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> The whole point of UBI is that it's universal and everyone is a beneficiary. If I get a check for $1,000 every month and I lose $5,000 on taxes every month,

• lmm 5y ago
  > This is a wealth redistribution scheme. At first order it is, but at first order virtually any policy involves moving wealth around, and at first order any such thing is zero-sum. > from people who are self-evidently efficient capital allocators to people who are self-evidently not. Given that the biggest factor affecting income is parental class, that seems far from self-evident. More importantly, if we want to encourage the kind of higher risk tolerance that increases overall productivity on average, taking a chunk of upside to eliminate the downside makes sense. Putting $1m into a 50-50 chance that will produce $10m of value if it works out but leave you destitute if it doesn't is a positive for society, but irrational at an individual level; a tax system that leaves you with $5m if it works out and $50k if it doesn't aligns the incentives better. We already see that people who are lucky enough to have that kind of safety net by coincidence (e.g. rich families/friends) tend to be more entrepreneurial and willing to take the risks that do pay off than people who don't. > Please, I'd love to hear how "organized society" is synonymous with "welfare programs". I mean you can go right back to the Roman Empire and "bread and circuses". Organised society has always meant some level of support for those on the bottom.
  • wyager 5y ago
    > Given that the biggest factor affecting income is parental class This isn't actually true; it's one possible explanation that seems OK under cursory examination of the evidence, and it's compatible with American university social "science" dogma, but it falls apart under careful inspection. The overwhelmingly more likely (but incompatible with field political dogma) explanation is that income is most strongly mediated by intelligence, which is mostly genetically heritable. This is why people tend to have similar incomes to their parents. (This persists through adoption; try to explain that as a socially mediated effect.) Now, that said, this has nothing to do with the fact that people who would most benefit from welfare schemes are the least likely to be efficient capital allocators. We can make the observation that they are not allocating efficiently independently from asking why they are not allocating efficiently. > Putting $1m into a 50-50 chance that will produce $10m of value if it works out but leave you destitute if it doesn't is a positive for society, but irrational at an individual level The market already efficiently addresses situations like this which actually exist, using schemes like business loans and outside investment. There is no way in hell some financial knob the government can blindly turn would do as good a job at performing this function as banks and investors who are actually making a conscious decision and putting their own money on the line. In other words, for every marginal good bet this scheme enables, it's going to enable 1000 marginal stupid bets. > (e.g. rich families/friends) tend to be more entrepreneurial You've made the same (understandable) inversion of causality as before. In reality, the latter tends to drive the former. Obviously the causality is bidirectional to some degree, but I think people tend to vastly underweight the primary direction. I agree that society could do a better job enabling outsized performers without means to get access to capital, but we already do a pretty good job and there is no way that some simple welfare system would do a better job than the intentional systems we have now. > Organised society has always meant some level of support for those on the bottom. This may or may not be true (I'm not much of a historian), but I do know that "some level of support" doesn't mean "far-reaching government welfare infrastructure". It can mean churches, waqfs, and so on.
    • mlyle 5y ago
      > The overwhelmingly more likely (but incompatible with field political dogma) explanation is that income is most strongly mediated by intelligence, which is mostly genetically heritable. This is why people tend to have similar incomes to their parents. This can't explain the whole effect, because: - The effect of parental income on later income remains even after controlling with standardized test scores. - Further, parental income seems to increase child IQ a little bit, even after controlling for parental IQ scores.
    • lmm 5y ago
      > This persists through adoption; try to explain that as a socially mediated effect. (Formal, registered) adoption is virtually impossible for lower-class people, so studies have very little coverage of that. > Now, that said, this has nothing to do with the fact that people who would most benefit from welfare schemes are the least likely to be efficient capital allocators. We can make the observation that they are not allocating efficiently independently from asking why they are not allocating efficiently. But we can't even begin to talk about capital allocation if we're only looking at the output side and not the input side. The people who would benefit most from UBI would be mostly those who have seen little benefit from capital yes, but the overwhelming majority of those are people who never had much capital to allocate in the first place. > The market already efficiently addresses situations like this which actually exist, using schemes like business loans and outside investment. Access to those things is extremely class-gated. > You've made the same (understandable) inversion of causality as before. In reality, the latter tends to drive the former. Obviously the causality is bidirectional to some degree, but I think people tend to vastly underweight the primary direction. There are probably real effects in both directions, but there is certainly a significant difference from having a safety net. E.g. see the bump in people starting businesses once they hit the medicaid eligibility age threshold. > There is no way in hell some financial knob the government can blindly turn would do as good a job at performing this function as banks and investors who are actually making a conscious decision and putting their own money on the line. > I agree that society could do a better job enabling outsized performers without means to get access to capital, but we already do a pretty good job and there is no way that some simple welfare system would do a better job than the intentional systems we have now. Maybe. Simplicity, transparency, and reliability can be a real gamechanger. At one point in the pandemic the government was trying to literally give away money to certain categories of small businesses but found it difficult, because the businesses that most needed the support were also those that were least efficient at navigating bureaucracies and processes. For an older example, Ramanujan won a scholarship to an elite school that was intended precisely to support cases like his (intelligent people from poor backgrounds), but lost it because, despite his mathematical brilliance, his grades in other subjects weren't high enough to meet the requirements. > This may or may not be true (I'm not much of a historian), but I do know that "some level of support" doesn't mean "far-reaching government welfare infrastructure". It can mean churches, waqfs, and so on. Sure. But that style of non-guaranteed social support increases the pressure on poor people to live in a conventional, legible fashion, avoid downside risks, and conform. We gain little and lose much from encouraging the poor to be (literally and metaphorically) sober and miserable because it would be not costly but merely unseemly to enjoy themselves (especially - though far from only - when that enjoyable thing is potentially productive, but in a way that's not necessarily understandable to those in charge of that welfare infrastructure).