14 ms·

12-year study will look at effects of universal basic income

224 points by denzil_correa 8y ago

mey 8y ago
Title should include the word "will" as it is just getting under way. No conclusion yet.
- _Codemonkeyism 8y ago
  Or 'should' :-)
- jasonmaydie 8y ago
  it's grammatically correct, albeit misleading
  - mey 8y ago
    I didn't have an issue w/ the grammar, but the misleading description. :) It's a significant difference between a study starting and having a conclusion (or even partial data). In my mind, it's the difference between clickbait and non-clickbait headline, even though the article is very interesting. This is at the University PR section of http://phdcomics.com/comics/archive.php?comicid=1174 http://phdcomics.com/comics/archive.php?comicid=1174
    - jasonmaydie 8y ago
      misleading as in people think that the study starts when the trail ends, when in practice the study starts when the trail starts (because people aren't aware of this)
- sctb 8y ago
  OK, we've added a “will”!
crsv 8y ago
I'm not sure if I'm understanding this correctly - maybe I'm missing something significant here, but it says they're giving people 75 cents per day per person? How is ~273 buck a year going to provide any kind of valid measurement? Even at poverty levels of income, you're not talking about an amount of money that reasonably effects anyone's social mobility. I'm having a hard time understanding how this providing even an academically interesting insight into the effects of UBI. Am I missing something big here?
- RubenSandwich 8y ago
  From my understand this is going to the poorest of the poor in Kenya, because the median Kenyaian monthly salary is ~800 USD.[1][2] So this UBI experiment does not seem to be for the average population, more as a form of welfare. Still interesting and meaningful research, but not the long term UBI experiment many are waiting for. [1] http://www.salaryexplorer.com/salary-survey.php?loc=111&loctype=1 http://www.salaryexplorer.com/salary-survey.php?loc=111&loct... [2] https://duckduckgo.com/?q=80%2C000+KES+in+usd&t=osx&ia=currency https://duckduckgo.com/?q=80%2C000+KES+in+usd&t=osx&ia=curre... Edit: Source [1] seems to be unreliable. See below comment: https://news.ycombinator.com/item?id=17013632 https://news.ycombinator.com/item?id=17013632. So while the number is wrong, it does seem that this UBI is still targeting the poor.
  - crsv 8y ago
    Thanks, somehow I missed that, this makes much more sense but then raises some fundamental questions regarding the potential pigeon holing of UBI as a tool whose efficacy is primarily shaped by the state of the economy in which it is deployed (ie this study is highly dependent on the underlying economy being that of a severely under developed nation state).
    - jerf 8y ago
      Maybe I'm being slightly too cynical, but that's pretty much inevitable. A great deal more "scientific knowledge" than you'd probably be entirely comfortable with knowing involves taking a point sample of some space and applying it way, way away from where the sample was actually taken. If this study succeeds, then you can expect the HN commentariat to be citing how BI has been scientifically proved to be a good idea until the end of time, and if this study fails, the opposite. Even better, there's really two types of BI going on here. One is as a mechanism for poverty alleviation, by getting capital to people who have none. Not just "not much", but none. The other is as a solution to the as-yet mostly future problem of the work force being automated out of existence in every industry that people below a certain IQ threshold can work productively in. Expect those to be conflated freely, even though in my opinion they're two different problems. (If you squint really hard, yes, they blur together, but don't ignore the fact that you're squinting.)
jasonmaydie 8y ago
To me it seems like the only way to make a true study is to do it on a self-sustaining population, in other words very little to no outside money. The cost saving by the community should fund the income rather than the general population funding a tiny population. That will always work. It is generally agreed (and obvious) that a universal income is beneficial the crux remains though how we pay for it.
v_lisivka 8y ago
IMHO, they should compare their results with Kiva. Kiva provides zero-interest loans, so donations are not wasted, but used to create sustainable economic society. Give fishing rod, not a fish. https://www.kiva.org/ https://www.kiva.org/
- v_lisivka 8y ago
  Can anybody explain that downvote? 8-[ ]
  - deleted 8y ago
    [deleted]
  - wolco 8y ago
    Not a downvoter but the post feels off topic
- notahacker 8y ago
  I'm not responsible for the downvote, but it's worth pointing out that whilst Kiva donors do not receive interest, most Kiva loan recipients pay relatively enormous interest rates (administering loans is expensive, even for the microfinance institutes which aren't trying to make a profit). There are undoubtedly beneficiaries who make good use of the credit, but also some losers and question marks about how sustainable it actually is... FWIW there's also YC's Zidisha in the microlending market which cuts out the middleman (but still charges interest)
  - v_lisivka 8y ago
    AFAIK, most of these money staying in the country, creating additional flow, so I see no problem with that. It's much easier to return money, when you have business. For example, I heard about 3d printer group with rule: we give you 3d printer printed parts for free, but, when you will assemble your own printer, you must print 2 kits and donate them to others. From consumer perspective, it's 100% of interest, but from 3d printer hobbyst perspective, it's not a problem at all, because they will have printer, which will print them parts. Business is like a printer for money. Positive outcome is not guaranteed, of course, but fear of loss, as shown by some losers, drives majority to success.
rumcajz 8y ago
For those who are not aware, GiveDirectly is a charity, not some kind of government agency. If you are pro-UBI, put your money where your mouth is and help with the experiment by donating.
- dragonwriter 8y ago
  It's quite possible to be pro-UBI but not think that exogenous charity provides a decent model for studying UBI, which is an endogenous transfer program, or that Kenya is a relevant model for the kind of places one is most concerned about implementing UBI.
SlowRobotAhead 8y ago
Didn’t Finland just roll their UBI experiment back? If I remember correctly they tried it on the small sample it didn’t have a meaningful impact and they calculated it would be too expensive to try the whole country, but I could be meant remembering wrong.
- hrnnnnnn 8y ago
  No, it's continuing until its planned end date. http://www.kela.fi/web/en/-/contrary-to-reports-the-basic-income-experiment-in-finland-will-continue-until-the-end-of-2018 http://www.kela.fi/web/en/-/contrary-to-reports-the-basic-in...
- joemaller1 8y ago
  Yes, you did read that: http://www.bbc.com/news/world-europe-43866700 http://www.bbc.com/news/world-europe-43866700 Though there was an attempt to walkback or reframe that article: http://www.kela.fi/web/en/-/contrary-to-reports-the-basic-income-experiment-in-finland-will-continue-until-the-end-of-2018 http://www.kela.fi/web/en/-/contrary-to-reports-the-basic-in...
  - theptip 8y ago
    > Finland's two-year pilot scheme started in January 2017.. But it will not be extended after this year Sounds slightly different than the parent's phrasing -- the trial was not "walked back", they just decided not to invest more money in it. Given that the research hasn't been completed, it seems perfectly reasonable for the government to decline to extend the trial; I'd think it sensible to wait until they have analyzed the results before making any decisions (unless they have already seen some early data). > "The employment effects across the whole experiment will be available by the end of 2019 or at the beginning of 2020."
- tobiasSoftware 8y ago
  One of the big differences between the experiments that Finland did and actual UBI is that UBI is supposed to replace all kinds of monetary welfare. It sounds like the experiments in Finland failed because of the cost, but it's really hard to try that small scale, because many of the cost benefits of full scale UBI come from being able to shut down all of the overhead of various welfare programs.
jeffdavis 8y ago
As with most economic questions, science is very difficult and limited in what it can tell us. That's because economics is a social science, and you never know exactly how people are going to react. A study of one culture might not apply to another, and a study in one timeframe might not apply to another. So we will probably see a lot of "hmmm... that's interesting" kinds of things that might not be repeatable. And lots of good and bad effects may be unmeasured or unmeasurable.
- darkmighty 8y ago
  Your claim is also largely true for drug trials. There is also huge variability due to genetics, cultural placebo response, variations in diet among cultures, cultural or individual symptom expression, and so on. Every science faces an enormous amount of confounding variables. Doesn't mean we should stop doing drug trials, or economic trials in this case. Well designed experiments can be informative, even though care must be taken to generalize them.
  - notahacker 8y ago
    This is very true, but it's also true that the inappropriate generalisation of this experiment seems to have started with the press release! If somebody announced a drug test that didn't look at symptoms or benchmark against placebo effects was "testing a new cure", people would rightly point out it was doing no such thing, just as an evaluation of how people in extreme poverty react to charitable handouts doesn't really tell us much about the effects of redesigning the Western welfare state on UBI principle that taxpayers really ought to subsidise wealthy early retirees and housewives on exactly the same basis they subsidise the desperately seeking work and disabled.
  - ksk 8y ago
    >Your claim is also largely true for drug trials. There is also huge variability due to genetics, cultural placebo response, variations in diet among cultures, cultural or individual symptom expression, and so on. I work in pharma (biologicals) - though not as a scientist - and you're overstating the differences. The genetic variance of humans is within a very narrow band. The superficial differences are not relevant to the vast majority of pharmaceutical products. In any case, how our human biology reacts to pharmaceutical substances is VASTLY different from humans' economic and social interactions. You know to a very high degree of certainty how an antigen will produce an immune response much much more than how pricing your headphones at 50 dollars will get you more customers, or raising wages by 10% will give you a 20% increase in productivity. >Every science faces an enormous amount of confounding variables. I don't think (macro)economics/human psychology are sciences. Aside from my own opinion, it is certainly debatable - Unlike biology and physics which are firmly in the science camp.
triviatise 8y ago
motivation to work is non linear. With low UBI amounts people dont starve, but still have incentive to work. One of the biggest problems with welfare in the US is that you lose benefits that are equal or greater to the amount you make from work, when you start to work, so there is a huge disincentive to work. If UBI was implemented in the US, 100K would make most people lazy and have them drop out from the workforce, but would 5K? A more likely outcome is inflation which results in whatever dollar amount the UBI starts as, effectively moving close to $0 as prices rise.
- Retric 8y ago
  The inflation impact from UBI should be non existent as the money is taxed from other parts of the economy vs. being created from thin air. Social Security for example is not a huge driver of US inflation it's simply moving money from pocket A to pocket B.
  - _rpd 8y ago
    I think this conflates monetary inflation with cost inflation. A universal one time increase in income will likely be absorbed by an increase in the cost of housing unless there is a mass migration from urban to rural areas.
    - Retric 8y ago
      UBI is not a universal increase in income. Moving money from group A to group B means group A has less money. So housing prices might shift with some price decreases largely offsetting price increases in other areas. Inflation is a different effect where there is a net price increase.
  - dragonwriter 8y ago
    > The inflation impact from UBI should be non existent as the money is taxed from other parts of the economy vs. being created from thin air. Since demand profile and propensity to consume are not consistent across all sectors, transfers of income from one sector to another can reasonably be expected to have effects on general and particular price levels. Generally, a downward transfer should have some positive first-order effect on inflation. There's good reason to expect this to be modest compared to the size of the transfer so that the recipients have increased buying power just slightly smaller than the pre-transfer prices would suggest. (OTOH, given the existence of actively managed monetary policy that targets inflation, that first-order effect should itself largely just change the landscape for fiscal policy, translating into less net effect on inflation than without monetary policy and higher interest rates.)
jfasi 8y ago
I'm glad this study is happening and I'm excited to see the outcome, but I feel like I ought to caution people who are expecting this to add this to their arsenal of pro- or anti- UBI arguments in western countries against comparing apples and oranges. My personal prediction is this study will show substantial gains in economic outcomes, health, social standing, etc for all groups that receive money. I'm guessing UBI proponents will leap on the opportunity to advocate for similar programs in western countries. If my prediction is wrong, I'm guessing opposite will happen. I caution that either conclusion would be unjustified because this is not a UBI experiment, this is a charity and aid distribution experiment. The question at hand here isn't "is UBI a wonderful thing" but rather "how do UBI-like distribution methods compare to others?" If you want proof consider that Tavneet Suri's isn't a UBI economist focusing on western countries, "her expertise is as a development economist, specialized in Sub-Saharan Africa" [1] I object to labeling this as a UBI experiment. "Universal Basic Income" is used to describe various proposals to address inequality and unemployment in developed countries where economic gains and jobs are being automated away from the masses of low-skilled workers and up to the elite of high-skilled workers. This is far from the sub-Saharan African context where the economy is still developing and leaders are mulling how best to sustainably extract countries from extreme poverty. [1] http://mitsloan.mit.edu/faculty-and-research/faculty-directory/detail/?id=41285 http://mitsloan.mit.edu/faculty-and-research/faculty-directo...
- ataturk 8y ago
  As someone who is friends who two different social workers and related to someone in family court diversions (think: parents getting their kids taken away and want them back) I can tell you that UBI isn't going to solve much of anything. These people have money to buy alcohol and cigarettes, and yet their kids go hungry and rely on school lunch programs, etc. Also, I had a brother in law who was a raging alcoholic and stole money from his grade-school kids' piggy banks. He always had money for beer. Asshole. He did the world a favor and hung himself. For all of them, their personal issues overwhelm their ability to be functional adults. They don't clean their houses, they don't mind their kids, they are addicted to various substances and lie about treatment, recovery, and lie about anything anytime it suits their needs in the moment. It's all lie, lie, lie. There is nothing a UBI or anything else is going to accomplish for these people and it is a myth to believe that payments without oversight or qualifications will lead to positive outcomes. One would think the US's 50 year experiment with welfare would already provide more than enough data to prove that if you subsidize a behavior you get more of it. Let people face death, then see how they act. Take their kids away, first, though. It's not the kids' fault their parents are deadbeats.
ddingus 8y ago
I would much rather we have a jobs program. Anyone who needs work can get it at $15 per hour and up, depending on what the job is. There is a whole lot we need doing. If we do that, we are worth more, and we get something meaningful in return for a direct economic stimulus. Our infrastructure needs refurbished. Our homeland needs a cleanup, and could really benefit from some care and feeding. Our parks can be improved, making them attractive in the same way we did before. I don't feel UBI makes sense. It's just a payoff, and it's real value will be diluted. Too easy to just adjust it up or down to throttle work needs, buying power.
- JoeAltmaier 8y ago
  In some countries, rising automation means there are no jobs to be had, or that skilled persons fall down the ladder until they're working unskilled jobs. We pretend its 98% employment, but folks with degrees are working food service. A 'jobs program' in this environment is doing no good. There are already 30M people in service jobs (The lowest paid), and they're being automated away right now. We can't retrain them all to be engineers; we don't even need 30M more engineers. What are we to do? The solution won't be 'do what we did before' because, we've never been in this situation before. Oh, wait, in England they were in this situation when weavers were replaced by textile mills. Their solution: let the weavers starve and die. Maybe not the answer we want today.
  - josefresco 8y ago
    "In some countries, rising automation means there are no jobs to be had" Source on this claim? Interested in the topic and would like to read more.
    - JoeAltmaier 8y ago
      In the US, automation is growing explosively. When factories 'come back to the USA' from India or China or wherever, its not because they're paying enough to attract Americans; its because they automated and don't need (hardly) anybody. Further, bank teller and fast-food worker are the next to be automated away. Its happening everywhere, with touch-panel counter service.
dharma1 8y ago
I wonder what size a community needs to be for UBI to function in a self-sustaining way. I'd like to see some game theoretical research into it too if anyone has pointers?
- MrZongle2 8y ago
  That's a good question. By the same token: is there a maximum community size that can support UBI?
  - dharma1 8y ago
    Quite possibly, things like distance and number of participants would most likely change the dynamics. That's why I was wondering about the game theory part, so it could perhaps be modelled and tested in software. Running large scale UBI experiments is pretty slow and expensive, so tuning the parameters in the real world to make it work is going to take a very long time and cost a lot of money.
    - airstrike 8y ago
      How exactly do you plan on modeling how people are going to behave after receiving the aid? That's what these real-life experiments are trying to do in order to inform their models. It's not like economists don't know how to build models...
      - dharma1 8y ago
        I don't know what I would model or how - that's why I was asking for pointers :) And I in addition to economists, I would be interested in seeing contributions from physicists, computer scientists and machine learning researchers. This paper was super interesting - https://arxiv.org/abs/1706.03058 https://arxiv.org/abs/1706.03058, as was this - https://arxiv.org/abs/1803.06376 https://arxiv.org/abs/1803.06376 But would like to see UBI specific papers.
tribune 8y ago
Any UBI study that doesn't include everyone in a society is not studying "universal" basic income at all. It's just giving some people money. It would be very surprising if this didn't yield positive outcomes for that group. The big question marks surrounding UBI involve its implementation at a society-wide level. (What are the macroeconomic effects? What if people blow their UBI on dumb things and still end up starving?) Anything short of UNIVERSAL experimentation will not address these.
- collyw 8y ago
  I do agree, but this seems a step closer than everything else that has been labeled a UBI experiment before.
- commandlinefan 8y ago
  Not only that, but I don't believe (correct me if I'm wrong) that any UBI skeptics would argue that UBI wouldn't "help" the people who received it in the short-term, like in a 12-year-period, but that it's unsustainable in even the lifetime of a single generation. It's more like social security, which was a great deal for the first generation that started receiving it, but is getting more expensive and less beneficial with each passing year.
- tobiasSoftware 8y ago
  The other big question is about the cost side of it. True UBI claims to be able to not be that costly, as it will enable the shut down of all monetary forms of welfare. The resulting unemployment of those employees working welfare related jobs shouldn't even be that concerning, because then the benefit side of UBI would kick in for anyone unemployed. How you study all of that on a small scale is a mystery, as it seems to me that UBI is nearly impossible to bootstrap and will just have to be tried full force at some point with some limited studies as guidance.
- stale2002 8y ago
  I see this argument brought up, a lot, but the problem with it is that it is unfalseifiable. If UBI is so great, then similar "almost UBI" proposals should ALSO show good results. I sincerely doubt that there is a magic line between "similar but not UBI" programs and "UBI" programs where the good stuff immediately appears. If UBI is impossible to test, then we shouldn't do it. It would be insanely risky to spend trillions of dollars on something that its proponents claim can't be tested. So we should just not implement it in the first place.
austincheney 8y ago
https://en.wikipedia.org/wiki/Basic_income https://en.wikipedia.org/wiki/Basic_income The concepts of social welfare really make me want to visit the Scandinavian nations to see how they get it right and how it is compatible with their their social culture. As an American I really don't see social welfare working the US without dramatic shifts in the social culture. I also see taxation as a huge factor. The US needs to eliminate income tax in favor of other tax programs. The state of Texas has high property taxes but no state income tax and the results to the state economy are fantastic. Wealthy people can deduct all manners of things from income taxes, but there are exceedingly few deductions from property taxes. It naturally punishes the wealthy more, such as the goals of a graduated income tax, since it is a percentage set by the local city against the value of the property. People who do not own property do not pay property taxes, so less wealthy people are naturally excused from such taxation. Property prices in Texas are generally low compared to much of the rest of the country, which means more people are capable of owning property and thus contributing to property taxes. For example the value of my house in Texas is the equivalent of the minimum down payment for a similarly sized house in California, which I could never afford. With a universal basic income more people would be capable of owning property, thus having a higher standard of living, and also thus further contributing to property taxes.
- ThrowawayR2 8y ago
  > People who do not own property do not pay property taxes, so less wealthy people are naturally excused from such taxation. The less wealthy have those property taxes rolled into their monthly rent, so I fail to see how you can make that claim.
  - airstrike 8y ago
    It should be evident that if the alternative is paying rent AND income taxes, then the less wealthy are relatively better off in the case of no income taxes.
- unpopular42 8y ago
  What makes you think Scandinavian nations got it right? I think it's a myth, albeit quite popular.
jlebrech 8y ago
I'd like welfare to be a system that gives people food, shelter, clothing and hygiene rather than "free money". also that shelter would allow people to run a business without fear of that free stuff being removed from under them. it would help battered wives/husbands and young adults get on their feet. would also help governments build those desperately needed (communal) homes that they promise.
IanDrake 8y ago
Whatever you think of UBI, you won’t be able to point at the results of this study and make any compelling argument that UBI works or doesn’t work. For UBI to be tested effectively it would, at a minimum, need be implemented at a national level and include everyone in that nation. For one, that is the only way to see the macro economic effects. Second, in this study the money falls from the sky. No one is being taxed to pay for the UBI nor is the currency being debased. In any case, if it works, people like me will point to these flaws. If it doesn’t work, the pro-UBI camp will have their set of flaws to argue. Finally, this study seems to suggest that ‘success’ is determined by what percent of people on UBI work. Instead they should be measuring people’s standard of living improvement, if they work or not.
not_that_noob 8y ago
If anyone has doubts about UBI, consider the great A/B (or rather B/W?) experiment the government ran as part of the New Deal. One group was provided subsidies for housing (analogous to UBI) and another was not - decades later, the initial modest help compounded to leave one group much more prosperous than the other. I'm willing to bet on the outcome of this study. https://www.npr.org/2017/05/03/526655831/a-forgotten-history-of-how-the-u-s-government-segregated-america https://www.npr.org/2017/05/03/526655831/a-forgotten-history... "African-American families that were prohibited from buying homes in the suburbs in the 1940s and '50s and even into the '60s, by the Federal Housing Administration, gained none of the equity appreciation that whites gained. So ... the Daly City development south of San Francisco or Levittown or any of the others in between across the country, those homes in the late 1940s and 1950s sold for about twice national median income. They were affordable to working-class families with an FHA or VA mortgage. African-Americans were equally able to afford those homes as whites but were prohibited from buying them. Today those homes sell for $300,000 [or] $400,000 at the minimum, six, eight times national median income. ..."
- tzahola 8y ago
  Subsidized housing is not UBI. Welfare is not UBI. EBT cards are not UBI. Also, these guys were just lucky that the government subsidized their homes in SF which experienced a tech boom 50 years later. Now imagine the same in Detroit.
- smsm42 8y ago
  What you describe in not UBI, it's discrimination. I think it's pretty clear that if you exclude certain group from preferable markets, and sideline them to be able to buy only second-rate and third-rate goods, then you'll find plenty of examples where they end up at a huge disadvantage. It's not a test of UBI, it's a test of whether restricting access to a market can hurt a group against which it is used. I think we can all agree that the answer to this question is a definite "yes" - but it has no connection with UBI.
dragonwriter 8y ago
> People who advocate for a universal basic income say it will be a way to pull people out of poverty. Skeptics think a universal basic income will act as a disincentive for people to work. IME, advocates tend to say it is a better way of alleviating the symptoms of poverty than means-tested benefit programs and that, compared to means tested programs, it provides greater ability to take advantage of (and less disincentives to) other existing means of lifting oneself out of poverty in the developed world. And skeptics and advocates both agree that it will reduce economic compulsion to work, but advocates argue that the reduction to structural disincentives and barriers to development and outside income involved in both means-tested aid programs and the trap that is necesssry-but-dead-end work would outweigh that in the conditions prevailing in the developed world. While it may be certainly interesting to study the different models of exogenous aid provided in the study here, I don't think it's particularly relevant, other than tangentially, to the core arguments regarding UBI because the design is wrong and the environment is wrong, and should not be viewed as a study of UBI so much as a study of charity models which might have some incidental relevance in discussions of UBI.
hartator 8y ago
Thinking not having money is the issue of Kenya is belatedly false. Corruption, wars, extorsions, won’t be solve by more “free” money.
programminggeek 8y ago
The problem with UBI is not the idea itself. It's the unintended consequences and edge cases. For example, it might be that UBI causes people to work MORE and die sooner at riskier jobs (like working oil fields). What is the net effect of that? Also, what if it doesn't do much more than inflate prices to the point that people still have to work just as much? Could it just reset the sort of "zero point" higher? What if people have an in-built need to work to have value in life? Would paying them not to work cause their life to lose its value and increase suicides or other negative behavior? Also, will people start having more kids to somehow get more UBI benefits? Large system changes mean serious consequences that go beyond the obvious. Anyone who has ever worked on a large software system surely have experienced this. I don't expect failure, but I do expect some seriously weird and unintended outcomes that are non-obvious.
ppeetteerr 8y ago
This is a great study and I hope it nets some value. UBI has already been tested in Canada and other areas of the world where it was abandoned. The outcome, I would guess, is very circumstantial. Perhaps in Kenya, where there is lack of infrastructure and high corruption, giving people money will result in greater improved quality of life over providing subsidized services. In Canada, I would argue that subsidized services (free healthcare, education, maternity leave, etc.) are more important as they guarantee that a person cannot possibility fall into the debt trap. Perhaps the ideal is something in between: cash (UBI) and services.
shireboy 8y ago
I think this article misrepresents "skeptics". "Disincentive to work" is really only one reason to be skeptical, and I'd argue not a good one. I'm more concerned about potential unintended consequences that wouldn't manifest in small scale studies such as this one. For example, suppose UBI leads to inflation after 5 years but only once it is truly national-scale. Small-scale studies may not even look at this metric, or be able find correlation if they did. By the time it was apparent, choice would be to roll it back and cause social upheaval, or continue inflation, both of which could hurt the people UBI is designed to help most. Obviously I don't have any data to know if UBI leads to inflation or not, but that's sort of the point. Ideally we'd have data on this and other effects beyond just "does it help individuals?", but those effects may be difficult to test.
- ksk 8y ago
  But your objection would apply to all economic policies. Why is this any different?
  - shireboy 8y ago
    Well, I do tend to hold that objection for lots of economic policies ;) Governments can be really bad at foreseeing things like this and slow at changing direction once they are detected. Obviously one can take that too far and do _nothing_ out of fear of unintended consequences. But to the degree we can think through those potential outcomes and devise ways to test for them, we should.
    - ksk 8y ago
      >But to the degree we can think through those potential outcomes and devise ways to test for them, we should. What are some of those ways to test it that you suggest? This study isn't focused on your particular concern of inflation.
      - shireboy 8y ago
        Right, it'd be really hard in this case. Only being armchair-level interested in UBI I'd have to be content hoping that real economists and UBI researchers would come up with ways to test or at least address the risk. Maybe there are ways to do computer models around that, or ways to structure a roll-out so that it is very clearly a "trial" until various macro impacts can be measured. Another way to test, at least in the US and similarly organized governments, is to rely on states to implement. 50 different parallel experiments measuring UBI vs no-UBI impact. The trick would be to measure fairly and transparently, and react without political spin and bias, which I don't really see happening soon. My other motivation for posting is hoping that reporters and other HN readers would see there is skepticism besides just "it'd make people lazy".
camdenreslink 8y ago
When studying UBI isn't it hard to control for the fact that only a small group is receiving funds, rather than every unemployed/underemployed person in the country (which would be the case if UBI became federal legislation)? As jobs are automated, we will need to do something...
- snarf21 8y ago
  I think the answer is yes. Also, if everyone just gets $X, will prices also rise by some Y close to X as people will feel less attachment to this $X as it was free? I've yet to see a truly thoughtful model of what all will happen. For example, UBI is said to replace all the bureaucracy of today's welfare programs. That is a lot of people that will lose their jobs, including the cycle of the people who used to supply goods and services to those people. Some of those companies will close and layoff more people, etc., etc. It doesn't go infinite but it definitely cascades. We can see proof of this in old steel towns or some place like Detroit. As good jobs dry up, it starts an economic slide.
stale2002 8y ago
One thing that I am surprised that nobody talks about, when discussing UBI is the fact that the USA already has UBI for a largish segment of the population. The US UBI program is called social security. It is just a check that is given to old people with which they can use for whatever they want. Why can't we study what this group of people does with their money?
- taysic 8y ago
  Having free money after a lifetime of working that you feel you contributed to seems different from having it available before you've worked before.

224 points by denzil_correa 8y ago

mey 8y ago

Title should include the word "will" as it is just getting under way. No conclusion yet.

_Codemonkeyism 8y ago
Or 'should' :-)
jasonmaydie 8y ago
it's grammatically correct, albeit misleading
- mey 8y ago
  I didn't have an issue w/ the grammar, but the misleading description. :) It's a significant difference between a study starting and having a conclusion (or even partial data). In my mind, it's the difference between clickbait and non-clickbait headline, even though the article is very interesting. This is at the University PR section of http://phdcomics.com/comics/archive.php?comicid=1174 http://phdcomics.com/comics/archive.php?comicid=1174
  - jasonmaydie 8y ago
    misleading as in people think that the study starts when the trail ends, when in practice the study starts when the trail starts (because people aren't aware of this)
sctb 8y ago
OK, we've added a “will”!

crsv 8y ago

I'm not sure if I'm understanding this correctly - maybe I'm missing something significant here, but it says they're giving people 75 cents per day per person? How is ~273 buck a year going to provide any kind of valid measurement? Even at poverty levels of income, you're not talking about an amount of money that reasonably effects anyone's social mobility. I'm having a hard time understanding how this providing even an academically interesting insight into the effects of UBI. Am I missing something big here?

RubenSandwich 8y ago
From my understand this is going to the poorest of the poor in Kenya, because the median Kenyaian monthly salary is ~800 USD.[1][2] So this UBI experiment does not seem to be for the average population, more as a form of welfare. Still interesting and meaningful research, but not the long term UBI experiment many are waiting for. [1] http://www.salaryexplorer.com/salary-survey.php?loc=111&loctype=1 http://www.salaryexplorer.com/salary-survey.php?loc=111&loct... [2] https://duckduckgo.com/?q=80%2C000+KES+in+usd&t=osx&ia=currency https://duckduckgo.com/?q=80%2C000+KES+in+usd&t=osx&ia=curre... Edit: Source [1] seems to be unreliable. See below comment: https://news.ycombinator.com/item?id=17013632 https://news.ycombinator.com/item?id=17013632. So while the number is wrong, it does seem that this UBI is still targeting the poor.
- crsv 8y ago
  Thanks, somehow I missed that, this makes much more sense but then raises some fundamental questions regarding the potential pigeon holing of UBI as a tool whose efficacy is primarily shaped by the state of the economy in which it is deployed (ie this study is highly dependent on the underlying economy being that of a severely under developed nation state).
  - jerf 8y ago
    Maybe I'm being slightly too cynical, but that's pretty much inevitable. A great deal more "scientific knowledge" than you'd probably be entirely comfortable with knowing involves taking a point sample of some space and applying it way, way away from where the sample was actually taken. If this study succeeds, then you can expect the HN commentariat to be citing how BI has been scientifically proved to be a good idea until the end of time, and if this study fails, the opposite. Even better, there's really two types of BI going on here. One is as a mechanism for poverty alleviation, by getting capital to people who have none. Not just "not much", but none. The other is as a solution to the as-yet mostly future problem of the work force being automated out of existence in every industry that people below a certain IQ threshold can work productively in. Expect those to be conflated freely, even though in my opinion they're two different problems. (If you squint really hard, yes, they blur together, but don't ignore the fact that you're squinting.)

jasonmaydie 8y ago

To me it seems like the only way to make a true study is to do it on a self-sustaining population, in other words very little to no outside money. The cost saving by the community should fund the income rather than the general population funding a tiny population. That will always work. It is generally agreed (and obvious) that a universal income is beneficial the crux remains though how we pay for it.

v_lisivka 8y ago

IMHO, they should compare their results with Kiva. Kiva provides zero-interest loans, so donations are not wasted, but used to create sustainable economic society. Give fishing rod, not a fish. https://www.kiva.org/ https://www.kiva.org/

v_lisivka 8y ago
Can anybody explain that downvote? 8-[ ]
- deleted 8y ago
  [deleted]
- wolco 8y ago
  Not a downvoter but the post feels off topic
notahacker 8y ago
I'm not responsible for the downvote, but it's worth pointing out that whilst Kiva donors do not receive interest, most Kiva loan recipients pay relatively enormous interest rates (administering loans is expensive, even for the microfinance institutes which aren't trying to make a profit). There are undoubtedly beneficiaries who make good use of the credit, but also some losers and question marks about how sustainable it actually is... FWIW there's also YC's Zidisha in the microlending market which cuts out the middleman (but still charges interest)
- v_lisivka 8y ago
  AFAIK, most of these money staying in the country, creating additional flow, so I see no problem with that. It's much easier to return money, when you have business. For example, I heard about 3d printer group with rule: we give you 3d printer printed parts for free, but, when you will assemble your own printer, you must print 2 kits and donate them to others. From consumer perspective, it's 100% of interest, but from 3d printer hobbyst perspective, it's not a problem at all, because they will have printer, which will print them parts. Business is like a printer for money. Positive outcome is not guaranteed, of course, but fear of loss, as shown by some losers, drives majority to success.

rumcajz 8y ago

For those who are not aware, GiveDirectly is a charity, not some kind of government agency. If you are pro-UBI, put your money where your mouth is and help with the experiment by donating.

dragonwriter 8y ago
It's quite possible to be pro-UBI but not think that exogenous charity provides a decent model for studying UBI, which is an endogenous transfer program, or that Kenya is a relevant model for the kind of places one is most concerned about implementing UBI.

SlowRobotAhead 8y ago

Didn’t Finland just roll their UBI experiment back? If I remember correctly they tried it on the small sample it didn’t have a meaningful impact and they calculated it would be too expensive to try the whole country, but I could be meant remembering wrong.

hrnnnnnn 8y ago
No, it's continuing until its planned end date. http://www.kela.fi/web/en/-/contrary-to-reports-the-basic-income-experiment-in-finland-will-continue-until-the-end-of-2018 http://www.kela.fi/web/en/-/contrary-to-reports-the-basic-in...
joemaller1 8y ago
Yes, you did read that: http://www.bbc.com/news/world-europe-43866700 http://www.bbc.com/news/world-europe-43866700 Though there was an attempt to walkback or reframe that article: http://www.kela.fi/web/en/-/contrary-to-reports-the-basic-income-experiment-in-finland-will-continue-until-the-end-of-2018 http://www.kela.fi/web/en/-/contrary-to-reports-the-basic-in...
- theptip 8y ago
  > Finland's two-year pilot scheme started in January 2017.. But it will not be extended after this year Sounds slightly different than the parent's phrasing -- the trial was not "walked back", they just decided not to invest more money in it. Given that the research hasn't been completed, it seems perfectly reasonable for the government to decline to extend the trial; I'd think it sensible to wait until they have analyzed the results before making any decisions (unless they have already seen some early data). > "The employment effects across the whole experiment will be available by the end of 2019 or at the beginning of 2020."
tobiasSoftware 8y ago
One of the big differences between the experiments that Finland did and actual UBI is that UBI is supposed to replace all kinds of monetary welfare. It sounds like the experiments in Finland failed because of the cost, but it's really hard to try that small scale, because many of the cost benefits of full scale UBI come from being able to shut down all of the overhead of various welfare programs.

jeffdavis 8y ago

As with most economic questions, science is very difficult and limited in what it can tell us. That's because economics is a social science, and you never know exactly how people are going to react. A study of one culture might not apply to another, and a study in one timeframe might not apply to another. So we will probably see a lot of "hmmm... that's interesting" kinds of things that might not be repeatable. And lots of good and bad effects may be unmeasured or unmeasurable.

darkmighty 8y ago
Your claim is also largely true for drug trials. There is also huge variability due to genetics, cultural placebo response, variations in diet among cultures, cultural or individual symptom expression, and so on. Every science faces an enormous amount of confounding variables. Doesn't mean we should stop doing drug trials, or economic trials in this case. Well designed experiments can be informative, even though care must be taken to generalize them.
- notahacker 8y ago
  This is very true, but it's also true that the inappropriate generalisation of this experiment seems to have started with the press release! If somebody announced a drug test that didn't look at symptoms or benchmark against placebo effects was "testing a new cure", people would rightly point out it was doing no such thing, just as an evaluation of how people in extreme poverty react to charitable handouts doesn't really tell us much about the effects of redesigning the Western welfare state on UBI principle that taxpayers really ought to subsidise wealthy early retirees and housewives on exactly the same basis they subsidise the desperately seeking work and disabled.
- ksk 8y ago
  >Your claim is also largely true for drug trials. There is also huge variability due to genetics, cultural placebo response, variations in diet among cultures, cultural or individual symptom expression, and so on. I work in pharma (biologicals) - though not as a scientist - and you're overstating the differences. The genetic variance of humans is within a very narrow band. The superficial differences are not relevant to the vast majority of pharmaceutical products. In any case, how our human biology reacts to pharmaceutical substances is VASTLY different from humans' economic and social interactions. You know to a very high degree of certainty how an antigen will produce an immune response much much more than how pricing your headphones at 50 dollars will get you more customers, or raising wages by 10% will give you a 20% increase in productivity. >Every science faces an enormous amount of confounding variables. I don't think (macro)economics/human psychology are sciences. Aside from my own opinion, it is certainly debatable - Unlike biology and physics which are firmly in the science camp.

triviatise 8y ago

motivation to work is non linear. With low UBI amounts people dont starve, but still have incentive to work. One of the biggest problems with welfare in the US is that you lose benefits that are equal or greater to the amount you make from work, when you start to work, so there is a huge disincentive to work. If UBI was implemented in the US, 100K would make most people lazy and have them drop out from the workforce, but would 5K? A more likely outcome is inflation which results in whatever dollar amount the UBI starts as, effectively moving close to $0 as prices rise.

Retric 8y ago
The inflation impact from UBI should be non existent as the money is taxed from other parts of the economy vs. being created from thin air. Social Security for example is not a huge driver of US inflation it's simply moving money from pocket A to pocket B.
- _rpd 8y ago
  I think this conflates monetary inflation with cost inflation. A universal one time increase in income will likely be absorbed by an increase in the cost of housing unless there is a mass migration from urban to rural areas.
  - Retric 8y ago
    UBI is not a universal increase in income. Moving money from group A to group B means group A has less money. So housing prices might shift with some price decreases largely offsetting price increases in other areas. Inflation is a different effect where there is a net price increase.
- dragonwriter 8y ago
  > The inflation impact from UBI should be non existent as the money is taxed from other parts of the economy vs. being created from thin air. Since demand profile and propensity to consume are not consistent across all sectors, transfers of income from one sector to another can reasonably be expected to have effects on general and particular price levels. Generally, a downward transfer should have some positive first-order effect on inflation. There's good reason to expect this to be modest compared to the size of the transfer so that the recipients have increased buying power just slightly smaller than the pre-transfer prices would suggest. (OTOH, given the existence of actively managed monetary policy that targets inflation, that first-order effect should itself largely just change the landscape for fiscal policy, translating into less net effect on inflation than without monetary policy and higher interest rates.)

jfasi 8y ago

I'm glad this study is happening and I'm excited to see the outcome, but I feel like I ought to caution people who are expecting this to add this to their arsenal of pro- or anti- UBI arguments in western countries against comparing apples and oranges. My personal prediction is this study will show substantial gains in economic outcomes, health, social standing, etc for all groups that receive money. I'm guessing UBI proponents will leap on the opportunity to advocate for similar programs in western countries. If my prediction is wrong, I'm guessing opposite will happen. I caution that either conclusion would be unjustified because this is not a UBI experiment, this is a charity and aid distribution experiment. The question at hand here isn't "is UBI a wonderful thing" but rather "how do UBI-like distribution methods compare to others?" If you want proof consider that Tavneet Suri's isn't a UBI economist focusing on western countries, "her expertise is as a development economist, specialized in Sub-Saharan Africa" [1] I object to labeling this as a UBI experiment. "Universal Basic Income" is used to describe various proposals to address inequality and unemployment in developed countries where economic gains and jobs are being automated away from the masses of low-skilled workers and up to the elite of high-skilled workers. This is far from the sub-Saharan African context where the economy is still developing and leaders are mulling how best to sustainably extract countries from extreme poverty. [1] http://mitsloan.mit.edu/faculty-and-research/faculty-directory/detail/?id=41285 http://mitsloan.mit.edu/faculty-and-research/faculty-directo...

ataturk 8y ago
As someone who is friends who two different social workers and related to someone in family court diversions (think: parents getting their kids taken away and want them back) I can tell you that UBI isn't going to solve much of anything. These people have money to buy alcohol and cigarettes, and yet their kids go hungry and rely on school lunch programs, etc. Also, I had a brother in law who was a raging alcoholic and stole money from his grade-school kids' piggy banks. He always had money for beer. Asshole. He did the world a favor and hung himself. For all of them, their personal issues overwhelm their ability to be functional adults. They don't clean their houses, they don't mind their kids, they are addicted to various substances and lie about treatment, recovery, and lie about anything anytime it suits their needs in the moment. It's all lie, lie, lie. There is nothing a UBI or anything else is going to accomplish for these people and it is a myth to believe that payments without oversight or qualifications will lead to positive outcomes. One would think the US's 50 year experiment with welfare would already provide more than enough data to prove that if you subsidize a behavior you get more of it. Let people face death, then see how they act. Take their kids away, first, though. It's not the kids' fault their parents are deadbeats.

ddingus 8y ago

I would much rather we have a jobs program. Anyone who needs work can get it at $15 per hour and up, depending on what the job is. There is a whole lot we need doing. If we do that, we are worth more, and we get something meaningful in return for a direct economic stimulus. Our infrastructure needs refurbished. Our homeland needs a cleanup, and could really benefit from some care and feeding. Our parks can be improved, making them attractive in the same way we did before. I don't feel UBI makes sense. It's just a payoff, and it's real value will be diluted. Too easy to just adjust it up or down to throttle work needs, buying power.

JoeAltmaier 8y ago
In some countries, rising automation means there are no jobs to be had, or that skilled persons fall down the ladder until they're working unskilled jobs. We pretend its 98% employment, but folks with degrees are working food service. A 'jobs program' in this environment is doing no good. There are already 30M people in service jobs (The lowest paid), and they're being automated away right now. We can't retrain them all to be engineers; we don't even need 30M more engineers. What are we to do? The solution won't be 'do what we did before' because, we've never been in this situation before. Oh, wait, in England they were in this situation when weavers were replaced by textile mills. Their solution: let the weavers starve and die. Maybe not the answer we want today.
- josefresco 8y ago
  "In some countries, rising automation means there are no jobs to be had" Source on this claim? Interested in the topic and would like to read more.
  - JoeAltmaier 8y ago
    In the US, automation is growing explosively. When factories 'come back to the USA' from India or China or wherever, its not because they're paying enough to attract Americans; its because they automated and don't need (hardly) anybody. Further, bank teller and fast-food worker are the next to be automated away. Its happening everywhere, with touch-panel counter service.

dharma1 8y ago

I wonder what size a community needs to be for UBI to function in a self-sustaining way. I'd like to see some game theoretical research into it too if anyone has pointers?

MrZongle2 8y ago
That's a good question. By the same token: is there a maximum community size that can support UBI?
- dharma1 8y ago
  Quite possibly, things like distance and number of participants would most likely change the dynamics. That's why I was wondering about the game theory part, so it could perhaps be modelled and tested in software. Running large scale UBI experiments is pretty slow and expensive, so tuning the parameters in the real world to make it work is going to take a very long time and cost a lot of money.
  - airstrike 8y ago
    How exactly do you plan on modeling how people are going to behave after receiving the aid? That's what these real-life experiments are trying to do in order to inform their models. It's not like economists don't know how to build models...
    - dharma1 8y ago
      I don't know what I would model or how - that's why I was asking for pointers :) And I in addition to economists, I would be interested in seeing contributions from physicists, computer scientists and machine learning researchers. This paper was super interesting - https://arxiv.org/abs/1706.03058 https://arxiv.org/abs/1706.03058, as was this - https://arxiv.org/abs/1803.06376 https://arxiv.org/abs/1803.06376 But would like to see UBI specific papers.

tribune 8y ago

Any UBI study that doesn't include everyone in a society is not studying "universal" basic income at all. It's just giving some people money. It would be very surprising if this didn't yield positive outcomes for that group. The big question marks surrounding UBI involve its implementation at a society-wide level. (What are the macroeconomic effects? What if people blow their UBI on dumb things and still end up starving?) Anything short of UNIVERSAL experimentation will not address these.

collyw 8y ago
I do agree, but this seems a step closer than everything else that has been labeled a UBI experiment before.
commandlinefan 8y ago
Not only that, but I don't believe (correct me if I'm wrong) that any UBI skeptics would argue that UBI wouldn't "help" the people who received it in the short-term, like in a 12-year-period, but that it's unsustainable in even the lifetime of a single generation. It's more like social security, which was a great deal for the first generation that started receiving it, but is getting more expensive and less beneficial with each passing year.
tobiasSoftware 8y ago
The other big question is about the cost side of it. True UBI claims to be able to not be that costly, as it will enable the shut down of all monetary forms of welfare. The resulting unemployment of those employees working welfare related jobs shouldn't even be that concerning, because then the benefit side of UBI would kick in for anyone unemployed. How you study all of that on a small scale is a mystery, as it seems to me that UBI is nearly impossible to bootstrap and will just have to be tried full force at some point with some limited studies as guidance.
stale2002 8y ago
I see this argument brought up, a lot, but the problem with it is that it is unfalseifiable. If UBI is so great, then similar "almost UBI" proposals should ALSO show good results. I sincerely doubt that there is a magic line between "similar but not UBI" programs and "UBI" programs where the good stuff immediately appears. If UBI is impossible to test, then we shouldn't do it. It would be insanely risky to spend trillions of dollars on something that its proponents claim can't be tested. So we should just not implement it in the first place.

austincheney 8y ago

https://en.wikipedia.org/wiki/Basic_income https://en.wikipedia.org/wiki/Basic_income The concepts of social welfare really make me want to visit the Scandinavian nations to see how they get it right and how it is compatible with their their social culture. As an American I really don't see social welfare working the US without dramatic shifts in the social culture. I also see taxation as a huge factor. The US needs to eliminate income tax in favor of other tax programs. The state of Texas has high property taxes but no state income tax and the results to the state economy are fantastic. Wealthy people can deduct all manners of things from income taxes, but there are exceedingly few deductions from property taxes. It naturally punishes the wealthy more, such as the goals of a graduated income tax, since it is a percentage set by the local city against the value of the property. People who do not own property do not pay property taxes, so less wealthy people are naturally excused from such taxation. Property prices in Texas are generally low compared to much of the rest of the country, which means more people are capable of owning property and thus contributing to property taxes. For example the value of my house in Texas is the equivalent of the minimum down payment for a similarly sized house in California, which I could never afford. With a universal basic income more people would be capable of owning property, thus having a higher standard of living, and also thus further contributing to property taxes.

ThrowawayR2 8y ago
> People who do not own property do not pay property taxes, so less wealthy people are naturally excused from such taxation. The less wealthy have those property taxes rolled into their monthly rent, so I fail to see how you can make that claim.
- airstrike 8y ago
  It should be evident that if the alternative is paying rent AND income taxes, then the less wealthy are relatively better off in the case of no income taxes.
unpopular42 8y ago
What makes you think Scandinavian nations got it right? I think it's a myth, albeit quite popular.

jlebrech 8y ago

I'd like welfare to be a system that gives people food, shelter, clothing and hygiene rather than "free money". also that shelter would allow people to run a business without fear of that free stuff being removed from under them. it would help battered wives/husbands and young adults get on their feet. would also help governments build those desperately needed (communal) homes that they promise.

IanDrake 8y ago

Whatever you think of UBI, you won’t be able to point at the results of this study and make any compelling argument that UBI works or doesn’t work. For UBI to be tested effectively it would, at a minimum, need be implemented at a national level and include everyone in that nation. For one, that is the only way to see the macro economic effects. Second, in this study the money falls from the sky. No one is being taxed to pay for the UBI nor is the currency being debased. In any case, if it works, people like me will point to these flaws. If it doesn’t work, the pro-UBI camp will have their set of flaws to argue. Finally, this study seems to suggest that ‘success’ is determined by what percent of people on UBI work. Instead they should be measuring people’s standard of living improvement, if they work or not.

not_that_noob 8y ago

If anyone has doubts about UBI, consider the great A/B (or rather B/W?) experiment the government ran as part of the New Deal. One group was provided subsidies for housing (analogous to UBI) and another was not - decades later, the initial modest help compounded to leave one group much more prosperous than the other. I'm willing to bet on the outcome of this study. https://www.npr.org/2017/05/03/526655831/a-forgotten-history-of-how-the-u-s-government-segregated-america https://www.npr.org/2017/05/03/526655831/a-forgotten-history... "African-American families that were prohibited from buying homes in the suburbs in the 1940s and '50s and even into the '60s, by the Federal Housing Administration, gained none of the equity appreciation that whites gained. So ... the Daly City development south of San Francisco or Levittown or any of the others in between across the country, those homes in the late 1940s and 1950s sold for about twice national median income. They were affordable to working-class families with an FHA or VA mortgage. African-Americans were equally able to afford those homes as whites but were prohibited from buying them. Today those homes sell for $300,000 [or] $400,000 at the minimum, six, eight times national median income. ..."

tzahola 8y ago
Subsidized housing is not UBI. Welfare is not UBI. EBT cards are not UBI. Also, these guys were just lucky that the government subsidized their homes in SF which experienced a tech boom 50 years later. Now imagine the same in Detroit.
smsm42 8y ago
What you describe in not UBI, it's discrimination. I think it's pretty clear that if you exclude certain group from preferable markets, and sideline them to be able to buy only second-rate and third-rate goods, then you'll find plenty of examples where they end up at a huge disadvantage. It's not a test of UBI, it's a test of whether restricting access to a market can hurt a group against which it is used. I think we can all agree that the answer to this question is a definite "yes" - but it has no connection with UBI.

dragonwriter 8y ago

> People who advocate for a universal basic income say it will be a way to pull people out of poverty. Skeptics think a universal basic income will act as a disincentive for people to work. IME, advocates tend to say it is a better way of alleviating the symptoms of poverty than means-tested benefit programs and that, compared to means tested programs, it provides greater ability to take advantage of (and less disincentives to) other existing means of lifting oneself out of poverty in the developed world. And skeptics and advocates both agree that it will reduce economic compulsion to work, but advocates argue that the reduction to structural disincentives and barriers to development and outside income involved in both means-tested aid programs and the trap that is necesssry-but-dead-end work would outweigh that in the conditions prevailing in the developed world. While it may be certainly interesting to study the different models of exogenous aid provided in the study here, I don't think it's particularly relevant, other than tangentially, to the core arguments regarding UBI because the design is wrong and the environment is wrong, and should not be viewed as a study of UBI so much as a study of charity models which might have some incidental relevance in discussions of UBI.

hartator 8y ago

Thinking not having money is the issue of Kenya is belatedly false. Corruption, wars, extorsions, won’t be solve by more “free” money.

programminggeek 8y ago

The problem with UBI is not the idea itself. It's the unintended consequences and edge cases. For example, it might be that UBI causes people to work MORE and die sooner at riskier jobs (like working oil fields). What is the net effect of that? Also, what if it doesn't do much more than inflate prices to the point that people still have to work just as much? Could it just reset the sort of "zero point" higher? What if people have an in-built need to work to have value in life? Would paying them not to work cause their life to lose its value and increase suicides or other negative behavior? Also, will people start having more kids to somehow get more UBI benefits? Large system changes mean serious consequences that go beyond the obvious. Anyone who has ever worked on a large software system surely have experienced this. I don't expect failure, but I do expect some seriously weird and unintended outcomes that are non-obvious.

ppeetteerr 8y ago

This is a great study and I hope it nets some value. UBI has already been tested in Canada and other areas of the world where it was abandoned. The outcome, I would guess, is very circumstantial. Perhaps in Kenya, where there is lack of infrastructure and high corruption, giving people money will result in greater improved quality of life over providing subsidized services. In Canada, I would argue that subsidized services (free healthcare, education, maternity leave, etc.) are more important as they guarantee that a person cannot possibility fall into the debt trap. Perhaps the ideal is something in between: cash (UBI) and services.

shireboy 8y ago

I think this article misrepresents "skeptics". "Disincentive to work" is really only one reason to be skeptical, and I'd argue not a good one. I'm more concerned about potential unintended consequences that wouldn't manifest in small scale studies such as this one. For example, suppose UBI leads to inflation after 5 years but only once it is truly national-scale. Small-scale studies may not even look at this metric, or be able find correlation if they did. By the time it was apparent, choice would be to roll it back and cause social upheaval, or continue inflation, both of which could hurt the people UBI is designed to help most. Obviously I don't have any data to know if UBI leads to inflation or not, but that's sort of the point. Ideally we'd have data on this and other effects beyond just "does it help individuals?", but those effects may be difficult to test.

ksk 8y ago
But your objection would apply to all economic policies. Why is this any different?
- shireboy 8y ago
  Well, I do tend to hold that objection for lots of economic policies ;) Governments can be really bad at foreseeing things like this and slow at changing direction once they are detected. Obviously one can take that too far and do _nothing_ out of fear of unintended consequences. But to the degree we can think through those potential outcomes and devise ways to test for them, we should.
  - ksk 8y ago
    >But to the degree we can think through those potential outcomes and devise ways to test for them, we should. What are some of those ways to test it that you suggest? This study isn't focused on your particular concern of inflation.
    - shireboy 8y ago
      Right, it'd be really hard in this case. Only being armchair-level interested in UBI I'd have to be content hoping that real economists and UBI researchers would come up with ways to test or at least address the risk. Maybe there are ways to do computer models around that, or ways to structure a roll-out so that it is very clearly a "trial" until various macro impacts can be measured. Another way to test, at least in the US and similarly organized governments, is to rely on states to implement. 50 different parallel experiments measuring UBI vs no-UBI impact. The trick would be to measure fairly and transparently, and react without political spin and bias, which I don't really see happening soon. My other motivation for posting is hoping that reporters and other HN readers would see there is skepticism besides just "it'd make people lazy".

camdenreslink 8y ago

When studying UBI isn't it hard to control for the fact that only a small group is receiving funds, rather than every unemployed/underemployed person in the country (which would be the case if UBI became federal legislation)? As jobs are automated, we will need to do something...

snarf21 8y ago
I think the answer is yes. Also, if everyone just gets $X, will prices also rise by some Y close to X as people will feel less attachment to this $X as it was free? I've yet to see a truly thoughtful model of what all will happen. For example, UBI is said to replace all the bureaucracy of today's welfare programs. That is a lot of people that will lose their jobs, including the cycle of the people who used to supply goods and services to those people. Some of those companies will close and layoff more people, etc., etc. It doesn't go infinite but it definitely cascades. We can see proof of this in old steel towns or some place like Detroit. As good jobs dry up, it starts an economic slide.

stale2002 8y ago

One thing that I am surprised that nobody talks about, when discussing UBI is the fact that the USA already has UBI for a largish segment of the population. The US UBI program is called social security. It is just a check that is given to old people with which they can use for whatever they want. Why can't we study what this group of people does with their money?

taysic 8y ago
Having free money after a lifetime of working that you feel you contributed to seems different from having it available before you've worked before.