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These studies don't really prove anything. Common arguments in favor of these studies - "They prove people don't quit work on UBI!" - No, they prove that peo

These studies don't really prove anything. Common arguments in favor of these studies - "They prove people don't quit work on UBI!" - No, they prove that people who are in a program that is very clearly temporary will not end their careers for a short pilot program. This means nothing. "They prove people won't spend it on drugs, booze, and lotto tickets!" - No. If you make $1k from a job and $1k from a pilot program each month, you spend the $1k from the pilot on legitimate bills and now you have $1k to spend however you like. The study can't trace that money. (This isn't to say everyone on UBI uses it for drugs, rather, it's to point out that you cannot deduce they don't just by tracing the way the transfer payments are spent) "The studies prove people's life and happiness improved because of UBI!" - No kidding. You gave someone several thousand dollars no strings attached in a situation where neither taxes nor inflation would rise as a result. What UBI skeptical people want to know is where is the proof that we can afford to tax ourselves to pay ourselves, where is the proof that it won't hurt long term productivity, and where is the proof that it doesn't cause inflation. A 120 person 36 month trial program cannot answer any of these questions.

jpxw 6y ago
They also only give the money to a small number of people Not to mention that the real question is whether UBI makes sense economically, not whether people like money, which is almost indisputable
- notahacker 6y ago
  Strip away the clickbait 'Germany begins' headline and it's 'a pro-UBI lobbying group adds 120 people to its latest trial'
- Proven 6y ago
  > Not to mention that the real question is whether UBI makes sense economically It's not, because we already know that it can't possibly work.
- MisterBastahrd 6y ago
  The thing about government programs that hand out cash is that the money will be circulated back into the local economy most of the time, which is a net benefit (I think it would be a net positive if the money was required to be spent locally if the beneficiary makes above a certain income). It's not like it's getting thrown down a black hole. Even if a person is making great money, that additional money is more likely to be spent on higher quality local services, aside from online purchases from places like Amazon.
  - scohesc 6y ago
    I would like to see a source for that if you could provide one :) If I was working full-time and could live comfortably off that plus extra UBI, I think the majority of people would spend it on more luxurious goods (phones, laptops, drugs, etc.) which are mostly ran by/on outside/blackmarket economies... We're not sure of the magic number/ratio between "person will use UBI for basic, locally-sourced needs" vs. "person will use UBI for 'wants', sourced elsewhere" and I think there's so many factors that it will be hard (almost impossible) to come up with a palpable answer.
    - MisterBastahrd 6y ago
      Source? Reality. Look at the savings and investment rates for the poor. Where do you think the money is going? Most people still source their large purchases locally, even if it's at a store chain, which keeps the local economy going because there are plenty of services used at those stores that are local. A guy who goes and buys a nice new luxury TV from a local Best Buy is still supporting local businesses indirectly because that Best Buy is going to have multiple contracts with local businesses for services.
  - missedthecue 6y ago
    >The thing about government programs that hand out cash is that the money will be circulated back into the local economy most of the time, which is a net benefit How is taxing the local economy to spend in the local economy (and some abroad) a net benefit? That's just transfer payments with some friction loss.
asah 6y ago
This is one of the best summaries of UBI that I have seen. UBI proponents are advised to read this carefully.
- boardwaalk 6y ago
  I don’t think any honest UBI proponents would dispute it — or be particularly surprised with what the GP said. It’s obvious that significant change to the economy would have hard to predict effects when human behavior is at the center. That doesn’t mean it’s not worth it.
slg 6y ago
As a general supporter of UBI, I'm not sure there is any way to actually test UBI without just implementing it at full scale. The U is an important part of it and like you said the expectation of permanence is crucial to seeing a change in long term planning and behaviors.
- ghthor 6y ago
  Test it in production.
  - jpxw 6y ago
    ... which is a terrible idea
    - slg 6y ago
      That is how a decent chuck of macroeconomics works. There are some things that exist at such a scale that you can't accurately experiment with them. You can only theorize, run models or simulations, and observe real world results after implementation.
      - thelean12 6y ago
        The problem is that anything besides regulated capitalism with some social features built in has utterly failed. And when it fails, it fails HARD. So implementing something so drastic without knowing if it'll work is extremely risky.
        slg 6y ago
        >The problem is that anything besides regulated capitalism with some social features built in has utterly failed. And when it fails, it fails HARD. Would you say that every country on the planet is either "capitalism with some social features built in" or is currently failing hard? And if all those systems are capitalistic, what specifically pushes UBI over the edge into being something that isn't capitalism? From an implementation perspective, UBI is simply an adjustment of the income tax rate including allowing that rate to be negative. It has nothing to do with ownership, markets, or many of the other mainstays of capitalism.
throwaway_kufu 6y ago
> where is the proof that it won't hurt long term productivity, By that measure couldn’t we say the Capitalism pilot program has failed? Sure productivity is ever increasing and business productivity per employee is at historic highs...but all that productivity has only resulted in a larger wealth gap with all the benefits going to the investor class and net negative to workers whose real wages have been stagnant for decades?
- jpxw 6y ago
  Capitalism has lifted billions of people out of poverty.
- garmaine 6y ago
  Lol, no. Just no. The capitalism experiment is everything that has happened from the industrial revolution (really, earlier) forward. Compare with the 19th, 18th, or 17th century, and you’ll find today’s wealth gap is smaller, people live more prosperous lives, happiness indices improved, etc. Not to mention the literally billions of lives that wouldn’t otherwise exist at all.
  - throwaway_kufu 6y ago
    The old billions wouldn’t even be alive but for capitalism. Well if capitalism is responsible for all the good it must be responsible for all the bad, like industrial warfare like WWI and WWII.
    - garmaine 6y ago
      Because war didn’t exist before capitalism /s Per-capita violence has been in steady decline for this time period.
      - throwaway_kufu 6y ago
        Because people weren’t born before capitalism? “Per captia” violence? That is a hell of a qualifier you need.
yboris 6y ago
I'm puzzled why we can't phase it in over time. Start with $100/month. The US can handle that. And then ramp it up as we see fit.
- notahacker 6y ago
  The purpose of the UBI is to replace welfare systems by ensuring every citizen receives roughly enough money for the average person to live off. Paying everybody nowhere near enough to live off [and keeping the welfare state in place] doesn't tell us very much about how they would respond to that. Though one advantage over the small scale studies would be finding out how much citizens push back against even a comparatively small tax rise to pay for it....
  - gns24 6y ago
    One of the problems with UBI is that a lot of people who need support can't live off what the average person needs to live off. People with disabilities etc. may well need more, so UBI doesn't replace as much as its proponents sometimes suggest.
- gns24 6y ago
  Once you had a basic income like this it would have the nice effect of then being able to talk about (and implement) other policies in a revenue-neutral way. For example a government interested in reducing CO2 emissions could introduce a tax on motor fuel of say £1/litre and balance that with an increase of the basic income of £75/month.
- verdverm 6y ago
  Let's vote for the candidate which will give us the most money... seems like a slippery slope
  - dane-pgp 6y ago
    Let's vote for (and give "campaign contributions" to) the candidate who will lower our taxes the most... seems like a slippery slope.
simion314 6y ago
Still, skeptics like might have 1000 reasons why it won't work, such small studies could reduce the 1000 to a smaller number. If the study would have failed you would probably be happy and not argue that it was not correct and we should do it on a full country. If the study fails we give up, then if it does not fail we can try new larger studies.
danck 6y ago
You are suggesting that these are quotes from the article. They are not. Also in the linked interview one of the scientists leading the study openly admits these points: “We cannot simulate a world of UBI. [...] We will not find out anything about these economic consequences, not even about possible power shifts between employers and employees, the amount of net costs or the effects on migration.” This study is meant to add data to the picture and improve the discourse.
- missedthecue 6y ago
  Thank you for pointing that out. It's not my intention to mislead. I've edited to clarify.
Florin_Andrei 6y ago
> A 120 person 36 month trial program cannot answer any of these questions. So what are the questions that such a trial could answer?
- gameman144 6y ago
  * What people would do with bounded windfall benefits (as opposed to lifetime benefits) * How spending/lifestyle habits of bounded windfall recipients compare with non-recipients * Whether receiving free money makes individuals happier or more productive over a three year period.
marta_morena_25 6y ago
"No, they prove that people who are in a program that is very clearly temporary will not end their careers for a short pilot program. This means nothing." This is a really good point. But it will apply to the government program as well. Just because we have such a program at full scale, doesn't guarantee anything. * The UBI might not always be above the poverty line * The UBI might be terminated at any time, or after an election (That can be partly covered with proper laws, but nobody would go that far without trying it out in the first place) * The UBI might get strings attached, like "needs to work parttime", etc. All in all, it's a chicken egg problem. The thing is: If I have saved maybe a million in cash, UBI would encourage me to just stop working. Period. UBI will cover a good chunk of the basic living expenses (especially if you don't have to live near hotspots due to work anymore) and then the investment winnings of my savings would cover me for life. That of course is still possible without UBI, but UBI just makes it that much more approachable, since you don't depend on investment to stay afloat. I.e. "I need to win with my investments for this to work" becomes "If I want to buy me something besides food and rent, I need to make good investments". Those two are like day and night. I am not convinced that UBI will result in overall improvements. I would love UBI and it would enable me to stop working more quickly. Will I still provide value to humanity? Very likely, I have lots of ideas for what to do. Will I still provide value to the economy? Not nearly as much as before. That alone tells me that UBI is probably not a good idea, because it empowers the middle-class to retire early, doesn't do much for the poor (instead of a shitty job, they can now do nothing, except paint and sing perhaps, i.e. being creative; but they will still be poor nontheless) . It also doesn't do anything for the rich.
- orangecat 6y ago
  If I have saved maybe a million in cash, UBI would encourage me to just stop working. You'd already be "encouraged" to take a lower-paying part time and/or less stressful job. But most millionaires aren't going to be satisfied with the downgraded lifestyle that would entail. doesn't do much for the poor It does a lot for the poor. It lets them earn additional money without worrying about losing benefits, which is a big problem with current welfare systems. And more importantly it gives them negotiating power; they can walk away from abusive employers without the worry of homelessness or hunger.
thatcat 6y ago
UBI should be trialed in parallel with a legalization program, which would allow those metrics to be collected and solve other crime problems by creating unemployed criminals and giving them a stipend so that they don't necessarily need to continue crime for economic subsistence.
skybrian 6y ago
Any UBI could be entirely reversed by an equal and opposite tax. Of course this would be pointless, but it shows that there are many possibilities, depending on what sort of taxes you combine it with, and some of them are certainly feasible because the net effect is small. UBI is largely about symbolic equality, the kindergarten-level fairness of everyone getting the same amount. That’s important because symbols of equality are important. But from an economics standpoint it’s not a complete plan, and it’s a bit nebulous because the choice of which taxes to include in your analysis is arbitrary. Assuming a progressive tax system, though, it does mean automatic benefits for people without other income and more financial security for almost everyone, assuming you think you have some risk of losing your job. This is similar to insurance. We don’t buy it because we think we will make money on average.
- adamsea 6y ago
  > But from an economics standpoint it’s not a complete plan ... I don't know much about the economics. Curious, how so? > UBI is largely about symbolic equality, the kindergarten-level fairness of everyone getting the same amount. That’s important because symbols of equality are important. IMHO, what you described is justice. Equality. Not kindergarten-level, or, rather, I guess it is, in the sense of it being fundamental to our moral understanding : ).
  - skybrian 6y ago
    “In its majestic equality, the law forbids rich and poor alike to sleep under bridges, beg in the streets and steal loaves of bread.” Most apparently-equal rules aren’t actually equal in their effects. Charging everyone the same amount usually hurts poor people more. UBI is one of the few apparently-equal policies that would likely help the poor more than the rich.
    - mason55 6y ago
      > In its majestic equality, the law forbids rich and poor alike to sleep under bridges, beg in the streets and steal loaves of bread. Yes and on top of the obvious absurdity of this statement, there is a second level. As long as we punish things with fines they are effectively legal if you're rich enough.
IanDrake 6y ago
Exactly. Until an entire nation with its own currency tries this there is no way to measure the effects. To me economics is about natural law, which is inescapable. Money is value and it is not nature's way to give something of value for nothing.
jkinudsjknds 6y ago
Personally I think the larger concerns are that if you provide UBI to everyone (not 120 random people) you're going to see severe distortions on the local economy that will encourage outsourcing wherever possible. Basic economic reasoning states that income has declining marginal utility, so wages will need to rise to incentivize people to do the work they were doing previously. Or it'll just leave. Feels unsustainable to me.
mmhsieh 6y ago
"What UBI skeptical people want to know is where is the proof that we can afford to tax ourselves to pay ourselves, where is the proof that it won't hurt long term productivity, and where is the proof that it doesn't cause inflation. A 120 person 36 month trial program cannot answer any of these questions." Yes, but some skeptics really do object to UBI on moral-based reasons - indolence, buying drugs, laziness, and the joy of work and all that. If it turned out that all the money went to drugs and people got depressed, it would be a good argument against UBI.
- baconandeggs 6y ago
  Will it? People will just say we need better mental health treatments. I don't think there is a good argument against UBI that they'll accept. But of course, they don't answer the real question which is who's gonna do all the producing? The ones producing are clearly gonna be the ones being taken advantage of on UBI, even if it works 100% as expected.
  - zhoujianfu 6y ago
    I wouldn’t really call it “being taken advantage of”.. in a real UBI, you’d only produce something if you were going to get paid enough that you want to do it. Nobody will have to produce anything they don’t want to, now that the UBI removes the fear of where their next meal will come from. I know I personally would still want to produce things to take home MORE than the UBI.
    - tie_ 6y ago
      Well, the UBI money you get would be used to buy something that someone else has produced (an iPhone, a piece of bread, a bottle of wine, etc.). In this sense, the UBI that you are getting represents _goods_ that _someone else_ is producing (and "donating" into the system in the form of taxes). I find this easier to reason about when you take the concept of "money" out of the equation. So,oOption A is that you "donate" more goods into the system than the UBI you are consuming, which is all fine and dandy for the rest of us. Option B is that you are consuming more value that you are donating, which is less fun for the rest. So, some people will need to overproduce in order for the people who under-produce to get their UBI worth of goods. Mind you, this isn't different than the current state of affairs. The big question for me is how would the introduction of UBI ultimately affect that ratio, given that you would be less disincentivized to stay with the underproducing group?
nemothekid 6y ago
>What UBI skeptical people want to know is where is the proof that we can afford to tax ourselves to pay ourselves, where is the proof that it won't hurt long term productivity, and where is the proof that it doesn't cause inflation. A 120 person 36 month trial program cannot answer any of these questions. There is no proof that would actually appease you. There is no way you could measure the effect on inflation without having an entire currency on UBI. There is no way we could be sure about the macroeconomic effects of UBI without first implementing it.
- rhino369 6y ago
  If it is true that you cannot experimentally determine the impact, that's a pretty good reason to never try UBI.
  - nemothekid 6y ago
    >If it is true that you cannot experimentally determine the impact, that's a pretty good reason to never try UBI. Ok, so we should never try anything related to macroeconomics? Let's also never change the tax rate ever again.
  - throwaway57002 6y ago
    By that argument, and given the rigorousness of economics as a field, pretty much no policy should ever be implemented.
- luckylion 6y ago
  > There is no proof that would actually appease you. That's not a reason to not even try to offer anything though. You could start with a trial of these 120 persons (select from all classes of society), give them UBI and double their taxes to make it realistic, because the UBI has to be paid somehow. If plenty of them would have less money during this trial and still find UBI worth it, that would be a strong signal. Few people would agree to be part of that study though, and one might argue that those that would (i.e. by applying) won't be representative of society at large. Testing only the spending side of UBI is fun but useless, especially with that setting.
austincheney 6y ago
There is also the potential for inflation and artificially increased exclusivity, which likewise is not determinate from a temporary or short term project. In order to measure the impact on inflation the experiment would have to be widespread and longitudinal just like any other potential cause of inflation.
Aperocky 6y ago
taxes will definitely rise, inflation I don't think so. Everyone has been saying that everything will be so much more expensive if we just dumped money onto the market. Well that already happened, did anything got more expensive? Stocks, but what else? If things became more expensive, then people can compete to reduce that price in the market. For some reason detractors of UBI have a micro focus on the demand side of equation.
LatteLazy 6y ago
Three years is more security than basically any normal person has in our society. It's certainly enough time to spend 2.5 years playing computer games and then go job hunting again. It's also enough time to get a serious qualification (not a full degree sadly). I don't think this is perfect. Proof is hard to come by in social "science". But this seems a lot better than most other ubi "studies" to me...
djrogers 6y ago
> What UBI skeptical people want to know is where is the proof that we can afford to tax ourselves to pay ourselves What UBI skeptics seem to be avoiding, ignoring, or unaware of, is just how prevalent this situation already is. Most of the UBI fans I know want to replace the overlapping, redundant, and inefficient welfare systems currently in place with a simple, efficient, and universal benefit.
- karpierz 6y ago
  How inefficient are welfare systems, and how is that measured?
  - dane-pgp 6y ago
    One measure is the amount of unclaimed benefits, which can amount to billions of pounds per year in the UK: https://www.bbc.co.uk/news/business-17139088 https://www.bbc.co.uk/news/business-17139088
woodpanel 6y ago
To play devil's advocate here: Yes, with UBI we're basically taxing ourselves to pay ourselves, it will hurt productivity and will cause inflation. But at least in a country like Germany, where I live, that is already happening for decades via our ever-growing, convoluted, amounts of government welfare programs, subsidies and redistribution schemes. A UBI would then at least have the benefit of cutting out the bureaucrat middle man.
- mytailorisrich 6y ago
  If UBI means giving everyone 18 and older $1,400 per month (like in this trial) then it is simply unaffordable and unrealistic, even for Germany. If this expense is compensated by extra taxes on individuals then it is pointless. If it means making sure that unemployed people receive a guaranteed minimum income then it already exists. If it means merging all benefits into a single one then it is just a simplication and also already exists, e.g. recently in the UK. UBI, as in 'everyone gets a payment', only makes sense if there is a source of wealth that does not depend on people to tap into. That's why it is often discussed in the context of massive automation, because then it has merit (basically robots work and you receive their 'wages').
  - rorykoehler 6y ago
    You should read Andrew Yang's plan on how to pay for it. It is far more affordable than you think.
    - mytailorisrich 6y ago
      You do not say what this plan is and what UBI you are talking about. In my example, which is what this trial does, it is plainly unaffordable.
      - rorykoehler 6y ago
        Read his plan
rrrrrrrrrrrryan 6y ago
I mean, these are pilots. They absolutely could result in the participants quitting their jobs, or just spending the money on booze and drugs and becoming unproductive and unhappy. This appears to not be the case so far, so the results may justify a larger-scale, longer-term program, which may eventually provide enough evidence for a smaller nation or state to take the leap of rolling out a full-fledged UBI. You're interested in the scalability of the thing, but we're still in the proof-of-concept phase, merely trying to deduce whether or not the idea actually has any potential, or if it's completely dead-on-arrival.
anemoiac 6y ago
> ...where is the proof that it won't hurt long term productivity, and where is the proof that it doesn't cause inflation[?] Assuming we could obtain reliable proof that UBI reduces productivity and/or increases inflation, that doesn't necessarily imply that it's an undesirable policy. The economy exists to serve humanity, not to maximize productivity or minimize inflation. It's certainly possible that a policy could provide an overall benefit to humanity while simultaneously reducing economic productivity and/or increasing inflation by some amount.
- missedthecue 6y ago
  The economy is not some ethereal beast that we must tame into doing our bidding. It is the way we measure production, consumption, and trade by humans. It cannot "serve" anyone. It is you and me and everyone else behaving in rational self interest.
  - anemoiac 6y ago
    Ok, then let’s abolish all laws regarding economic activity (including private property) and abandon any related social conventions. Apparently they’re superfluous.
scarmig 6y ago
> No, they prove that people who are in a program that is very clearly temporary will not end their careers for a short pilot program. This means nothing. They provide lower bounds on the amount of time you can offer a guaranteed income without adverse effects on people's employment. Going to an extreme, if you offer people a 40 year UBI and they don't quit, then that's pretty damn strong evidence. 3 years offers some evidence; for particular subpopulations with short time horizons, if they keep on working for three years on UBI, I'd bet almost arbitrary amounts of money they'll keep on working indefinitely. > No. If you make $1k from a job and $1k from a pilot program each month, you spend the $1k from the pilot on legitimate bills and now you have $1k to spend however you like. The study can't trace that money. (This isn't to say everyone on UBI uses it for drugs, rather, it's to point out that you cannot deduce they don't just by tracing the way the transfer payments are spent) I believe these studies rely on self-reported alcohol etc consumption. The issues with self-reported consumption are already well-known and well-characterized. > No kidding. You gave someone several thousand dollars no strings attached in a situation where neither taxes nor inflation would rise as a result. These things are always worth verifying. One of the criticisms against a UBI is that it'll create a population of depressed losers who never interact with society. If people's lives and happiness are improved, that addresses that criticism. > What UBI skeptical people want to know is where is the proof that we can afford to tax ourselves to pay ourselves, where is the proof that it won't hurt long term productivity, and where is the proof that it doesn't cause inflation. A 120 person 36 month trial program cannot answer any of these questions. Could anything short of a full UBI implementation work as proof for you? If not, can you suggest what would? If, say, you took a random selection of 1000 people and promised them a lifelong UBI, and their labor force participation and levels of happiness stayed the same over the first ten years of the program, would that serve as proof to you?
- Alupis 6y ago
  > if you offer people a 40 year UBI and they don't quit, then that's pretty damn strong evidence I think that isn't a correct assumption either. 40 yeas is a long time. Longer than many HN readers here have been alive. In the last 40 years, how many times has the government performed an about-face on some economic policy or whatever? Too many times for someone to just throw away their career until sufficient time has passed that is becomes part of society. That may take an entire generation (see Social Security in the US, which now is a permanent fixture).
jliptzin 6y ago
They should do a lottery system. Instead of giving $300 million to one person, give 1,000 people $1,000 / mo for life and see what happens.
nomel 6y ago
What about very slowly ramping it up? For example, over 20 years? If a problem begins to appear, it could be slowly ramped back down. I suppose this wouldn't work politically, since the first politician that tried to ramp down the income to save the economy would be swiftly booted to the curb.
rorykoehler 6y ago
As a big fan of UBI this infuriates me. We can't test it unless we do it nationwide. In business school they hammer into you that "cashflow is the lifeblood of the business". It stands to reason that the same goes for the economy so why are we messing about with pointless 120 person trials. That isn't testing the right aspect of the system. We need to test it's systemic impact not the impact it has on individuals.
rumanator 6y ago
> No, they prove that people who are in a program that is very clearly temporary will not end their careers for a short pilot program. This means nothing. This argument reads like a strawman, and is detached from reality. The argument about the risk of people quitting their job because of basic income is based on the idea that those who are forced to work shitty jobs to have a source of income (i.e., wage slavery) won't have to subject themselves to it if they already have a source of income. More importantly, people who live in wage slavery don't have careers, they have a job. They are bound to an activity or even an employer who ensures they have a paycheck as long as they do their job. I mean, do you honestly believe that a minimum wage job doing non-specialized tasks that anyone anywhere can do and can replace you in a moment's notice counts as a career? Of course it isn't. It's just something you do to pay the bills. Do you honestly believe no one would quit that as soon as they have a way to pay the bills? > No. If you make $1k from a job and $1k from a pilot program each month, you spend the $1k from the pilot on legitimate bills and now you have $1k to spend however you like. Your take on the program is very disingenuous, specially in the way you try to frame the old job as being the provider of all the brand new goodies and luxuries and fancy spending while the new source of income adds nothing more beyond taking care of the expenses that were already taken care of. Suffice to say, I'd participants were stuck with their old income, they wouldn't be able to afford anything, would they? Basic income supplies an income baseline. That means people cease to be tied to a repulsive job just to make ends meet. How they generate disposable income is up to them. With basic income you're free to pick high-reward but low-paying jobs, or even no job at all if you are willing to live a frugal life. That's the kind of change that will be studied in these programs.
ace_of_spades 6y ago
Who said that any empirical study could prove anything? Except in mathematics you simply cannot prove anything. There is no way to guarantee that with UBI the things you mention won‘t happen. In the same vein, there is no way to guarantee that those things won‘t happen WITHOUT UBI. The mindset of holding things constant is pretty short sighted in a world where things are radically changing. We have to reinvent and adjust our societies as we go along and learn from our collective experiences. Trials like this help us collect data about the consequences of complex interventions and seem to be a useful way to test the waters.

jpxw 6y ago

They also only give the money to a small number of people Not to mention that the real question is whether UBI makes sense economically, not whether people like money, which is almost indisputable

notahacker 6y ago
Strip away the clickbait 'Germany begins' headline and it's 'a pro-UBI lobbying group adds 120 people to its latest trial'
Proven 6y ago
> Not to mention that the real question is whether UBI makes sense economically It's not, because we already know that it can't possibly work.
MisterBastahrd 6y ago
The thing about government programs that hand out cash is that the money will be circulated back into the local economy most of the time, which is a net benefit (I think it would be a net positive if the money was required to be spent locally if the beneficiary makes above a certain income). It's not like it's getting thrown down a black hole. Even if a person is making great money, that additional money is more likely to be spent on higher quality local services, aside from online purchases from places like Amazon.
- scohesc 6y ago
  I would like to see a source for that if you could provide one :) If I was working full-time and could live comfortably off that plus extra UBI, I think the majority of people would spend it on more luxurious goods (phones, laptops, drugs, etc.) which are mostly ran by/on outside/blackmarket economies... We're not sure of the magic number/ratio between "person will use UBI for basic, locally-sourced needs" vs. "person will use UBI for 'wants', sourced elsewhere" and I think there's so many factors that it will be hard (almost impossible) to come up with a palpable answer.
  - MisterBastahrd 6y ago
    Source? Reality. Look at the savings and investment rates for the poor. Where do you think the money is going? Most people still source their large purchases locally, even if it's at a store chain, which keeps the local economy going because there are plenty of services used at those stores that are local. A guy who goes and buys a nice new luxury TV from a local Best Buy is still supporting local businesses indirectly because that Best Buy is going to have multiple contracts with local businesses for services.
- missedthecue 6y ago
  >The thing about government programs that hand out cash is that the money will be circulated back into the local economy most of the time, which is a net benefit How is taxing the local economy to spend in the local economy (and some abroad) a net benefit? That's just transfer payments with some friction loss.

asah 6y ago

This is one of the best summaries of UBI that I have seen. UBI proponents are advised to read this carefully.

boardwaalk 6y ago
I don’t think any honest UBI proponents would dispute it — or be particularly surprised with what the GP said. It’s obvious that significant change to the economy would have hard to predict effects when human behavior is at the center. That doesn’t mean it’s not worth it.

slg 6y ago

As a general supporter of UBI, I'm not sure there is any way to actually test UBI without just implementing it at full scale. The U is an important part of it and like you said the expectation of permanence is crucial to seeing a change in long term planning and behaviors.

ghthor 6y ago
Test it in production.
- jpxw 6y ago
  ... which is a terrible idea
  - slg 6y ago
    That is how a decent chuck of macroeconomics works. There are some things that exist at such a scale that you can't accurately experiment with them. You can only theorize, run models or simulations, and observe real world results after implementation.
    - thelean12 6y ago
      The problem is that anything besides regulated capitalism with some social features built in has utterly failed. And when it fails, it fails HARD. So implementing something so drastic without knowing if it'll work is extremely risky.
      - slg 6y ago
        >The problem is that anything besides regulated capitalism with some social features built in has utterly failed. And when it fails, it fails HARD. Would you say that every country on the planet is either "capitalism with some social features built in" or is currently failing hard? And if all those systems are capitalistic, what specifically pushes UBI over the edge into being something that isn't capitalism? From an implementation perspective, UBI is simply an adjustment of the income tax rate including allowing that rate to be negative. It has nothing to do with ownership, markets, or many of the other mainstays of capitalism.

throwaway_kufu 6y ago

> where is the proof that it won't hurt long term productivity, By that measure couldn’t we say the Capitalism pilot program has failed? Sure productivity is ever increasing and business productivity per employee is at historic highs...but all that productivity has only resulted in a larger wealth gap with all the benefits going to the investor class and net negative to workers whose real wages have been stagnant for decades?

jpxw 6y ago
Capitalism has lifted billions of people out of poverty.
garmaine 6y ago
Lol, no. Just no. The capitalism experiment is everything that has happened from the industrial revolution (really, earlier) forward. Compare with the 19th, 18th, or 17th century, and you’ll find today’s wealth gap is smaller, people live more prosperous lives, happiness indices improved, etc. Not to mention the literally billions of lives that wouldn’t otherwise exist at all.
- throwaway_kufu 6y ago
  The old billions wouldn’t even be alive but for capitalism. Well if capitalism is responsible for all the good it must be responsible for all the bad, like industrial warfare like WWI and WWII.
  - garmaine 6y ago
    Because war didn’t exist before capitalism /s Per-capita violence has been in steady decline for this time period.
    - throwaway_kufu 6y ago
      Because people weren’t born before capitalism? “Per captia” violence? That is a hell of a qualifier you need.

yboris 6y ago

I'm puzzled why we can't phase it in over time. Start with $100/month. The US can handle that. And then ramp it up as we see fit.

notahacker 6y ago
The purpose of the UBI is to replace welfare systems by ensuring every citizen receives roughly enough money for the average person to live off. Paying everybody nowhere near enough to live off [and keeping the welfare state in place] doesn't tell us very much about how they would respond to that. Though one advantage over the small scale studies would be finding out how much citizens push back against even a comparatively small tax rise to pay for it....
- gns24 6y ago
  One of the problems with UBI is that a lot of people who need support can't live off what the average person needs to live off. People with disabilities etc. may well need more, so UBI doesn't replace as much as its proponents sometimes suggest.
gns24 6y ago
Once you had a basic income like this it would have the nice effect of then being able to talk about (and implement) other policies in a revenue-neutral way. For example a government interested in reducing CO2 emissions could introduce a tax on motor fuel of say £1/litre and balance that with an increase of the basic income of £75/month.
verdverm 6y ago
Let's vote for the candidate which will give us the most money... seems like a slippery slope
- dane-pgp 6y ago
  Let's vote for (and give "campaign contributions" to) the candidate who will lower our taxes the most... seems like a slippery slope.

simion314 6y ago

Still, skeptics like might have 1000 reasons why it won't work, such small studies could reduce the 1000 to a smaller number. If the study would have failed you would probably be happy and not argue that it was not correct and we should do it on a full country. If the study fails we give up, then if it does not fail we can try new larger studies.

danck 6y ago

You are suggesting that these are quotes from the article. They are not. Also in the linked interview one of the scientists leading the study openly admits these points: “We cannot simulate a world of UBI. [...] We will not find out anything about these economic consequences, not even about possible power shifts between employers and employees, the amount of net costs or the effects on migration.” This study is meant to add data to the picture and improve the discourse.

missedthecue 6y ago
Thank you for pointing that out. It's not my intention to mislead. I've edited to clarify.

Florin_Andrei 6y ago

> A 120 person 36 month trial program cannot answer any of these questions. So what are the questions that such a trial could answer?

gameman144 6y ago
* What people would do with bounded windfall benefits (as opposed to lifetime benefits) * How spending/lifestyle habits of bounded windfall recipients compare with non-recipients * Whether receiving free money makes individuals happier or more productive over a three year period.

marta_morena_25 6y ago

"No, they prove that people who are in a program that is very clearly temporary will not end their careers for a short pilot program. This means nothing." This is a really good point. But it will apply to the government program as well. Just because we have such a program at full scale, doesn't guarantee anything. * The UBI might not always be above the poverty line * The UBI might be terminated at any time, or after an election (That can be partly covered with proper laws, but nobody would go that far without trying it out in the first place) * The UBI might get strings attached, like "needs to work parttime", etc. All in all, it's a chicken egg problem. The thing is: If I have saved maybe a million in cash, UBI would encourage me to just stop working. Period. UBI will cover a good chunk of the basic living expenses (especially if you don't have to live near hotspots due to work anymore) and then the investment winnings of my savings would cover me for life. That of course is still possible without UBI, but UBI just makes it that much more approachable, since you don't depend on investment to stay afloat. I.e. "I need to win with my investments for this to work" becomes "If I want to buy me something besides food and rent, I need to make good investments". Those two are like day and night. I am not convinced that UBI will result in overall improvements. I would love UBI and it would enable me to stop working more quickly. Will I still provide value to humanity? Very likely, I have lots of ideas for what to do. Will I still provide value to the economy? Not nearly as much as before. That alone tells me that UBI is probably not a good idea, because it empowers the middle-class to retire early, doesn't do much for the poor (instead of a shitty job, they can now do nothing, except paint and sing perhaps, i.e. being creative; but they will still be poor nontheless) . It also doesn't do anything for the rich.

orangecat 6y ago
If I have saved maybe a million in cash, UBI would encourage me to just stop working. You'd already be "encouraged" to take a lower-paying part time and/or less stressful job. But most millionaires aren't going to be satisfied with the downgraded lifestyle that would entail. doesn't do much for the poor It does a lot for the poor. It lets them earn additional money without worrying about losing benefits, which is a big problem with current welfare systems. And more importantly it gives them negotiating power; they can walk away from abusive employers without the worry of homelessness or hunger.

thatcat 6y ago

UBI should be trialed in parallel with a legalization program, which would allow those metrics to be collected and solve other crime problems by creating unemployed criminals and giving them a stipend so that they don't necessarily need to continue crime for economic subsistence.

skybrian 6y ago

Any UBI could be entirely reversed by an equal and opposite tax. Of course this would be pointless, but it shows that there are many possibilities, depending on what sort of taxes you combine it with, and some of them are certainly feasible because the net effect is small. UBI is largely about symbolic equality, the kindergarten-level fairness of everyone getting the same amount. That’s important because symbols of equality are important. But from an economics standpoint it’s not a complete plan, and it’s a bit nebulous because the choice of which taxes to include in your analysis is arbitrary. Assuming a progressive tax system, though, it does mean automatic benefits for people without other income and more financial security for almost everyone, assuming you think you have some risk of losing your job. This is similar to insurance. We don’t buy it because we think we will make money on average.

adamsea 6y ago
> But from an economics standpoint it’s not a complete plan ... I don't know much about the economics. Curious, how so? > UBI is largely about symbolic equality, the kindergarten-level fairness of everyone getting the same amount. That’s important because symbols of equality are important. IMHO, what you described is justice. Equality. Not kindergarten-level, or, rather, I guess it is, in the sense of it being fundamental to our moral understanding : ).
- skybrian 6y ago
  “In its majestic equality, the law forbids rich and poor alike to sleep under bridges, beg in the streets and steal loaves of bread.” Most apparently-equal rules aren’t actually equal in their effects. Charging everyone the same amount usually hurts poor people more. UBI is one of the few apparently-equal policies that would likely help the poor more than the rich.
  - mason55 6y ago
    > In its majestic equality, the law forbids rich and poor alike to sleep under bridges, beg in the streets and steal loaves of bread. Yes and on top of the obvious absurdity of this statement, there is a second level. As long as we punish things with fines they are effectively legal if you're rich enough.

IanDrake 6y ago

Exactly. Until an entire nation with its own currency tries this there is no way to measure the effects. To me economics is about natural law, which is inescapable. Money is value and it is not nature's way to give something of value for nothing.

jkinudsjknds 6y ago

Personally I think the larger concerns are that if you provide UBI to everyone (not 120 random people) you're going to see severe distortions on the local economy that will encourage outsourcing wherever possible. Basic economic reasoning states that income has declining marginal utility, so wages will need to rise to incentivize people to do the work they were doing previously. Or it'll just leave. Feels unsustainable to me.

mmhsieh 6y ago

"What UBI skeptical people want to know is where is the proof that we can afford to tax ourselves to pay ourselves, where is the proof that it won't hurt long term productivity, and where is the proof that it doesn't cause inflation. A 120 person 36 month trial program cannot answer any of these questions." Yes, but some skeptics really do object to UBI on moral-based reasons - indolence, buying drugs, laziness, and the joy of work and all that. If it turned out that all the money went to drugs and people got depressed, it would be a good argument against UBI.

baconandeggs 6y ago
Will it? People will just say we need better mental health treatments. I don't think there is a good argument against UBI that they'll accept. But of course, they don't answer the real question which is who's gonna do all the producing? The ones producing are clearly gonna be the ones being taken advantage of on UBI, even if it works 100% as expected.
- zhoujianfu 6y ago
  I wouldn’t really call it “being taken advantage of”.. in a real UBI, you’d only produce something if you were going to get paid enough that you want to do it. Nobody will have to produce anything they don’t want to, now that the UBI removes the fear of where their next meal will come from. I know I personally would still want to produce things to take home MORE than the UBI.
  - tie_ 6y ago
    Well, the UBI money you get would be used to buy something that someone else has produced (an iPhone, a piece of bread, a bottle of wine, etc.). In this sense, the UBI that you are getting represents _goods_ that _someone else_ is producing (and "donating" into the system in the form of taxes). I find this easier to reason about when you take the concept of "money" out of the equation. So,oOption A is that you "donate" more goods into the system than the UBI you are consuming, which is all fine and dandy for the rest of us. Option B is that you are consuming more value that you are donating, which is less fun for the rest. So, some people will need to overproduce in order for the people who under-produce to get their UBI worth of goods. Mind you, this isn't different than the current state of affairs. The big question for me is how would the introduction of UBI ultimately affect that ratio, given that you would be less disincentivized to stay with the underproducing group?

nemothekid 6y ago

>What UBI skeptical people want to know is where is the proof that we can afford to tax ourselves to pay ourselves, where is the proof that it won't hurt long term productivity, and where is the proof that it doesn't cause inflation. A 120 person 36 month trial program cannot answer any of these questions. There is no proof that would actually appease you. There is no way you could measure the effect on inflation without having an entire currency on UBI. There is no way we could be sure about the macroeconomic effects of UBI without first implementing it.

rhino369 6y ago
If it is true that you cannot experimentally determine the impact, that's a pretty good reason to never try UBI.
- nemothekid 6y ago
  >If it is true that you cannot experimentally determine the impact, that's a pretty good reason to never try UBI. Ok, so we should never try anything related to macroeconomics? Let's also never change the tax rate ever again.
- throwaway57002 6y ago
  By that argument, and given the rigorousness of economics as a field, pretty much no policy should ever be implemented.
luckylion 6y ago
> There is no proof that would actually appease you. That's not a reason to not even try to offer anything though. You could start with a trial of these 120 persons (select from all classes of society), give them UBI and double their taxes to make it realistic, because the UBI has to be paid somehow. If plenty of them would have less money during this trial and still find UBI worth it, that would be a strong signal. Few people would agree to be part of that study though, and one might argue that those that would (i.e. by applying) won't be representative of society at large. Testing only the spending side of UBI is fun but useless, especially with that setting.

austincheney 6y ago

There is also the potential for inflation and artificially increased exclusivity, which likewise is not determinate from a temporary or short term project. In order to measure the impact on inflation the experiment would have to be widespread and longitudinal just like any other potential cause of inflation.

Aperocky 6y ago

taxes will definitely rise, inflation I don't think so. Everyone has been saying that everything will be so much more expensive if we just dumped money onto the market. Well that already happened, did anything got more expensive? Stocks, but what else? If things became more expensive, then people can compete to reduce that price in the market. For some reason detractors of UBI have a micro focus on the demand side of equation.

LatteLazy 6y ago

Three years is more security than basically any normal person has in our society. It's certainly enough time to spend 2.5 years playing computer games and then go job hunting again. It's also enough time to get a serious qualification (not a full degree sadly). I don't think this is perfect. Proof is hard to come by in social "science". But this seems a lot better than most other ubi "studies" to me...

djrogers 6y ago

> What UBI skeptical people want to know is where is the proof that we can afford to tax ourselves to pay ourselves What UBI skeptics seem to be avoiding, ignoring, or unaware of, is just how prevalent this situation already is. Most of the UBI fans I know want to replace the overlapping, redundant, and inefficient welfare systems currently in place with a simple, efficient, and universal benefit.

karpierz 6y ago
How inefficient are welfare systems, and how is that measured?
- dane-pgp 6y ago
  One measure is the amount of unclaimed benefits, which can amount to billions of pounds per year in the UK: https://www.bbc.co.uk/news/business-17139088 https://www.bbc.co.uk/news/business-17139088

woodpanel 6y ago

To play devil's advocate here: Yes, with UBI we're basically taxing ourselves to pay ourselves, it will hurt productivity and will cause inflation. But at least in a country like Germany, where I live, that is already happening for decades via our ever-growing, convoluted, amounts of government welfare programs, subsidies and redistribution schemes. A UBI would then at least have the benefit of cutting out the bureaucrat middle man.

mytailorisrich 6y ago
If UBI means giving everyone 18 and older $1,400 per month (like in this trial) then it is simply unaffordable and unrealistic, even for Germany. If this expense is compensated by extra taxes on individuals then it is pointless. If it means making sure that unemployed people receive a guaranteed minimum income then it already exists. If it means merging all benefits into a single one then it is just a simplication and also already exists, e.g. recently in the UK. UBI, as in 'everyone gets a payment', only makes sense if there is a source of wealth that does not depend on people to tap into. That's why it is often discussed in the context of massive automation, because then it has merit (basically robots work and you receive their 'wages').
- rorykoehler 6y ago
  You should read Andrew Yang's plan on how to pay for it. It is far more affordable than you think.
  - mytailorisrich 6y ago
    You do not say what this plan is and what UBI you are talking about. In my example, which is what this trial does, it is plainly unaffordable.
    - rorykoehler 6y ago
      Read his plan

rrrrrrrrrrrryan 6y ago

I mean, these are pilots. They absolutely could result in the participants quitting their jobs, or just spending the money on booze and drugs and becoming unproductive and unhappy. This appears to not be the case so far, so the results may justify a larger-scale, longer-term program, which may eventually provide enough evidence for a smaller nation or state to take the leap of rolling out a full-fledged UBI. You're interested in the scalability of the thing, but we're still in the proof-of-concept phase, merely trying to deduce whether or not the idea actually has any potential, or if it's completely dead-on-arrival.

anemoiac 6y ago

> ...where is the proof that it won't hurt long term productivity, and where is the proof that it doesn't cause inflation[?] Assuming we could obtain reliable proof that UBI reduces productivity and/or increases inflation, that doesn't necessarily imply that it's an undesirable policy. The economy exists to serve humanity, not to maximize productivity or minimize inflation. It's certainly possible that a policy could provide an overall benefit to humanity while simultaneously reducing economic productivity and/or increasing inflation by some amount.

missedthecue 6y ago
The economy is not some ethereal beast that we must tame into doing our bidding. It is the way we measure production, consumption, and trade by humans. It cannot "serve" anyone. It is you and me and everyone else behaving in rational self interest.
- anemoiac 6y ago
  Ok, then let’s abolish all laws regarding economic activity (including private property) and abandon any related social conventions. Apparently they’re superfluous.

scarmig 6y ago

> No, they prove that people who are in a program that is very clearly temporary will not end their careers for a short pilot program. This means nothing. They provide lower bounds on the amount of time you can offer a guaranteed income without adverse effects on people's employment. Going to an extreme, if you offer people a 40 year UBI and they don't quit, then that's pretty damn strong evidence. 3 years offers some evidence; for particular subpopulations with short time horizons, if they keep on working for three years on UBI, I'd bet almost arbitrary amounts of money they'll keep on working indefinitely. > No. If you make $1k from a job and $1k from a pilot program each month, you spend the $1k from the pilot on legitimate bills and now you have $1k to spend however you like. The study can't trace that money. (This isn't to say everyone on UBI uses it for drugs, rather, it's to point out that you cannot deduce they don't just by tracing the way the transfer payments are spent) I believe these studies rely on self-reported alcohol etc consumption. The issues with self-reported consumption are already well-known and well-characterized. > No kidding. You gave someone several thousand dollars no strings attached in a situation where neither taxes nor inflation would rise as a result. These things are always worth verifying. One of the criticisms against a UBI is that it'll create a population of depressed losers who never interact with society. If people's lives and happiness are improved, that addresses that criticism. > What UBI skeptical people want to know is where is the proof that we can afford to tax ourselves to pay ourselves, where is the proof that it won't hurt long term productivity, and where is the proof that it doesn't cause inflation. A 120 person 36 month trial program cannot answer any of these questions. Could anything short of a full UBI implementation work as proof for you? If not, can you suggest what would? If, say, you took a random selection of 1000 people and promised them a lifelong UBI, and their labor force participation and levels of happiness stayed the same over the first ten years of the program, would that serve as proof to you?

Alupis 6y ago
> if you offer people a 40 year UBI and they don't quit, then that's pretty damn strong evidence I think that isn't a correct assumption either. 40 yeas is a long time. Longer than many HN readers here have been alive. In the last 40 years, how many times has the government performed an about-face on some economic policy or whatever? Too many times for someone to just throw away their career until sufficient time has passed that is becomes part of society. That may take an entire generation (see Social Security in the US, which now is a permanent fixture).

jliptzin 6y ago

They should do a lottery system. Instead of giving $300 million to one person, give 1,000 people $1,000 / mo for life and see what happens.

nomel 6y ago

What about very slowly ramping it up? For example, over 20 years? If a problem begins to appear, it could be slowly ramped back down. I suppose this wouldn't work politically, since the first politician that tried to ramp down the income to save the economy would be swiftly booted to the curb.

rorykoehler 6y ago

As a big fan of UBI this infuriates me. We can't test it unless we do it nationwide. In business school they hammer into you that "cashflow is the lifeblood of the business". It stands to reason that the same goes for the economy so why are we messing about with pointless 120 person trials. That isn't testing the right aspect of the system. We need to test it's systemic impact not the impact it has on individuals.

rumanator 6y ago

> No, they prove that people who are in a program that is very clearly temporary will not end their careers for a short pilot program. This means nothing. This argument reads like a strawman, and is detached from reality. The argument about the risk of people quitting their job because of basic income is based on the idea that those who are forced to work shitty jobs to have a source of income (i.e., wage slavery) won't have to subject themselves to it if they already have a source of income. More importantly, people who live in wage slavery don't have careers, they have a job. They are bound to an activity or even an employer who ensures they have a paycheck as long as they do their job. I mean, do you honestly believe that a minimum wage job doing non-specialized tasks that anyone anywhere can do and can replace you in a moment's notice counts as a career? Of course it isn't. It's just something you do to pay the bills. Do you honestly believe no one would quit that as soon as they have a way to pay the bills? > No. If you make $1k from a job and $1k from a pilot program each month, you spend the $1k from the pilot on legitimate bills and now you have $1k to spend however you like. Your take on the program is very disingenuous, specially in the way you try to frame the old job as being the provider of all the brand new goodies and luxuries and fancy spending while the new source of income adds nothing more beyond taking care of the expenses that were already taken care of. Suffice to say, I'd participants were stuck with their old income, they wouldn't be able to afford anything, would they? Basic income supplies an income baseline. That means people cease to be tied to a repulsive job just to make ends meet. How they generate disposable income is up to them. With basic income you're free to pick high-reward but low-paying jobs, or even no job at all if you are willing to live a frugal life. That's the kind of change that will be studied in these programs.

ace_of_spades 6y ago

Who said that any empirical study could prove anything? Except in mathematics you simply cannot prove anything. There is no way to guarantee that with UBI the things you mention won‘t happen. In the same vein, there is no way to guarantee that those things won‘t happen WITHOUT UBI. The mindset of holding things constant is pretty short sighted in a world where things are radically changing. We have to reinvent and adjust our societies as we go along and learn from our collective experiences. Trials like this help us collect data about the consequences of complex interventions and seem to be a useful way to test the waters.