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Universal Basic Income Explained – Free Money for Everybody? [video]
- sharemywin 9y agoI still don't see how UBI doesn't cause inflation enough to offset any benefit(in the near term ie before robot job apocalypses).
- bryanlarsen 9y agoInflation is a monetary phenomenon. As long as you are paying for UBI through taxes rather than by printing money, there shouldn't be any overall inflation. Certainly there will be price adjustments: the prices of some things will go up while others will go down. But that definitely wont "offset any benefit".
- dmm 9y ago> Inflation is a monetary phenomenon. Is it? The US monetary base has more than tripled since 2008 but inflation since then is only 14.6%. For comparison between 1999 and 2008, the us monetary base increased by about a third and inflation between those years was around 29%.
- craigkilgo 9y agoInflation being a monetary phenomenon is the technical definition of inflation. When you mention the 14% number, that is based on market price for basket of goods which is not technically inflation (under the definition used by economists, not the definition used by journalists).
- dmm 9y agoSo if bought inflation-protected securities from the us treasury, they would have paid >300% from 2008 to now? Or does the us treasury use the journalist definition of inflation?
- mcguire 9y agoEconomic definitions are abstractions built for mathematical tractibility while creating formal models.
- colorint 9y agoThe technical definition of inflation is raising prices. It's only a strictly monetary phenomenon if output and velocity are fixed with respect to the money supply. In other words, inflation meaning "more money" is only a technical definition in the kooky world of monetarism.
- sharemywin 9y agoThat's assuming the people getting taxed are spending less on the same things (in the CPI) that people that are getting a surplus benefit are spending more on. Otherwise the rich are investing less and the poor are spending more on consumption. asset prices go down cpi goes up.
- mcguire 9y agoMaybe, maybe not. I can see a situation where necessities increase in price, leaving low income household in the same position they have now.
- skybrian 9y agoNecessities would go up in price only if increased demand isn't matched by a corresponding increase in supply. There's little reason to believe that's the case except when the market can't adjust in time, and that's temporary. If Walmart sells more, their suppliers will make more, and the economy does better.
- thriftwy 9y agoBecause many (most?) markets are buyer's markets. You try to increase prices, you are out of business which is eaten by competitors.
- sharemywin 9y agoif everyone's costs go up everyone will be forced to raise prices.
- skybrian 9y agoTo some extent, but labor generally isn't 100% of the cost, so it's still a win. If wages go up due to people having more and better choices in life, isn't that a win?
- thriftwy 9y agoWhy would their costs go up?
- sharemywin 9y agolabor costs go up because labor supply goes down.
- thriftwy 9y agoThis depends. In many locales, labor supply might go up as people come for cheap homes to live on UBI, and then look for auxiliary work.
- wu-ikkyu 9y agoMaybe using a resource based UBI rather than a money based UBI could help avoid this problem?
- jandrese 9y agoUBI is a fancy way of saying "take from the rich to give to the poor". It has to be combined with a progressive tax system to make sense. This isn't even a bad thing from an economic standpoint. Capitalism has the problem where wealth tends to accumulate upward naturally (rich get richer just because they're rich and have a bit of financial sense) and eventually starves itself of demand. Re-injecting cash in the low end keeps the economy moving despite this natural tendency. UBI has the advantage of low administrative overhead too, so more of the money gets used on goods and services. Also, unlike Welfare there is no perceived disincentive to work. That said, UBI has its problems. Prices at the low end are likely to go up simply due to lack of workers. If you have UBI why would you do backbreaking manual labor all day for minimum wage? To really work well it has to be paired with increasing automation of low end jobs to offset the labor imbalance, otherwise you end up with inflation as people are forced to pay higher wages to fruit pickers, fry cooks, etc... in a competitive job market. Or more likely, those jobs will move overseas at an increased rate to countries where the labor market is skewed towards employers and they can pay people well below the value they generate.
- skybrian 9y agoThis supposed problem of higher wages would also be an argument against raising the minimum wage, and yet many people are in favor of that because they think low wages are the problem. If UBI does indeed raise wages at the low end, it's because people have more options in life and made their own choices. Seems like a good thing, no? More generally, inflation is usually a bad thing, except in the labor market where it's a good thing. If wages go up and the overall price level doesn't go up as much, that means people are earning more without their expenses going up as much.
- jandrese 9y agoIMHO our current economy has a lot of slack in it. We could easily increase minimum wage without noticeable inflation because people are being squeezed from so many different directions. We've let the minimum wage lag behind overall economic growth for too long.
- notzorbo3 9y agoI still haven't found an solution anywhere for the following problem: Living (not just housing, but everything) expenses are a lot less for dual, or even triple, income households than for single people. So there's going to be a lot less pressure on dual income households to work beyond their basic income. Logically, this would put double (or even triple) the additional pressure on single income households. Under UBI, they'd have to provide enough in taxes to provide the UBI for themselves AND dual income households. How do UBI proponents solve that problem?
- Hello71 9y agowhy is it a problem?
- SapphireSun 9y agoI think this question is only answerable with specific numbers. If UBI = $1 / person, then the difference in pressure is small. Also, you presume that people only work for money. I think with UBI, you'd see a revitalization of community oriented, but low profit pursuits.
- notzorbo3 9y ago> If UBI = $1 / person, then the difference in pressure is small. The pressure might be small, but it's still there. The €1 still has to come from somewhere. > Also, you presume that people only work for money. I think with UBI, you'd see a revitalization of community oriented, but low profit pursuits. How are low-profit pursuits going to pay for everybody's UBI? You can't heavily tax low-profit pursuits.
- delecti 9y agoThe premise of UBI is that not everybody needs to work. It's not that everybody will move towards low-profit pursuits it's that otherwise unemployed people will. The taxes will come from the same places they are expected to: automation increasingly taking over the creation of most of the wealth in society. We'll see if it works in practice, but that's the theory.
- calimac 9y agoDoes anyone here want to wake up and realize that money is a store of value. Universal income would be a quantum leap in which the laws of market forces will attempt to absorbe and destroy. Some really smart people need to figure this out.
- exabrial 9y agoFirst line: "What if the state covered the cost of living?" Who is paying for the income? It's not "The state". It's everyone else, by taxation. You're telling people you have a right to seize their earnings for their labor. You're literally taking someone else's money, and giving it to someone else. UBI is nothing but people ignoring the moral problems of seizing assets and saying "The end justifies the means." If a billionaire philanthropist wants to sponsor UBI voluntarily, that's a different matter. Or if you want to donate to a charity that funds UBI, please do. It'll be an interesting economic experiment. But taking assets from people and giving them to another person is wrong, no matter how good the outcome is.
- sbjustin 9y agoI'm not sure why this is being down voted as this is a matter of opinion - an opinion that many agree with. In fact, in the US there is nothing in the constitution that supports the taxation of the people for these programs. I'm all for UBI actually but this opinion is still valid.
- jandrese 9y agoBecause capitalism doesn't work without taxation, not in the long term. This probably sounds weird to most people, but it is the truth. In capitalism money naturally accumulates at the top, but the whole system depends on money changing hands regularly. It's the essence of the economy. With no taxation all money ends up at the top with people who have nothing to buy, the system grinds to a halt and you have total economic collapse. In order to keep the system working the rich needs to keep feeding money back into the bottom so it can trickle back up to them. Human nature being what it is, you can't expect people to do this on their own. A few (Bill Gates for example) will, but in the majority of cases they would rather sit on the money so it can make even more money for them. Giving to the poor is not "fiscally responsible". Plus it would be very inefficient to make every multi-millionaire/billionaire/multi-billionaire manage their own welfare system. That's why it is the government's job to redistribute wealth downward to keep the economy healthy. We have endless examples of governments that failed to do this and ended up with stagnant economies and endless economic depression. Look at feudal European economies for example, where the lords hoarded the cash and left charity to the church. If you want to see this in person, crack open a game of Monopoly. The winning state in Monopoly is total economic collapse where one person has all of the money and nothing to spend it on. If you want to make it more realistic start the game with one player having $20,000, two with $200, and everybody else with $1. That's how real life economies are. If those $1 players lose tell them they didn't work hard enough and that they should pull themselves up by the bootstraps.
- PatientTrades 9y agoUniversal Basic Income is necessary for humanity to reach to higher goals in their evolution. Wasting 8-10 hours of the day doing a job that robots could do much better is not the best use of human intelligence. Imagine the discoveries and inventions that would happen if humans could devote all of their time to their passion. The benefits drastically outweigh the minuscule downsides
- IncRnd 9y agoWould UBI be available only for citizens or everyone living within the borders? Thoughts?
- delecti 9y agoIdeally eventually it will be truly universal (at least on a global scale). In the short term, the question of "citizens only?" is a pretty big complication. It means countries that start UBI sooner will be incentivized either to discourage or restrict immigration, or to limit it to citizens.
- fpgaminer 9y agoWhen it comes to UBI, there's an interesting psychological phenomenon. I believe that McDonald's and similar establishments could have automated away the vast majority of their work force years, maybe even decades ago. And yet there are still people working there. In fact, McDonald's is often viewed as many people's first entrance into the work force, and as a safety blanket if anything goes south (well worst case at least I can go work at McDonald's or something). In other words, I believe McDonald's and its kin are a form of social welfare. We see this elsewhere, in less subtle ways. Tons of jobs that shouldn't exist, but which are kept afloat by regulation designed specifically to preserve those jobs. We pay either higher taxes or higher pries to achieve both of these forms of social welfare. And yet, support for these jobs and social actions is generally quite strong. Hence why restaurants haven't fully automated themselves; the market would vomit at the idea of those thousands of jobs being replaced by machines. Regardless of whether that would save people an incredible amount of money, they are willing to accept those sacrifices in exchange for those jobs being available. In that light, what's the difference between what we have today versus UBI? Either you're paying someone to do functionally meaningless work, or you're paying them to do "nothing". Under the former, their work is _truly_ meaningless. Under the latter they at least have the chance to do something beneficial for either themselves or others. Personally I haven't formed a real opinion of UBI. Even in light of the above arguments, the complexities make it a problem not so easily reasoned through. But I suppose my point is that UBI isn't as drastic a step as many imagine it to be. It would be more of an evolution of our existing, de-facto social welfare programs. EDIT: Addendum: When I use the term meaningless here I'm really just using it for the sake of argument. Obviously no one's work is meaningless. Just because a machine could do the exact same job that a human can do, doesn't mean that the task, as performed by a human, is meaningless. The true thrust of my argument is that a human performing the task subtracts value from the economy relative to a machine doing the job. It's sub-optimal.
- lev99 9y agoA UBI of $12,000/year given to every adult by the goverment would double the annual government expenditure. That is fine, but we should have a talk about how the program is funded. This is one of the reasons I prefer talking about negative income tax. Yes, the concept is more complex, and has a worse acronym, but it is largely self-funded.
- peterwwillis 9y agoTake it out of the 576 Billion dollar defense budget that makes up more than half of all federal spending?
- aaron-lebo 9y agoThat's not 3 trillion dollars.
- peterwwillis 9y agoCorrect. The defense budget could not pay for it all, but it could contribute a sizeable chunk. A gradual buildup using the funds available (say half, about 288 Billion) could be done, infusing more money into the system and growing opportunities for people to improve their economic standing. At the same time you'd need to gradually pressure corporations and wealthy individuals to shift investment back into US-based work instead of imports and shifting jobs overseas. Basically, redistribute wealth very very slowly, and work trade deals to subsidize the production of our own goods until their price becomes competitive again (because we're not going to build electronics cheaper than the Chinese any time soon). But you'd have to base all this around trade deals, because globalization will just eventually crush our poor, which will keep increasing in number.
- ihm 9y agoYou could start with the Republican’s 1.5 trillion dollar tax break for the wealthy, and also the defense budget as the other commenter mentioned.
- bjt2n3904 9y ago> There would be still be very rich and poor people, but we could eliminate fear, suffering, and existential panic for a substantial part of the population. #6m28s I actually laughed when I heard them say this, given their videos on things like the Fermi Paradox.
- ghostbrainalpha 9y agoCan you break that down a little more? I'm having trouble connecting those two statements.
- bjt2n3904 9y agoMany of their earlier videos (before they started to do "What If" videos a la XKCD) focused on the confusing, absurd, and seemingly meaningless existence of humanity -- so much so, that they made a video on "Optimistic Nihilism". They're quite reserved in the statements that they make, as well. They won't say life is meaningless, only that we haven't found something we truly agree upon as meaningful, and given that the universe is headed towards big crunch / heat death, what does it all matter? Given those two points, I found it amusing that they'd go so far to say that simply giving someone $1000 a month COULD resolve misery, suffering, and existential angst. It seems to fly in the face of their ethos.
- rev_bird 9y agoI think "existential panic" in this case maybe isn't referring to existentialism, but... existence? Like if you aren't going to have food tomorrow, and there's no solid prospect of figuring out how to get food the next day, that's a panic fueled by the desire to continue to exist. It's kind of an imprecise term in this case, but that's what I took it to mean.
- hypertexthero 9y agoHere's a good FAQ on Basic Income: http://www.scottsantens.com/basic-income-faq http://www.scottsantens.com/basic-income-faq
- lumberjack 9y agoWhat a dystopian future. So then, 99% of the population will be powerless, barely subsisting, as if they were rabbits in a cage in the pet store, while the remaining 1% own the entire world.
- shams93 9y agoIts not even going to turn out THAT nice. The new tax cuts assume that the poor will always be working, but between the loss of net neutrality and the automation of driving jobs we're looking at the loss of 95% of male work within the next 10 years. But the rich have divested themselves from society so state and local government will break down and most likely when you lose your career you will land in a concentration camp. The only working class jobs will be capturing torturing and executing the former working class.
- rev_bird 9y ago>between the loss of net neutrality and the automation of driving jobs we're looking at the loss of 95% of male work within the next 10 years I'm pessimistic about the same legislative issues you are, but what on earth does this mean? "Transportation and warehousing" accounts for 3.2 percent of all jobs in the U.S. and is actually projected to hold steady between now and 2026.[1] What does net neutrality have to do with anything? Is this... a real comment? Do you really think they're going to send all the boys to concentration camps because their jobs got taken by self-driving cars? [1] https://www.bls.gov/emp/ep_table_201.htm https://www.bls.gov/emp/ep_table_201.htm
- thriftwy 9y agoSo, do you have other kinds of future to offer?
- Joeboy 9y ago(in the context of first world countries with functional welfare states) I'm deeply skeptical of the idea that we're going to get some sort of new deal where the rich are suddenly happy with increased subsidy of the poor, in return for increased social cohesion or whatever. The rich generally resent paying taxes and avoid it where possible. Why are they suddenly going to be happy to pay more tax, to subsidize people who have no specific need for the subsidy? Supposing the US replaces its welfare system with basic income, surely the next thing that happens is that the rich buy a government that guts or kills basic income (which is, by definition, not needed). I suspect if you want the rich to pay for this you're going to have to be prepared to go full French revolution. I'm glad the video briefly touches on this question, but I find it frustrating how much of this debate focuses on the silly question of whether receiving free money morally taints people or whatever. Edit: I mean, one of BI's highest profile advocates is Mark Zuckerberg. Does Mark Zuckerberg seem enthusiastic about paying tax?
- thriftwy 9y agoMy take: most of moneys nowdays go not to "the rich" but to various bubless and financial whirpools. It is possible that the rich would not oppose trading the depressed economy where the only thing growing is bubbles to healthy economy in which they get to keep relative wealth compared to their peers (albeit with smaller gap versus median person).
- rev_bird 9y ago>I suspect if you want the rich to pay for this you're going to have to be prepared to go full French revolution. The real challenge is decoupling capital from political power. Otherwise, yeah, why would the rich just sit and watch it float away? If "more money" continues to translate so literally into "more influence," it's pretty hard to blame the rich for using their money to influence the government in ways that will help them continue to keep their money—at that point, it's just an investment. Of course, this kind of supposes that the working class wouldn't vote to do that on their own. Given the recent trends in American politics, I've stopped making too many assumptions about the weird decisions we make as a group.
- rpiguy 9y ago
- b6 9y ago5:23 ... many argue that it might be time to distribute the spoils more evenly to preserve the social peace. This does not come from principles. It sounds like a stickup.
- rev_bird 9y agoWorkers have been generating increasing productivity for decades—Americans have never created more wealth. Yet wages have stagnated, companies have trillions of dollars squirreled away, and the richest families in the country have more money than many millions of the rest of us. Who's getting robbed?
- b6 9y ago> Who's getting robbed? Is it the really the case that anyone is being robbed?
- DoreenMichele 9y agoIf you want to see a solid critique of practical challenges facing UBI that most proponents do not really address, I highly recommend this piece: https://medium.com/@simon.sarris/after-universal-basic-income-the-flood-217db9889c07 https://medium.com/@simon.sarris/after-universal-basic-incom...