8 ms·

I realize there's no data on this, but do these localized experiments translate into actual UBI at all? I only skimmed the article but it seems to me that givin

I realize there's no data on this, but do these localized experiments translate into actual UBI at all? I only skimmed the article but it seems to me that giving 125 people 500$/Month, which come from a donation to research UBI, has basically no relation to actual UBI. They found that giving those 125 people an unconditional monthly allowance helps them survive and has a positive effect on their life. They did not seem to research at all how to actually fund it, what kind of effect a higher tax to fund it would have, or what would happen to the government employees currently working in social welfare if they'd lose their job.

LatteLazy 6y ago
In fairness, funding and spending are 2 separate problems. Other people can independently do research on whether a particular tax or some other spending cut is the best way to fund this. I agree the same size is small (I thought it was 525), and I'd also say there is an issue with the length of the study. But it should still provide some useful stats on how many people give up work or start businesses or go back to school and what the impact is on crime, drug use etc... And that's the question here: how does this effect people's economic and social behaviour?
- notahacker 6y ago
  > But it should still provide some useful stats on how many people give up work or start businesses or go back to school and what the impact is on crime, drug use etc... Why would "here's an extra $9k across 18 months" tell you anything about how a low income person would respond to being promised a livable income for life?
  - LatteLazy 6y ago
    Because for those 18 months their lives would be different. I'd like to see a 5+ yr study specifically because that would allow people to give up low paying jobs, go get a full degree and then get a new better paying job. 18 months isn't that, obviously. But it would allow you to go and do something. Instead of going from being a waiter to a programmer, maybe you can go from being a waiter to a basic plumber or a truck driver or start a small business or something? We can all agree that having more cash will improve people health\community\whatever. The big question is what will people do with the opportunity no-strings-attached cash gives them. How many people will just spend the money? How many people will stop working and do nothing useful? How many people will stop working and do something very very useful? You only need a small proportion of people to make significant changes like this (and thus pay a lot more tax) and suddenly these programs get very affordable net.
    - notahacker 6y ago
      You need a very large proportion to make changes like that if it's offset by people using the money to retire from working life altogether[1]. Since this choice can't be made with this study design, it tells us nothing about what people would actually do with no-strings attached money for life, and indeed actively distorts the reality of how people will respond by at least as much as that other great UBI experiment no UBI advocate ever talks about: state pensions.... [1]actually you need an implausibly large proportion simply to offset the amount of people who already don't work and aren't entitled to benefit payments who would be eligible to receive UBI
      - LatteLazy 6y ago
        Respectfully, that is exactly what we need an experiment to prove\disprove. At least some people took this 9k as an opportunity to sit at home playing video games. At least some got a (small) education or started a business. The issue with pensions as an example of UBI is that the only people getting them are old. So they mostly already have the assets they want, they don't have careers they want to improve, they don't want to start business or earn money, they want to retire...
        notahacker 6y ago
        Yes, old people are also an imperfect proxy for the workforce as a whole. But this experiment which is designed to make it impossible for participants to retire off the money proves even less about people's likelihood of retiring off free money than the natural experiments where they're encouraged to do so.
        LatteLazy 6y ago
        Yeah, a bigger, longer, better funded trial would be better. But we can still learn some things from this. I actually get a bit frustrated at all the too small/short/low-amount payment studies out there. But c'est la vie.
nlitened 6y ago
They should have also collected monthly a total of $62500 extra “taxes” from all these people — the higher the income, the bigger the tax share.
- notahacker 6y ago
  tbf since their targeting was low income neighbourhoods, one can assume the higher income neighbourhoods would have contributed some of the share. A fair experiment would have at least stripped away all the other state funded benefits UBI supposedly replaces, but I guess 'UBI is good for the spending power of single-income couples but leaves the poorest people much worse off' wasn't the headline the advocacy group was shooting for...
- moduspol 6y ago
  Why $62500? The participants should be voting on how much to take from those among them with the higher incomes. I mean--unless we're assessing how UBI might work in a country without democracy.
  - AdrianB1 6y ago
    Democracy is not a free pas to vote anything, especially if it is negatively impact some people, otherwise you justify gang rapes as a majority decision.
    - moduspol 6y ago
      Sure, but it's tough to imagine in today's climate that a majority of voters living only on UBI would vote to maintain or lower the amount of money given directly to them from the top X%. We already have the issue today but it's not quite so direct.
      - AdrianB1 6y ago
        This is a huge problem with UBI. Maybe people will have to make a choice, either live on UBI or vote, but not both - it is immoral to vote for your own benefits.
Toutouxc 6y ago
Also what kind of effect on pricing it would have. Surely if everyone's baseline income increases, it creates a safe buffer-of-a-sort that necessities' prices (housing, food) can comfortably consume.
- aptwebapps 6y ago
  Wouldn't the naive expectation be that prices would rise somewhat but that if the markets in question were competitive that this would not be severe?
  - harry8 6y ago
    I direct your attention to the market for "housing"
    - aptwebapps 6y ago
      https://news.ycombinator.com/item?id=23857621 https://news.ycombinator.com/item?id=23857621 gets at what I was thinking but was too lazy to articulate.
    - deleted 6y ago
      [deleted]
    - mdorazio 6y ago
      Housing prices are barely correlated with incomes in a meaningful way across cities, let alone caused by them. See [1]. The #1 determinant of housing prices is supply, which is usually an issue of regulation, not of local ability to pay rent/mortgage. There's not much consensus on this topic among economists since there are so many confounding factors - the best paper I've seen so far is [2] which finds that income increases via minimum wage hikes might increase rents anywhere from a quarter to a half of the wage increase, absent other factors. [1] https://www.cnbc.com/2019/03/07/heres-the-share-of-income-that-goes-to-rent-in-cities-across-the-us.html https://www.cnbc.com/2019/03/07/heres-the-share-of-income-th... [2] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3282661 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3282661
kingkawn 6y ago
One step at a time to open peoples’ minds
roenxi 6y ago
> They did not seem to research at all how to actually fund it And this is really the most profound part. There isn't an argument to be made against "if people have more money to buy stuff they will be better off". Nobody can argue against that, it is true. The _entire_ case against that sort of social spending is "but we need normal people to create more than they consume or the resources won't be available" and "this isn't fair on the people who have to support them" argued at varying levels of complexity and indirection. If you ignore the negative outcomes then any plan is a good plan and only has positive outcomes. Duh.
- lukevp 6y ago
  I disagree, it’s not the fairness, or the overproduction, but the best overall benefit to society given the money spent. Social programs that already exist are a progressive tax that penalizes healthy, working people more than those who are receiving the benefit. Examples: unemployment, Medicaid, WIC, Saver’s Credit.
  - deleted 6y ago
    [deleted]
- danaris 6y ago
  The level of productivity per capita in the economy today is vastly more than enough to supply our entire population with only a fraction working. There's also plenty of information indicating that if given the choice, most people actually want to work...they just don't want to be working shit jobs for shit pay for shit bosses.
  - Ericson2314 6y ago
    Amen, how many times to we need to tell people, look production and consumption first, and then think about finance? I'm not saying finance is all bad, I'm saying when the financial situation is harder to understand than the so-called "real economy"...don't!
- DonaldFisk 6y ago
enaaem 6y ago
I don't see the point of these small studies at all. Many people already have some form of UBI like pensioners. That their lives are pretty relaxed should come as no surprise. The most important thing to study is the effect of UBI on total economy. Saudi Arabia is an interesting example, since their economy pretty much runs on free oil money. Saudi nationals are notorious for having bad work ethics, and they have to import many foreign workers to run the economy. To prepare the country for a post oil world companies are now required to hire a minimum percentage of Saudi nationals. https://en.wikipedia.org/wiki/Saudization https://en.wikipedia.org/wiki/Saudization
- larrydag 6y ago
  This is one of the macroeconomic scenarios that scares me the most. I can't imagine what would happen to the global socio-economic stability if those middle east countries were to lose that source of GDP. It's not to unreasonable to conceive either as more countries are becoming oil energy independent.
  - JumpCrisscross 6y ago
    > what would happen to the global socio-economic stability if those middle east countries were to lose that source of GDP Tumultuous transition period followed by quiet. The same wealth that currently placates them also enables them to project power. And when the wealth disappears, infighting is more likely than outward violence. After the initial period of reorganisation, it will settle into a state similar to other formerly-wealth now-impoverished nations.
    - Ericson2314 6y ago
      Yeah, the extreme contrast between the countries that have and don't have oil in the middle east is what creates the conflict.
  - neutronicus 6y ago
    If the rest of the world is oil-independent, I imagine it will truck on regardless of any post-oil chaos in the former oil-producing regions.
GhostVII 6y ago
Another question I never see answered is if people are better off on UBI instead of welfare/food stamps/etc. Most of the time I hear people talking about finding UBI, they say it will replace existing social programs, but no UBI experiment that I have seen actually tests if people are better off with cash instead of social assistance.
- Spooky23 6y ago
  That’s a great point. Social services are about more than cash. We give mothers baby formula because we want babies to have adequate nutrition. If you hand out cash, some percentage of people will buy beer instead.
  - controversy 6y ago
    This is a valid point. I’ve never seen a response to how you make sure the spending goes to the resources. While one can argue that the people should be adults, reality shows that is not true. Having the infrastructure to pay rent automatically by the government means rent is paid. What do we do when people piss away their UBI and don’t have money for the necessities?
    - DonaldFisk 6y ago
      Anyone who intentionally did that would soon find themselves without accommodation or food. If it's because they can't budget, it could be paid to them weekly or even daily. People who can't manage their own lives (e.g. mentally ill, drug addicts) would need to be given help, whatever safety net there is.
      - controversy 6y ago
        The point of UBI is to remove non-private charity support. How will politicians react when people are dying in the streets? The US is not about persons responsiblity.
      - Spooky23 6y ago
DonaldFisk 6y ago
How do you propose that UBI be tested? If you give it to a small number of people, or to everyone for a limited time, it's argued it isn't UBI. Various services are funded out of taxation at present. The higher gross tax rate would be offset by UBI (those in work would get it too), so the mean net tax rate shouldn't change much. What would happen to the government employees currently working in social welfare if they'd lose their job is that they'd get UBI until they were given or found more productive work.
ElFitz 6y ago
There has been an accidental larger study: https://www.wired.com/story/free-money-the-surprising-effects-of-a-basic-income-supplied-by-government/ https://www.wired.com/story/free-money-the-surprising-effect...

LatteLazy 6y ago

In fairness, funding and spending are 2 separate problems. Other people can independently do research on whether a particular tax or some other spending cut is the best way to fund this. I agree the same size is small (I thought it was 525), and I'd also say there is an issue with the length of the study. But it should still provide some useful stats on how many people give up work or start businesses or go back to school and what the impact is on crime, drug use etc... And that's the question here: how does this effect people's economic and social behaviour?

notahacker 6y ago
> But it should still provide some useful stats on how many people give up work or start businesses or go back to school and what the impact is on crime, drug use etc... Why would "here's an extra $9k across 18 months" tell you anything about how a low income person would respond to being promised a livable income for life?
- LatteLazy 6y ago
  Because for those 18 months their lives would be different. I'd like to see a 5+ yr study specifically because that would allow people to give up low paying jobs, go get a full degree and then get a new better paying job. 18 months isn't that, obviously. But it would allow you to go and do something. Instead of going from being a waiter to a programmer, maybe you can go from being a waiter to a basic plumber or a truck driver or start a small business or something? We can all agree that having more cash will improve people health\community\whatever. The big question is what will people do with the opportunity no-strings-attached cash gives them. How many people will just spend the money? How many people will stop working and do nothing useful? How many people will stop working and do something very very useful? You only need a small proportion of people to make significant changes like this (and thus pay a lot more tax) and suddenly these programs get very affordable net.
  - notahacker 6y ago
    You need a very large proportion to make changes like that if it's offset by people using the money to retire from working life altogether[1]. Since this choice can't be made with this study design, it tells us nothing about what people would actually do with no-strings attached money for life, and indeed actively distorts the reality of how people will respond by at least as much as that other great UBI experiment no UBI advocate ever talks about: state pensions.... [1]actually you need an implausibly large proportion simply to offset the amount of people who already don't work and aren't entitled to benefit payments who would be eligible to receive UBI
    - LatteLazy 6y ago
      Respectfully, that is exactly what we need an experiment to prove\disprove. At least some people took this 9k as an opportunity to sit at home playing video games. At least some got a (small) education or started a business. The issue with pensions as an example of UBI is that the only people getting them are old. So they mostly already have the assets they want, they don't have careers they want to improve, they don't want to start business or earn money, they want to retire...
      - notahacker 6y ago
        Yes, old people are also an imperfect proxy for the workforce as a whole. But this experiment which is designed to make it impossible for participants to retire off the money proves even less about people's likelihood of retiring off free money than the natural experiments where they're encouraged to do so.
        LatteLazy 6y ago
        Yeah, a bigger, longer, better funded trial would be better. But we can still learn some things from this. I actually get a bit frustrated at all the too small/short/low-amount payment studies out there. But c'est la vie.

nlitened 6y ago

They should have also collected monthly a total of $62500 extra “taxes” from all these people — the higher the income, the bigger the tax share.

notahacker 6y ago
tbf since their targeting was low income neighbourhoods, one can assume the higher income neighbourhoods would have contributed some of the share. A fair experiment would have at least stripped away all the other state funded benefits UBI supposedly replaces, but I guess 'UBI is good for the spending power of single-income couples but leaves the poorest people much worse off' wasn't the headline the advocacy group was shooting for...
moduspol 6y ago
Why $62500? The participants should be voting on how much to take from those among them with the higher incomes. I mean--unless we're assessing how UBI might work in a country without democracy.
- AdrianB1 6y ago
  Democracy is not a free pas to vote anything, especially if it is negatively impact some people, otherwise you justify gang rapes as a majority decision.
  - moduspol 6y ago
    Sure, but it's tough to imagine in today's climate that a majority of voters living only on UBI would vote to maintain or lower the amount of money given directly to them from the top X%. We already have the issue today but it's not quite so direct.
    - AdrianB1 6y ago
      This is a huge problem with UBI. Maybe people will have to make a choice, either live on UBI or vote, but not both - it is immoral to vote for your own benefits.

Toutouxc 6y ago

Also what kind of effect on pricing it would have. Surely if everyone's baseline income increases, it creates a safe buffer-of-a-sort that necessities' prices (housing, food) can comfortably consume.

aptwebapps 6y ago
Wouldn't the naive expectation be that prices would rise somewhat but that if the markets in question were competitive that this would not be severe?
- harry8 6y ago
  I direct your attention to the market for "housing"
  - aptwebapps 6y ago
    https://news.ycombinator.com/item?id=23857621 https://news.ycombinator.com/item?id=23857621 gets at what I was thinking but was too lazy to articulate.
  - deleted 6y ago
    [deleted]
  - mdorazio 6y ago
    Housing prices are barely correlated with incomes in a meaningful way across cities, let alone caused by them. See [1]. The #1 determinant of housing prices is supply, which is usually an issue of regulation, not of local ability to pay rent/mortgage. There's not much consensus on this topic among economists since there are so many confounding factors - the best paper I've seen so far is [2] which finds that income increases via minimum wage hikes might increase rents anywhere from a quarter to a half of the wage increase, absent other factors. [1] https://www.cnbc.com/2019/03/07/heres-the-share-of-income-that-goes-to-rent-in-cities-across-the-us.html https://www.cnbc.com/2019/03/07/heres-the-share-of-income-th... [2] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3282661 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3282661

kingkawn 6y ago

One step at a time to open peoples’ minds

roenxi 6y ago

> They did not seem to research at all how to actually fund it And this is really the most profound part. There isn't an argument to be made against "if people have more money to buy stuff they will be better off". Nobody can argue against that, it is true. The _entire_ case against that sort of social spending is "but we need normal people to create more than they consume or the resources won't be available" and "this isn't fair on the people who have to support them" argued at varying levels of complexity and indirection. If you ignore the negative outcomes then any plan is a good plan and only has positive outcomes. Duh.

lukevp 6y ago
I disagree, it’s not the fairness, or the overproduction, but the best overall benefit to society given the money spent. Social programs that already exist are a progressive tax that penalizes healthy, working people more than those who are receiving the benefit. Examples: unemployment, Medicaid, WIC, Saver’s Credit.
- deleted 6y ago
  [deleted]
danaris 6y ago
The level of productivity per capita in the economy today is vastly more than enough to supply our entire population with only a fraction working. There's also plenty of information indicating that if given the choice, most people actually want to work...they just don't want to be working shit jobs for shit pay for shit bosses.
- Ericson2314 6y ago
  Amen, how many times to we need to tell people, look production and consumption first, and then think about finance? I'm not saying finance is all bad, I'm saying when the financial situation is harder to understand than the so-called "real economy"...don't!
DonaldFisk 6y ago

enaaem 6y ago

I don't see the point of these small studies at all. Many people already have some form of UBI like pensioners. That their lives are pretty relaxed should come as no surprise. The most important thing to study is the effect of UBI on total economy. Saudi Arabia is an interesting example, since their economy pretty much runs on free oil money. Saudi nationals are notorious for having bad work ethics, and they have to import many foreign workers to run the economy. To prepare the country for a post oil world companies are now required to hire a minimum percentage of Saudi nationals. https://en.wikipedia.org/wiki/Saudization https://en.wikipedia.org/wiki/Saudization

larrydag 6y ago
This is one of the macroeconomic scenarios that scares me the most. I can't imagine what would happen to the global socio-economic stability if those middle east countries were to lose that source of GDP. It's not to unreasonable to conceive either as more countries are becoming oil energy independent.
- JumpCrisscross 6y ago
  > what would happen to the global socio-economic stability if those middle east countries were to lose that source of GDP Tumultuous transition period followed by quiet. The same wealth that currently placates them also enables them to project power. And when the wealth disappears, infighting is more likely than outward violence. After the initial period of reorganisation, it will settle into a state similar to other formerly-wealth now-impoverished nations.
  - Ericson2314 6y ago
    Yeah, the extreme contrast between the countries that have and don't have oil in the middle east is what creates the conflict.
- neutronicus 6y ago
  If the rest of the world is oil-independent, I imagine it will truck on regardless of any post-oil chaos in the former oil-producing regions.

GhostVII 6y ago

Another question I never see answered is if people are better off on UBI instead of welfare/food stamps/etc. Most of the time I hear people talking about finding UBI, they say it will replace existing social programs, but no UBI experiment that I have seen actually tests if people are better off with cash instead of social assistance.

Spooky23 6y ago
That’s a great point. Social services are about more than cash. We give mothers baby formula because we want babies to have adequate nutrition. If you hand out cash, some percentage of people will buy beer instead.
- controversy 6y ago
  This is a valid point. I’ve never seen a response to how you make sure the spending goes to the resources. While one can argue that the people should be adults, reality shows that is not true. Having the infrastructure to pay rent automatically by the government means rent is paid. What do we do when people piss away their UBI and don’t have money for the necessities?
  - DonaldFisk 6y ago
    Anyone who intentionally did that would soon find themselves without accommodation or food. If it's because they can't budget, it could be paid to them weekly or even daily. People who can't manage their own lives (e.g. mentally ill, drug addicts) would need to be given help, whatever safety net there is.
    - controversy 6y ago
      The point of UBI is to remove non-private charity support. How will politicians react when people are dying in the streets? The US is not about persons responsiblity.
    - Spooky23 6y ago

DonaldFisk 6y ago

How do you propose that UBI be tested? If you give it to a small number of people, or to everyone for a limited time, it's argued it isn't UBI. Various services are funded out of taxation at present. The higher gross tax rate would be offset by UBI (those in work would get it too), so the mean net tax rate shouldn't change much. What would happen to the government employees currently working in social welfare if they'd lose their job is that they'd get UBI until they were given or found more productive work.

ElFitz 6y ago

There has been an accidental larger study: https://www.wired.com/story/free-money-the-surprising-effects-of-a-basic-income-supplied-by-government/ https://www.wired.com/story/free-money-the-surprising-effect...