considered under Obama was Joe Lieberman demanding it be removed from the ACA/Obamacare in the Senate. And this was only because the Democrats were honoring the filibuster so they wanted 60 votes, when they could have removed the filibuster like the GOP did for the Supreme Court nomination.
• tim333 9y ago
  Inflation or deflation is basically driven by the balance of goods and services available against money being spent. If your hairdresser say is full all the time you raise prices, if it's empty you give discounts. At the moment if you handed everyone more cash without an increase in output you would get inflation. If you took the money from the rich and gave it to the poor you might get some inflation in basic goods as the poor tend to spend their money while the rich invest it. Also possibly deflation in luxury condos. This probably isn't going to happen in a hurry due to politics. If robots start producing a lot of goods and services then giving more money to people would not necessarily be inflationary and there would be more money spent but more goods and services also. Your hairdresser would have twice the customers but employ robo-haircutters rather than raise prices as it were. I could see something along these lines being gradually rolled out with the amount of basic income increasing as human labour became less necessary.
• jopsen 9y ago
  The argument I hear for UBI is that it eliminates all the administrative overhead of most existing welfare programs. In most western countries unemployment does equal lack of food or housing... due to a large number of welfare programs.
• piinbinary 9y ago
  I wonder if a MMORPG with an economy could be used to simulate what happens.