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How can you meaningfully experiment with UBI if the “BI” is not even universal? My understanding is that many of the criticisms of UBI are based on externalitie
by chatmasta 9y ago
How can you meaningfully experiment with UBI if the “BI” is not even universal? My understanding is that many of the criticisms of UBI are based on externalities that would only become manifest in a meaningfully large population. For example, price increases and inflation might arise from everyone having extra money.
If you’re only testing UBI on a small population, then 1) it’s not even universal, and 2) there will not be enough “beta testers” to (in)validate these criticisms.
So while this may be a “success” (how do you even measure that?) it’s not a meaningful experiment at all.
- ganzuul 9y agoOne interpretation of "universal" is that it is income independent of other income, so if you get a job you still get UBI too. This could be a huge help people who can't find stable employment, but still want e.g. a loan to buy a home.
- moduspol 9y agoI agree that it's tough to measure "success," but at least it would be presumably easy to measure failure. If we see exactly what opponents claim will happen, it would suggest a more strict implementation might be worse. My concern is that with this we're likely looking at an even worse version of the problems seen with sending shoes to Africa [1]. Over the duration of this experiment, it's quite possible you'll create a society that abandons skills / equipment / expertise necessary to sustain an economy. That won't be a problem until the experiment ends, and then you've left people in a place far less than where you found them. [1] http://www.djiboutijones.com/2014/02/dont-send-your-used-shoes-to-africa-or-maybe-do-send-them/ http://www.djiboutijones.com/2014/02/dont-send-your-used-sho...
- skybrian 9y agoIf you're sending money then people will spend it (such as on shoes) and increased spending and investment will tend to help local businesses much more than sending goods that compete with them. So I'm not seeing why you think skills will atrophy? It seems like there's more danger of that when people are poorer? (For one thing, education becomes less affordable.)
- moduspol 9y agoThe shoes don't have to come from Bomet County. Nor does the food, or the electricity, or much of anything else. The poverty rate is just under 50%, per Wikipedia at least. If all the money is coming from the county (presumably it is), then it's going to be coming from the other 50%, and at a rate higher than neighboring (non-UBI) counties. It will be in the rational self-interest of that non-impoverished 50% to leave. Labor will be more expensive as fewer people want to do less-desirable work due to no strong need. I don't know how freely workers can move between counties, but obviously I imagine some people in neighboring counties will want to move in for the free paycheck. Over time, you've chased out the productive people and bolstered the less productive ones, and you're drawing from a smaller and smaller pool to pay for a larger and larger group of people. I've always felt like UBI is unsustainable, but at least worth debating. I haven't yet seen even proposed what should be done if UBI fails this way, though.
- skybrian 9y agoInteresting theory, but they already started a pilot study in one village, and the results were nothing like that, so far. There seems to to be lots of local small business investment. I also don't see anything about people moving in or out. https://givedirectly.org/blog-post?id=1423924916713458127 https://givedirectly.org/blog-post?id=1423924916713458127
- supermdguy 9y agoThanks for the link.
- moduspol 9y agoThat link says they started "last October" and is dated February 2017. It covers 95 people. That's a very short period of time, quite sparse on details, and a small group of people in an isolated environment. They're also not taking money from people in the community to redistribute. Put plainly: It's not surprising at all that one can take a lot of voluntarily-given money and distribute it to an impoverished village in Africa, resulting in them being happy and saying they're seeking work (in the short term). Normally, though, that's called "charity" rather than a UBI experiment, and even UBI opponents will acknowledge the likelihood of that happening.
- shkkmo 9y agoThis is the exact opposite of that. When you send free goods into an economy, you inhibit demand which in turn inhibits economic growth. When you send money into an economy, in increase demand and it will have the opposite effect.
- sulam 9y agoTo be clear the demand is the same — the price is the issue. UBI and inflation may well be tied tightly together.
- moduspol 9y agoUBI doesn't send money in, it redistributes it. And if solving economic problems were as simple as "just take more money from the rich people and give it to the poor people," this problem would have been solved centuries ago.
- munk-a 9y agoClearly. And is this statement based on the well known fact that rich people have always been happy to have their money taken away and given to poor people without trying to undermine any genuine efforts at wealth redistribution for economic growth? That's why we don't have any rich people any more and wealth inequality is at it's lowest point in decades, right?
- shkkmo 9y agoThe post I was responding to wasn't citicizing UBI, but rather criticizing this specific type of program which DOES inject money into the local economy from outside doners. > And if solving economic problems were as simple as "just take more money from the rich people and give it to the poor people," this problem would have been solved centuries ago. When in history have we tried anything like UBI? How can we know if it works if we have never tried it?
- moduspol 9y agoWe've provided subsidies and guarantees to try to help poor people and manipulated markets with predictable results countless times. In the US, higher education loans and urban housing are modern day examples of this. UBI isn't inherently different. It's trying to pretend you can manipulate a market with no detrimental side effects, but it's been tried many, many times.
- jerf 9y ago"Over the duration of this experiment, it's quite possible you'll create a society that abandons skills / equipment / expertise necessary to sustain an economy. That won't be a problem until the experiment ends, and then you've left people in a place far less than where you found them." That would be a valid result of the experiment though, in light of the fact it is completely impossible to implement UBI everywhere at once. UBI isn't useful if there isn't a path from here to there. We have no lack of wonderful utopias whose only problem is that there is no path from here to there. If UBI can't prove itself out on a smaller scale it can on no account be tried on a larger scale. If the worst some bad social engineering idea does is leave a single county worse off, then it will be doing very well as bad social engineering ideas go. It appears from reading this post that tracking the skills of the community is already part of the plan. There are certainly predictions about this from both sides. (I'm a skeptic, yes, but I promise to treat the results from this experiment fairly. However, bear in mind that even total success at this level still wouldn't prove to me that we should immediately adopt it at a national level; I'll need to see a larger one. But I will admit that I was at least wrong about this experiment, because I don't expect this to prove out very well either. I also expect a lot of spinning of the results to make them look as good as possible, so I reserve the right to unspin the results. As a token of such good faith, I offer that while I remain a cryptocurrency skeptic, and a BitCoin skeptic in particular, I expected BitCoin to be totally dead by now, and it is not. I say this to demonstrate that I can indeed eat crow.)
- shkkmo 9y ago> I'm a skeptic, yes, but I promise to treat the results from this experiment fairly There have been lots of previous experiments with stuff sort of similar with UBI. While there are many problems with those studies preventing their use as any sort of conclusive proof, they have been predominantly neutral or positive. Yet I don't see that accounted for in the predictions of doom and gloom any of the UBI skeptics. If this experiment goes well, you need to do more than just admit you were wrong about the experiment, you and other skeptics need to lower your confidence in your overall skepticism of UBI. > while I remain a cryptocurrency skeptic, and a BitCoin skeptic in particular, I expected BitCoin to be totally dead by now, and it is not. I say this to demonstrate that I can indeed eat crow.) It sounds to me like you have not eaten any crow. If you had you would say: based on my understanding of the forces at play, I thought BitCoin would be dead. BitCoin has thrived instead so my understanding of the forces at play is less than I had estimated. Based on that, I am now less skeptical (or less confident of my skepticism) of the future crypto currencies. (I share your skepticism of the future of BitCoin, but I am far less certain of that skepticism than I used to be for these exact reasons)
- skybrian 9y agoIt doesn't answer all questions. For another example, we won't know how much the results will transfer to other countries. But it's meaningful to see what people will spend the money on, its effect on the local economy (village level), and how this compares to other ways of reducing poverty. There are still a lot of people who think that people will stop working or spend the money on some wasteful way, and this will tell us whether that's true.
- mehrdadn 9y ago> It doesn't answer all questions. For another example, we won't know how much the results will transfer to other countries. We won't even be confident the results will transfer to the same country at some later time. Lots of things can change over time alone, let alone across populations.
- ttoinou 9y agopeople will stop working or spend the money on some wasteful way That's not really the argument. What does matter is where does the money come from. Cf These handout incomes are to be given as "an absolute constitutional right," and not to be withheld "under any circumstances." This means that the recipients are to continue to get this income not only if they absolutely refuse to seek or take a job, but if they throw the handout money away at the races, or spend it on prostitutes, on whiskey, cigarettes, marijuana, heroin, or what not. They are to be given "sufficient to live in dignity," and it is apparently to be no business of the taxpayers if a recipient chooses none the less to live without dignity, and to devote his guaranteed leisure to gambling, dissipation, drunkenness, debauchery, dope addiction, or a life of crime https://fee.org/articles/income-without-work/ https://fee.org/articles/income-without-work/
- shkkmo 9y agoYour claim is contradicted by your quotes which specifically calls out people not working and spending their money wastefully.
- 9y ago
- shkkmo 9y ago1) How do you mean it isn't "universal"? My understand is that this initiative is universal within these communities? Are you saying that there is no meaningful way to test UBI without jumping immediately into a global program? 2) 6000 is a pretty good sample size. Given that this will be universal within these communities, we can certainly look for any evidence of local price changes.
- chatmasta 9y agoThat would be true if every economic good were produced within the community. I don’t know how isolated these experimental communities are, but I doubt they source 100% of supplies from the same group that’s getting the basic income.
- shkkmo 9y agoIt's true if ANY economic good is produced locally. You can look for individual prices changes. Additionally, production costs are highly variable component of local prices and can be dwarfed by transport and retail costs (e.g. produce in the US.)
- k__ 9y agoWhy? Even if a whole country would have UBI they still need to import stuff...
- jlg23 9y ago> If you’re only testing UBI on a small population, then 1) it’s not even universal, and 2) there will not be enough “beta testers” to (in)validate these criticisms. Your point holds until history has proven who is right. Of course, any experiment on UBI that is constrained by a financial reality of whoever conducts the study needs to limit eligibility and therefore lose the proof of universality. But: Do you have a better design for UBI experiments, given actual constraints?
- RcouF1uZ4gsC 9y agoAlso, another point that this "experiment" doesn't really generalize beyond charity, is that the population of people who get the money, are not the ones supporting the program. The funding for doing this comes from outside donors. Thus, the people who receive money, have no downside of using that money to increase their earning potential. However, if it were implemented at the government level, people who used their money to increase their earning potential would have to pay increased taxes to support the UBI. The cost/benefit to extra earning changes if you keeping all your extra money, or a significant portion is going towards funding UBI. Once you do that, you may see a lot more people decide that the extra effort is not worth it. So, this is a great experiment in directly providing money as charity. It does not really address UBI as would be implemented by governments.
- eeZah7Ux 9y ago> everyone having extra money No. UBI redistributes income (slightly differently than welfare). It does not create new money.
- closeparen 9y agoThen many (the upper half of?) citizens will have tax burdens greater than their basic income payments. Is it “not means tested” because you and the IRS both mail each other checks instead of using net settlement? What makes UBI different from standard progressive taxation and welfare?
- PeterisP 9y agoMost (all current?) welfare schemes have a disincentive for work because earning income disqualifies you from welfare, and getting a poor job can make you worse off even if the welfare amount is below the minimum wage, since going to that job often also does add extra expense (transportation, caretaker for kids and other dependents, etc). With unconditional basic income, however, all the job income is extra, which is a big difference in motivation especially for people who can't hold a full-time job because of health issues or having to take care of others. Furthermore, standard welfare systems don't handle structural unemployment well - they don't provide a long-term (decades, not months or years) means of support to able-bodied people that can't get a job. Historically, that wasn't much of a problem - able-bodied people could get a job if they really wanted most of the time; if there was an economic slump, then it went away in a couple years (and welfare could help ride it over), and if they couldn't get a job, then retraining was a solution. In the future, the situation is different, we should expect millions of people, eventually a majority of population, whose labor is economically unnecessary (it can be done by machines better if these people aren't allowed to participate) despite any reasonable retraining. This issue is(will be) new, and current methods clearly won't work. People respond to "carrots and sticks", and UBI brings a much more sensible set of "carrots and sticks" than progressive taxation + classic welfare.
- closeparen 9y ago>all the job income is extra If a realistic working person's income tax liability is going to be a substantial portion of or greater than the UBI allocation, UBI is really just unemployment insurance and the disincentive to work remains. We already have a "basic income" for working people: (personal exemption + standard deduction) * (marginal tax rate). Working people are still net taxpayers. Making them not net taxpayers is just sharply increasing the progressiveness of the progressive taxation scheme, i.e. standard liberal/Democratic politics since forever. I'd support reframing the standard deduction, personal exemption, child tax credit, etc. as refundable credits, but this is only "income" at the bottom of the distribution.
- pogimabus 9y agoI'm getting really tired of seeing this argument at the top of every single thread about a UBI experiment, as if: 1. There are no other concerns that we can gather info about besides "UBI might cause so much inflation that it cancels itself out" and 2. Nothing can be learned from these experiments unless they prove that the concern in #1 is unfounded. This is just obstructionism. Using less than 100% accurate simulations to attempt to predict the outcome of implementing actions and to inform our choices has been common practice since the dawn of civilization, there's no reason that the tool is suddenly completely useless in this particular situation. This isn't a "hard science". We have massive problems with poverty and economic inequality in our society and statements like these only serve to stop the conversation that potentially leads to solving them. Why do people seem so stubbornly against seeing if a UBI works?
- dragonwriter 9y agoThe “U” in “UBI” usually stands for “Unconditional” (not behavior- or means-tested), not “Universal”.
- johnchristopher 9y agoThis really does sound like FUD to my ears.