4 ms·

Yeah, it turns out that things like free health care, adequate food, good schools, and all that other socialist mumbo jumbo is actually good for productivity an

by roughly 11mo ago

Yeah, it turns out that things like free health care, adequate food, good schools, and all that other socialist mumbo jumbo is actually good for productivity and the economy, too.

macintux 11mo ago
I wonder how many people would start businesses if we had UBI and free health care as a safety net.
- Aurornis 11mo ago
  Several of the UBI pilot studies included new venture creation (including solo self-employment, not just classic business creation) as part of their measurements. The last few I looked at had zero difference in new business creation between recipients and control group. A lot of the UBI trials have actually had disappointing results. The arguments usually claim that it’s not a valid test because it wasn’t guaranteed for life, or the goalposts move to claim that UBI shouldn’t be about anything other than improving safety nets. Unfortunately I think the UBI that many people imagine is a lot higher than any UBI that would be mathematically feasible. Any UBI system that provided even poverty level wages would require significant tax increases to pay for it, far beyond what you could collect from the stereotypical “just tax billionaires” ideal. Try multiplying the population of the US by poverty level annual income and you’ll see that the sum total is a huge number. In practice, anyone starting a business would probably end up paying more in taxes under a UBI scheme than they’d collect from the UBI payments.
  - JoshTriplett 11mo ago
    > Any UBI system that provided even poverty level wages would require significant tax increases to pay for it Or cutting other things to pay for it, in addition to smaller tax increases. And the costs go down once it's bootstrapped long enough to obtain the long-term economic benefits that grow the economy (which will take a while to materialize). Honestly, my biggest concern with it is that people will (rightfully) worry that it won't last more than 4-8 years because the subsequent administration will attack it with everything they have, and thus treat it as temporary.
    - parineum 11mo ago
      > And the costs go down once it's bootstrapped long enough to obtain the long-term economic benefits that grow the economy (which will take a while to materialize). This is hypothetical, isn't it?
      - vidarh 11mo ago
        Depends what you mean. We have a decent idea of the velocity of money of households at different income levels on the basis of how likely people are to spend all their money vs. holding on to them in ways that may or may not be as effective at stimulating economic activity. In that sense it is not particularly hypothetical. In terms of whether people will be more likely to e.g. start a business, that part is a lot more hypothetical. There have been some trials where there seems to have been some effect, but others where it's not clear. That effect seems very much hypothetical. But that was not part of the classical argument for UBI, and I don't think it's a good idea to use it as an argument for UBI.
    - caseysoftware 11mo ago
      > And the costs go down once it's bootstrapped long enough to obtain the long-term economic benefits that grow the economy (which will take a while to materialize). That's a major claim. Which places under UBI (or in one of the experiments) has that manifested?
  - vidarh 11mo ago
    The "classical" UBI argument from a liberal point of view (classical liberal, not US liberal) has typically been that UBI would lower the complexity and by extension cost of welfare by removing the needs to means-test. In Europe, UBI was typically more likely to be pushed by (by our standards) centre-right parties. For this reason, UBI traditionally was seen negatively by the left, who saw it as a means of removing necessary extra support and reduce redistribution. Heck, Marx even ridiculed the lack of fairness of equal distribution far before UBI was a relevant concept, in Critique of the Gotha Program, when what became the German SPD argued for equal distribution (not in the form of UBI), seemingly without thinking through the consequences of their wording, and specifically argued that "To avoid all these defects, right, instead of being equal, would have to be unequal". Parts of the mainstream left today has started embracing it, seemingly having forgotten why they used to oppose it.
    - int_19h 11mo ago
      FWIW I'm far left and in favor of UBI, but one thing to keep in mind is that while it's a simple concept, details (i.e. amounts paid and amounts taxed) matter a lot. There's no reason why UBI can't be redistributive if one desires it to be so - you just use more progressive taxes to fund it. And, of course, reducing the complexity and cost of welfare ought to be a left wing talking point as well! Again, it depends on what you do with the savings - sure, it can just be taken and used elsewhere, or you could maintain the spending but raise the bar on how much UBI provides.
  - int_19h 11mo ago
    I actually did the math for US once, calculating how much more tax it would take to give everyone minimum wage. The resulting tax rate would certainly be fairly high, but not excessively so; several European countries have higher brackets today, and their economy doesn't collapse. But also, are you accounting for all the means-tested welfare that such a program would replace?
    - Aurornis 11mo ago
      > But also, are you accounting for all the means-tested welfare that such a program would replace? Multiply the US population by the poverty level annual income ($15.6K) and the resulting number is higher than all US federal tax revenue combined. In other words, tax rates would have to more than double across the board. Subtracting out existing social programs barely moves the needle. Are you sure you did the math, or were you just assuming?
      - int_19h 11mo ago
        Yes, I did the math. Wish I still had the spreadsheet. It's not as simple as multiplying the population. The point is that if everyone gets that check, then you can raise the nominal tax rate much higher but still get the effective tax rate (i.e. income - tax + UBI) in reasonable territory. As I recall I actually went all in and also made it a flat income tax to see how much the UBI offset would work at making it effectively progressive, and that also works out.
- airstrike 11mo ago
  UBI is both a pipe dream and unnecessary.
- zeroonetwothree 11mo ago
  I think it’s more likely that UBI discourages business creation than encourages it. Though the studies seem to show roughly zero net effect so perhaps these cancel out.
- meagher 11mo ago
  This was a worry for me when leaving my full time job in 2022 to work on open source. Our OSS project was able to pay rent, but was concerned about healthcare costs for my partner and me (NY state has extended COBRA coverage, but it's extremely expensive). My co-founder lives in Australia, which has free basic health care, so he was up for leaving his job before I was. Taking the risk was one of the best decisions I've made, but if I had a chronic health condition/higher healthcare costs, probably would not have been comfortable.
- deleted 11mo ago
  [deleted]
- parineum 11mo ago
  It takes a good idea and a willingness to take a risk to start a business. I don't think that risk aversion is what's stopping new businesses, there are a lot of people who do a lot of what I consider too risky. Instead, what I wonder is how many new businesses wouldn't be viable under a tax structure that provides ubi and health care. Not to be dismissive but that's definitely a concern in a world replete with fledgling businesses that mostly fail.
  - runako 11mo ago
    The data on UBI isn't out there, but it is notable that countries with similar tax rates to the US manage to have universal healthcare and more expansive safety nets. Some examples: New Zealand (tax rate ~30% less than the US), Korea, Switzerland, Australia, UK, Japan, Netherlands, Norway. Americans really should be asking why we're paying a significantly higher tax burden than New Zealand and not getting similar services as part of the bargain. Put another way: the US is incredibly rich compared to other countries. Our poorest states have higher GDP per capita than most rich countries. And our taxes are not particularly low. Our social issues are 100% about how we choose to allocate our shared resources. The good thing is we can always choose to make different choices.
    - bluecalm 11mo ago
      Switzerland has mandatory healthcare insurance and subsidies for low income earners. The insurance is provided by private companies. It's not really universal healthcare system like in most EU countries. Private insurance can work out fine if regulated well. In USA you have regulatory capture that makes services expensive. Impossible barriers to entry coupled with terrible regulation on price transparency and a lot of cartel like behavior.
      - runako 11mo ago
        I included the Swiss example exactly for this reason, to show that it's not 100% about the delivery model.
    - Aloisius 11mo ago
- tenpies 11mo ago
  n = 1, but if we get UBI, I will immediately start a precious metals brokerage business.
- vidarh 11mo ago
  I grew up in Norway, that while it doesn't have UBI does have a safety net that meant the notion of ever living in poverty was just entirely foreign to me growing up, and for me at least I think that made it easier to take the decision to leave university and start a company. The risk of ending unemployed was just never scary.
bequanna 11mo ago
Totally agree. However, this only works in a high trust society, which we no longer have.
- balamatom 11mo ago
  While in a low trust society, which you obviously already have, people are most productive when they're at perpetual risk of starvation.
  - linksnapzz 11mo ago
    "productive"
    - balamatom 11mo ago
      Simplest way to increase total absolute output is always to stop providing intake. Obviously, this fails almost immediately; operative word "almost". Definition of "almost": longer than a moment. Definition of moment: As it happens, high-trust societies have just spent the better part of a century teaching their constituents to "live in the present", atop half a millenium of teaching them that time is a thing linear, discrete, and properly scaled for decision making. Ergo: if the time between doing something stupid and realizing you did something stupid is longer than your attention span, you're a perpetual motion device.
  - bequanna 11mo ago
    No, you simply are unable to reap the benefits that are available to high trust societies.
    - balamatom 11mo ago
      Reap 'em? I'm unable to even conceive of them!
- Retric 11mo ago
  Trust is irrelevant, families gain the after tax income of working mothers but society gains not just the pretax value but the actual value of work generated. Thus subsidizing childcare and moving the needle to align society’s benefits and family benefits is a net gain without the issue of trust being involved. The same is true of quality public education etc, however creating US vs THEM narratives are politically powerful even if they don’t actually reflect reality.
andy99 11mo ago
Have you seen comparisons between American and Canadian productivity? It’s definitely more complicated than just socialist leaning government programs make the country more productive.
- WalterBright 11mo ago
  The Canadian economy is not doing very well.
johndevor 11mo ago
And yet every single socialist, European country is behind the US in terms of their economic output.
- rs186 11mo ago
  So tired of the argument. Not everything is measured in "economic output", not to mention that metric itself doesn't make any sense when comparing countries of vastly different size, population etc.
  - Demiurge 11mo ago
    Yeah, it’s like forgetting that the point of money in life is living, rather than the money itself.
    - dmix 11mo ago
      Life is not about checking off boxes on how much free stuff you can hypothetically get from the government either. That has tons of costs and risks just like everything else in life. It’s all relative.
- lordnacho 11mo ago
  https://ourworldindata.org/grapher/labor-productivity-per-hour-pennworldtable https://ourworldindata.org/grapher/labor-productivity-per-ho...
RestlessMind 11mo ago
Reality doesn't match your claim, for example when one looks at European countries who have all of that.
WalterBright 11mo ago
Obamacare is threatening to capsize the country with its cost.
dmix 11mo ago
America is #3 in the world in per capita public education spending (Luxumberg being #1). Which is the education system I always see Europeans maligned as producing “dumb Americans”. US also ranks #1 in public healthcare funding both as per capita and as percentage of GDP. https://en.wikipedia.org/wiki/Health_spending_as_percent_of_gross_domestic_product_(GDP)_by_country?wprov=sfti1#Table_1 https://en.wikipedia.org/wiki/Health_spending_as_percent_of_...
jazzyjackson 11mo ago
Why is "the economy" our highest priority here?
- roughly 11mo ago
  It’s not, but we seem to have to keep convincing business people that they’re part of society, so it helps to be able to appeal to their pocketbooks, too.
- Aloisius 11mo ago
  Why is the production, distribution, trade and consumption of goods and services (aka, the economy) the highest priority? Well, mostly because it's required to keep the vast majority of people in society alive and the effects of disruption are only second to war in terms of potential for misery.

by roughly 11mo ago

Yeah, it turns out that things like free health care, adequate food, good schools, and all that other socialist mumbo jumbo is actually good for productivity and the economy, too.

macintux 11mo ago

I wonder how many people would start businesses if we had UBI and free health care as a safety net.

Aurornis 11mo ago
Several of the UBI pilot studies included new venture creation (including solo self-employment, not just classic business creation) as part of their measurements. The last few I looked at had zero difference in new business creation between recipients and control group. A lot of the UBI trials have actually had disappointing results. The arguments usually claim that it’s not a valid test because it wasn’t guaranteed for life, or the goalposts move to claim that UBI shouldn’t be about anything other than improving safety nets. Unfortunately I think the UBI that many people imagine is a lot higher than any UBI that would be mathematically feasible. Any UBI system that provided even poverty level wages would require significant tax increases to pay for it, far beyond what you could collect from the stereotypical “just tax billionaires” ideal. Try multiplying the population of the US by poverty level annual income and you’ll see that the sum total is a huge number. In practice, anyone starting a business would probably end up paying more in taxes under a UBI scheme than they’d collect from the UBI payments.
- JoshTriplett 11mo ago
  > Any UBI system that provided even poverty level wages would require significant tax increases to pay for it Or cutting other things to pay for it, in addition to smaller tax increases. And the costs go down once it's bootstrapped long enough to obtain the long-term economic benefits that grow the economy (which will take a while to materialize). Honestly, my biggest concern with it is that people will (rightfully) worry that it won't last more than 4-8 years because the subsequent administration will attack it with everything they have, and thus treat it as temporary.
  - parineum 11mo ago
    > And the costs go down once it's bootstrapped long enough to obtain the long-term economic benefits that grow the economy (which will take a while to materialize). This is hypothetical, isn't it?
    - vidarh 11mo ago
      Depends what you mean. We have a decent idea of the velocity of money of households at different income levels on the basis of how likely people are to spend all their money vs. holding on to them in ways that may or may not be as effective at stimulating economic activity. In that sense it is not particularly hypothetical. In terms of whether people will be more likely to e.g. start a business, that part is a lot more hypothetical. There have been some trials where there seems to have been some effect, but others where it's not clear. That effect seems very much hypothetical. But that was not part of the classical argument for UBI, and I don't think it's a good idea to use it as an argument for UBI.
  - caseysoftware 11mo ago
    > And the costs go down once it's bootstrapped long enough to obtain the long-term economic benefits that grow the economy (which will take a while to materialize). That's a major claim. Which places under UBI (or in one of the experiments) has that manifested?
- vidarh 11mo ago
  The "classical" UBI argument from a liberal point of view (classical liberal, not US liberal) has typically been that UBI would lower the complexity and by extension cost of welfare by removing the needs to means-test. In Europe, UBI was typically more likely to be pushed by (by our standards) centre-right parties. For this reason, UBI traditionally was seen negatively by the left, who saw it as a means of removing necessary extra support and reduce redistribution. Heck, Marx even ridiculed the lack of fairness of equal distribution far before UBI was a relevant concept, in Critique of the Gotha Program, when what became the German SPD argued for equal distribution (not in the form of UBI), seemingly without thinking through the consequences of their wording, and specifically argued that "To avoid all these defects, right, instead of being equal, would have to be unequal". Parts of the mainstream left today has started embracing it, seemingly having forgotten why they used to oppose it.
  - int_19h 11mo ago
    FWIW I'm far left and in favor of UBI, but one thing to keep in mind is that while it's a simple concept, details (i.e. amounts paid and amounts taxed) matter a lot. There's no reason why UBI can't be redistributive if one desires it to be so - you just use more progressive taxes to fund it. And, of course, reducing the complexity and cost of welfare ought to be a left wing talking point as well! Again, it depends on what you do with the savings - sure, it can just be taken and used elsewhere, or you could maintain the spending but raise the bar on how much UBI provides.
- int_19h 11mo ago
  I actually did the math for US once, calculating how much more tax it would take to give everyone minimum wage. The resulting tax rate would certainly be fairly high, but not excessively so; several European countries have higher brackets today, and their economy doesn't collapse. But also, are you accounting for all the means-tested welfare that such a program would replace?
  - Aurornis 11mo ago
    > But also, are you accounting for all the means-tested welfare that such a program would replace? Multiply the US population by the poverty level annual income ($15.6K) and the resulting number is higher than all US federal tax revenue combined. In other words, tax rates would have to more than double across the board. Subtracting out existing social programs barely moves the needle. Are you sure you did the math, or were you just assuming?
    - int_19h 11mo ago
      Yes, I did the math. Wish I still had the spreadsheet. It's not as simple as multiplying the population. The point is that if everyone gets that check, then you can raise the nominal tax rate much higher but still get the effective tax rate (i.e. income - tax + UBI) in reasonable territory. As I recall I actually went all in and also made it a flat income tax to see how much the UBI offset would work at making it effectively progressive, and that also works out.
airstrike 11mo ago
UBI is both a pipe dream and unnecessary.
zeroonetwothree 11mo ago
I think it’s more likely that UBI discourages business creation than encourages it. Though the studies seem to show roughly zero net effect so perhaps these cancel out.
meagher 11mo ago
This was a worry for me when leaving my full time job in 2022 to work on open source. Our OSS project was able to pay rent, but was concerned about healthcare costs for my partner and me (NY state has extended COBRA coverage, but it's extremely expensive). My co-founder lives in Australia, which has free basic health care, so he was up for leaving his job before I was. Taking the risk was one of the best decisions I've made, but if I had a chronic health condition/higher healthcare costs, probably would not have been comfortable.
deleted 11mo ago
[deleted]
parineum 11mo ago
It takes a good idea and a willingness to take a risk to start a business. I don't think that risk aversion is what's stopping new businesses, there are a lot of people who do a lot of what I consider too risky. Instead, what I wonder is how many new businesses wouldn't be viable under a tax structure that provides ubi and health care. Not to be dismissive but that's definitely a concern in a world replete with fledgling businesses that mostly fail.
- runako 11mo ago
  The data on UBI isn't out there, but it is notable that countries with similar tax rates to the US manage to have universal healthcare and more expansive safety nets. Some examples: New Zealand (tax rate ~30% less than the US), Korea, Switzerland, Australia, UK, Japan, Netherlands, Norway. Americans really should be asking why we're paying a significantly higher tax burden than New Zealand and not getting similar services as part of the bargain. Put another way: the US is incredibly rich compared to other countries. Our poorest states have higher GDP per capita than most rich countries. And our taxes are not particularly low. Our social issues are 100% about how we choose to allocate our shared resources. The good thing is we can always choose to make different choices.
  - bluecalm 11mo ago
    Switzerland has mandatory healthcare insurance and subsidies for low income earners. The insurance is provided by private companies. It's not really universal healthcare system like in most EU countries. Private insurance can work out fine if regulated well. In USA you have regulatory capture that makes services expensive. Impossible barriers to entry coupled with terrible regulation on price transparency and a lot of cartel like behavior.
    - runako 11mo ago
      I included the Swiss example exactly for this reason, to show that it's not 100% about the delivery model.
  - Aloisius 11mo ago
tenpies 11mo ago
n = 1, but if we get UBI, I will immediately start a precious metals brokerage business.
vidarh 11mo ago
I grew up in Norway, that while it doesn't have UBI does have a safety net that meant the notion of ever living in poverty was just entirely foreign to me growing up, and for me at least I think that made it easier to take the decision to leave university and start a company. The risk of ending unemployed was just never scary.

bequanna 11mo ago

Totally agree. However, this only works in a high trust society, which we no longer have.

balamatom 11mo ago
While in a low trust society, which you obviously already have, people are most productive when they're at perpetual risk of starvation.
- linksnapzz 11mo ago
  "productive"
  - balamatom 11mo ago
    Simplest way to increase total absolute output is always to stop providing intake. Obviously, this fails almost immediately; operative word "almost". Definition of "almost": longer than a moment. Definition of moment: As it happens, high-trust societies have just spent the better part of a century teaching their constituents to "live in the present", atop half a millenium of teaching them that time is a thing linear, discrete, and properly scaled for decision making. Ergo: if the time between doing something stupid and realizing you did something stupid is longer than your attention span, you're a perpetual motion device.
- bequanna 11mo ago
  No, you simply are unable to reap the benefits that are available to high trust societies.
  - balamatom 11mo ago
    Reap 'em? I'm unable to even conceive of them!
Retric 11mo ago
Trust is irrelevant, families gain the after tax income of working mothers but society gains not just the pretax value but the actual value of work generated. Thus subsidizing childcare and moving the needle to align society’s benefits and family benefits is a net gain without the issue of trust being involved. The same is true of quality public education etc, however creating US vs THEM narratives are politically powerful even if they don’t actually reflect reality.

andy99 11mo ago

Have you seen comparisons between American and Canadian productivity? It’s definitely more complicated than just socialist leaning government programs make the country more productive.

WalterBright 11mo ago
The Canadian economy is not doing very well.

johndevor 11mo ago

And yet every single socialist, European country is behind the US in terms of their economic output.

rs186 11mo ago
So tired of the argument. Not everything is measured in "economic output", not to mention that metric itself doesn't make any sense when comparing countries of vastly different size, population etc.
- Demiurge 11mo ago
  Yeah, it’s like forgetting that the point of money in life is living, rather than the money itself.
  - dmix 11mo ago
    Life is not about checking off boxes on how much free stuff you can hypothetically get from the government either. That has tons of costs and risks just like everything else in life. It’s all relative.
lordnacho 11mo ago
https://ourworldindata.org/grapher/labor-productivity-per-hour-pennworldtable https://ourworldindata.org/grapher/labor-productivity-per-ho...

RestlessMind 11mo ago

Reality doesn't match your claim, for example when one looks at European countries who have all of that.

WalterBright 11mo ago

Obamacare is threatening to capsize the country with its cost.

dmix 11mo ago

America is #3 in the world in per capita public education spending (Luxumberg being #1). Which is the education system I always see Europeans maligned as producing “dumb Americans”. US also ranks #1 in public healthcare funding both as per capita and as percentage of GDP. https://en.wikipedia.org/wiki/Health_spending_as_percent_of_gross_domestic_product_(GDP)_by_country?wprov=sfti1#Table_1 https://en.wikipedia.org/wiki/Health_spending_as_percent_of_...

jazzyjackson 11mo ago

Why is "the economy" our highest priority here?

roughly 11mo ago
It’s not, but we seem to have to keep convincing business people that they’re part of society, so it helps to be able to appeal to their pocketbooks, too.
Aloisius 11mo ago
Why is the production, distribution, trade and consumption of goods and services (aka, the economy) the highest priority? Well, mostly because it's required to keep the vast majority of people in society alive and the effects of disruption are only second to war in terms of potential for misery.