3 ms·

The incentive structure in this example is certainly bad, but that is an issue whenever you are planning to give things away for free, with a universal basic in

by danbruc 10y ago

The incentive structure in this example is certainly bad, but that is an issue whenever you are planning to give things away for free, with a universal basic income scheme or otherwise. That my example is exceptionally poor in this regard should not matter too much for the point addressed unless you want to hint at a problem with sustainability. That might or might not be the case depending on the behavior of the people but given that universal basic income proponents argue that people would not get lazy and exploit the system I am happy to make that assumption. In case that turns out to be false, it is certainly possible to tweak the scheme in such a way that there remains an incentive not to become lazy, for example by lowering the 100 % tax rate but still keeping it high.

AnimalMuppet 10y ago
Hint at a problem with sustainability? I'll come right out and say it: Your proposal is not sustainable. The only people who will work in that environment are those who will work for free. Even if that were enough people, you also remove economic feedback about the effectiveness of peoples' actions. That feedback is critical for an economy to efficiently allocate resources.
- danbruc 10y ago
  First let me say that I am not trying to defend universal basic income schemes, I think they are not a great idea. With that out of the way, the point you are mentioning is a fundamental problem of universal basic income schemes. You can not promise to provide goods and services for basic needs to everyone unconditionally unless you have some magic black box providing the required goods and services. You can try to tweak the incentive structure here and there to make it unlikely that you will end up in the worst case scenario but you can not really get rid of it. Unless you advance technology and automation to the point where you can provide for basic needs without any labor at all, a universal basic income scheme is a promise you can not keep unconditionally.
orangecat 10y ago
The point of the UBI is that we are already giving things away for free, and we're doing it inefficiently and creating bad incentives in the process. Right now it's entirely possible for a low-income worker to get a raise and end up worse off, because they cross the threshold for a means-tested program and lose more in benefits than the amount of the rais. The question shouldn't be "would a UBI discourage work", it should be "would a UBI discourage work more than the current system does", and there are strong arguments that it would not.

by danbruc 10y ago

AnimalMuppet 10y ago

Hint at a problem with sustainability? I'll come right out and say it: Your proposal is not sustainable. The only people who will work in that environment are those who will work for free. Even if that were enough people, you also remove economic feedback about the effectiveness of peoples' actions. That feedback is critical for an economy to efficiently allocate resources.

danbruc 10y ago
First let me say that I am not trying to defend universal basic income schemes, I think they are not a great idea. With that out of the way, the point you are mentioning is a fundamental problem of universal basic income schemes. You can not promise to provide goods and services for basic needs to everyone unconditionally unless you have some magic black box providing the required goods and services. You can try to tweak the incentive structure here and there to make it unlikely that you will end up in the worst case scenario but you can not really get rid of it. Unless you advance technology and automation to the point where you can provide for basic needs without any labor at all, a universal basic income scheme is a promise you can not keep unconditionally.

orangecat 10y ago

The point of the UBI is that we are already giving things away for free, and we're doing it inefficiently and creating bad incentives in the process. Right now it's entirely possible for a low-income worker to get a raise and end up worse off, because they cross the threshold for a means-tested program and lose more in benefits than the amount of the rais. The question shouldn't be "would a UBI discourage work", it should be "would a UBI discourage work more than the current system does", and there are strong arguments that it would not.