Maybe we shouldn't be presupposing that governments are better at resource allocation than their citizens. People will still work with UBI, but they are much better positioned to choose the kind of work they personally do best.
There are things that individuals, left to their own preferences and entrepreneurial habits, will never create.
Just less people willing to do the work.
Once you get people on the dole, they will continually ask for more while still doing nothing. And because we live in a democracy, they'll vote in whoever will give them more and more money for free.
How's that for a bombshell that will totally destroy our GDP, happiness, sense of self worth and ultimately our society?
The other big problem here is that when people do get money for free, the incentive is to vote more money for yourself. When most of the population is working, this isn't a problem, but once you get over 50% of the population who is expecting the government to pay their way, the country will just be a big free for all, everyone trying to grab as much as they can.
I could be wrong, but IMO the risk of it playing out this way and destroying the entire country is not insignificant.
Of course not. We live in a capitalistic society where people want to get ahead and make a better life for themselves. Raising the economic floor from $0 to $12k/yr (~poverty line) is juuust enough for people falling through the cracks to get back on their feet and become productive members of society again.
Will some tiny fraction of people be satisfied living in a shithole apartment, eating garbage and trolling on the internet all day? Sure. I'm willing to accept that negligible cost in exchange for the massive social benefits.
I think you do have a valid point regarding people voting for more money over time. I don't see this as big of a problem as you do but I acknowledge it's something that needs to be considered.
Are you trying to say I'm some sort of clown who unintentionally make people laugh when I speak my beliefs? Can you at least acknowledge that we may both be intelligent people who disagree? This sort of statement really shows your inability to consider opposing viewpoints in an objective way, IMO.
> Do you really think people will be satisfied making barely enough money to survive? Just enough to live at the poverty line?
> Of course not. We live in a capitalistic society where people want to get ahead and make a better life for themselves. Raising the economic floor from $0 to $12k/yr (~poverty line) is juuust enough for people falling through the cracks to get back on their feet and become productive members of society again.
> Will some tiny fraction of people be satisfied living in a shithole apartment, eating garbage and trolling on the internet all day? Sure. I'm willing to accept that negligible cost in exchange for the massive social benefits.
This is a straw man, since we've already seen that realistically, this is not how UBI would be implemented. The proposed "Heroes" act already had a (now removed) clause to give people $2000 per month, on top of all the other benefits they are already receiving, which goes to show that politicians who favor this aren't thinking in terms of the bare minimum to meet the poverty line, nor seem to care about how much it costs.
> I think you do have a valid point regarding people voting for more money over time. I don't see this as big of a problem as you do but I acknowledge it's something that needs to be considered.
What do think happens if you're wrong and doing this would cause a feedback loop of more and more benefits, spending, and money printing? You're going all in with the country at stake, with a vague hand wavy dismissal of the consequences.
Well, I'm a person, and you made me laugh, so, while I wouldn't actively employ that description, I wouldn't say that (apart from quite probably the “clown” part) it's wrong in any salient detail.
> Can you at least acknowledge that we may both be intelligent people who disagree?
Sure, but that's not mutually incompatible with the preceding option. Intelligent people can be wildly misguided on a topic, intelligence doesn't imply being informed, having spent the effort to think something through well (though it reduces the amount of effort required), or any of a number of other things that are needed to avoid that problem.
> The proposed "Heroes" act already had a (now removed)
“Now removed” is a hint that even as a temporary emergency measure, the form in that proposal is not the form it would likely be in were it to pass.
> clausee to give people $2000 per month, on top of all the other benefits they are already receiving
While it has some superficial similarity to a UBI, the HEROES act proposal was a temporary recurring stimulus payment, an ongoing money pump to get the economy going not a UBI. It was consciously, by design not sustainable beyond a limited emergency period with unusual economic conditions, and it's design reflected that. Just like the massive short-term trickle-down subsidies pumped into corporations and the banking sector, but this was bottom-up.
> What do think happens if you're wrong and doing this would cause a feedback loop of more and more benefits, spending, and money printing?
People concerned about that ought to support implementing it with the relatively trivial-to-implement negative feedback controls which prevent that.
> People concerned about that ought to support implementing it with the relatively trivial-to-implement negative feedback controls which prevent that.
I just don't see how that's trivial to implement at at all. What "negative feedback controls" are you referring to?
The simplest is just setting a fixed nominal benefit without any indexing, but this has the problem that active choice to increase benefits is expected, so the still fairly trivial, but less crude negative feedback method is to tie aggregate benefits to a revenue stream you expect to generally grow with the economy (to get a little bit beyond the trivial level, you can add some reserves and buffering for short-term fluctuations.)
Because of the natural effect of price levels on real benefit levels, a runaway scenario is really only possible with inflation indexing or something effectively similar.
You prefer to have nuclear physicists digging ditches like parent poster..?
There's plenty of people doing stuff at home, even on crazy projects. Zhang solved the twin prime conjecture while he worked at subway because he couldn't get an academic job[0]. I think many also know Grigori Perelman[1] turning down the Fields Medal. There's the nuclear boy scout. Michio Kaku built an accelerator as a teenager. How many SV startups came out of garages? It is so weird to hear the GP comment on a site where we glorify those that rose from shoestring budgets. In fact, what is more American than that kind of story? Maybe the dream died, but maybe it shouldn't have.
[0] https://gizmodo.com/a-former-subway-worker-made-a-breakthrou...
Michel started a prototype fusion reactor in a shed that turned into General Fusion. Einstein was of course a patent clerk. It all starts somewhere.
I’m however positive, in the case of essential infrastructure, enough people - engineers, technicians and the like will happily work together despite being provided UBI.
Same with health care and other essential professions.
They’ll do it no matter governmental or ”private” initiatives.
A lot of us would probably direct our effort more in unison to creating a better world once the basics are of no concern.
In the end all we need to do is to cooperate. It’s what we’ve evolved to do. UBI is kind of the final step here - realize it’s not a zero sum game.
Can you not see a lot of cooperatives and interesting governmental initiatives arising due to UBI? I certainly can.
When their reward is a real stake in the profits generated by the project.
It will mean that people won't be wage slaves if they don't want to, and can quit a shitty job or a shitty manager. It means that folks can miss work if the are sick. Or not go broke while getting education, both formal and informal. Folks might not work at a job they hate just to get food on the table and be slightly-over-broke. People can demand vacation time. But it'll still be worth it to go to work to have more money than UBI gives, even if some folks don't participate.
> they are much better positioned to choose the kind of work they personally do best.
...lead to any sort of large-scale work getting done? Bridges and roads aren't open-source software and don't build themselves merely through the individual disparate actions of large numbers of people. I.e., thousands of people individually deciding that they want to improve their city's infrastructure doesn't result it in being improved; you still need an overarching leadership structure to organize it.
Perhaps that's hard to understand to software people, but working on something can be and often is rewarding.
My point is that large infrastructure projects require top-down organization, unlike open-source software, for example, which can be constructed through the individual, separate actions of large numbers of people. Ergo the disparate actions of individual people will not add up to a bridge.
FLOSS still requires top-down organization, just like any engineering process. You may be used to work at projects where a single person can parachute into a code base and rewrite everything from scratch, but there are also contractors who can build an entire house single-handedly.
Once you add enough complexity to a project, you start to require hierarchies.
> for example, which can be constructed through the individual, separate actions of large numbers of people.
It's the exact same thing in civil engineering. You get contracts that are entirely independent of other tasks. The guy putting up utility poles on a bridge deck doesn't care if the drainage has been finished yet.
- Some things can be created in sum, by individual people acting according to their own individual desires.
- Other things can only be created with larger amounts of resources and organization. No amount of individual action will get them made.
To use a different example: the Manhattan Project would not have developed a nuclear bomb if it simply gave every physicist in the country a stipend to live and said "work on nuclear physics." Massive amounts of coordination and resources were necessary.
For starters, a basic income does not stop anyone from working in structured projects. I have no idea where you came up with that nonsense. You gave construction work as an example and I explained to you why your belief made no sense, and still you don't follow. Let's be perfectly clear: people do enjoy what they do for a living, and don't do it because they are paid to do it. Self-fulfillment is real.
Secondly, people do enjoy working in structured environments, specially if they are working on a lofty goal. Academia is largely an example of that. You talk about the Manhattan project? How many physicists do you believe were working on that project because they wanted to get rich or were compelled to pay the bills? Once you satisfy your basic needs, you focus on other aspects of your life. See Maslow's pyramid.
Thirdly, people do cooperate and collaborate for the greater good, regardless of income. See volunteer work.
And finally, please refrain from trying to belittle fellow readers, specially if you do that while demonstrating some slowness grasping simple concepts or ideas.
There's a sense that if we have UBI, it'll take a huge number of people out of the workforce, but I think the only real rationale for that is the notion that a number of people hate working enough that the moment they get "sufficient cost-of-living" income they'll quit and veg out. There's a counter-argument that a huge number of people would instead still work really hard, but would pursue different jobs (often jobs that pay terribly right now) if they didn't have to worry about financial security.
There's a huge swash of jobs I'm actually personally interested in, in the trades, that I can't rationally touch because it's a massive pay cut - which wouldn't be so bad, except that our society has no safety net, particularly for end-of-life care, so squirreling money away is the only way to get an approximation of one. It's really the unbounded end-of-life/healthcare costs that force me towards a soft income-maximization path. I don't have to be too crazy about it, but if one possible career path (programming) has a reliable guarantee of earning 3-4x another one (construction), I can't reasonably pass that up.
I think if UBI dropped in, we'd see a mass exodus from "bs jobs" that provide no value to society, but I think a large number of jobs which do something meaningful would retain a surprisingly high percentage of their employment. There would probably be some major wage adjustments, but they'd draw a surprising number of people from the "now that I don't 'have' to do anything, what do I 'want' to do?" crowd. Doctors, food-industry, construction, mechanics, etc, would all remain surprisingly hirable. Quite a few other things like sales and management would dry up really hard.
This has nothing to do with UBI. That's why you're having trouble understand the excellent points by rumanator. He's pointing out that you can have both UBI AND large infra projects. They are not mutually exclusive. I'm not sure where you got that idea from?
Well, it seems to me that those who don't just never had the opportunity or good fortune to hold a job they enjoy doing. Isn't that a problem worth fixing? I mean, I doubt that desiring a fulfilling life is a niche thing.
So unless this "fix" involves some kind of radical social engineering, it's just not going to be "fixable". You got lucky; you are the kind of person who find fulfillment in being paid to do your job. There are people who don't have that, and given the way our society and economy works, never will. Many of those people, myself included, are fine with that. It's OK. What many such people are less fine with is how much those other people like you want us to be like you.
UBI works no differently than unemployment benefits or pensions, with the notable exception that UBI is far simpler and straight-forward to implement.
If people are ok with the way the state supervises unemployment benefits or pensions, I see no reason why a simpler and more straight-forward program would pose a problem.
>Maybe we shouldn't be presupposing that governments are better at resource allocation than their citizens
A. allocate resources via new deal work programs B. allocate resources via UBI
The choice between 1930's work programs and UBI is a false dichotomy.
(C.) None of the above
The great depression was exacerbated by gov. spending and the new deal. Rarely mentioned is the crisis of 1920 which was resolved relatively quickly by cutting spending.
It becomes a tax on everyone else who is holding cash when we assume that the money supply will be inflated, which is the default scenario. Otherwise actual taxes will have to be levied to fund UBI.
If we accept that society has witnessed massive increases in productivity over the last hundred years, what happened to the 5 cent hamburgers? How does this price inflation help the impoverished?
When we create a monetary spigot and allocate resources via gov. intervention, those who specialize in currying favor with gov. will always benefit disproportionately. Ironically, proponents of further gov. intervention use this wealth inequality to rationalize further gov. allocation of resources.
Of course taxes would need to be levied to fund it, as with any other government expense. And setting the tax curve right is nontrivial. But a complex tax system and a simple disbursement system is still an improvement over a complex tax system and a complex disbursement system which is what we currently have. (Eliminating almost all tax deductions would also be a good programme to follow).
> If we accept that society has witnessed massive increases in productivity over the last hundred years, what happened to the 5 cent hamburgers? How does this price inflation help the impoverished?
So what you're saying is that in a non-UBI world, increases in productivity have not helped the poorest. How is that an argument against UBI?
> When we create a monetary spigot and allocate resources via gov. intervention, those who specialize in currying favor with gov. will always benefit disproportionately.
That's true in proportion to how complex the rules are. E.g. most TARP funding went to New York 1%ers, because those were the people who knew how to meet the TARP requirements. The whole point of UBI is to reverse that by having the simplest, most transparent rules possible for who gets what money.
What I am saying (sorry for not being explicit) is that increases in productivity have not helped the poorest because they have been robbed of said benefits by price inflation, which is a symptom of an inflation of the money supply.
>The whole point of UBI is to reverse that by having the simplest, most transparent rules possible for who gets what money
My expectation is that those who collect rent on low income housing will benefit more than those who pay the increased rent. At the end of the day low income people will have more money, but all of their expenses for basics like food and rent will increase.
>Of course taxes would need to be levied to fund it, as with any other government expense.
Recent history suggests that this is simply not the case. Budget deficits would be a more reasonable expectation. Either way, increased taxes will similarly create increased prices. Those with lesser incomes will suffer the most.
Price inflation doesn't change how much real value exists is in the world. The problem the working poor have isn't inflation (if anything, inflation costs the rich more than the poor, since the rich are more likely to have savings), it's that they're taking home an ever smaller proportion of the value they produce.
> My expectation is that those who collect rent on low income housing will benefit more than those who pay the increased rent. At the end of the day low income people will have more money, but all of their expenses for basics like food and rent will increase.
Cheap food is a competitive, low-margin business, so it's unlikely that the cost would increase. (If you're thinking about labour costs going up, higher-end goods are generally much more labour-intensive than cheap goods). Housing markets are their own total mess, but if there's a lot less need for people to live near their job then that should make housing a lot more competitive and if anything lower prices.
> Recent history suggests that this is simply not the case. Budget deficits would be a more reasonable expectation.
It's not like governments don't already run the highest deficits they can get away with. The mechanisms that limit them (credit ratings etc.) will be the same mechanisms we currently have; introducing UBI doesn't change that one way or another.
> Either way, increased taxes will similarly create increased prices. Those with lesser incomes will suffer the most.
It's absurd to think that doubling the proportion of extant dollars in the hands of the working poor (at the expense of people on the high end) would make those people worse off. Price adjustments might blunt some of the effect, but wealth redistribution must ultimately work; why would the rich be so afraid of it otherwise?
The truly wealthy have a lower proportion of their savings in cash. They preserve their wealth in assets like stock or property which pays dividends and increases in value along with price inflation.
>Cheap food is a competitive, low-margin business, so it's unlikely that the cost would increase
The Federal Reserve cannot print more supply for consumers. When they increase the supply of money to chase the same supply of assets, the outcome is price inflation. Food and rent is a disproportionately larger expense for low income individuals.
>The mechanisms that limit them (credit ratings etc.)
These mechanisms are not limiting them from monetizing debts. Additionally, credit ratings organizations are subject to retaliation by sufficiently powerful governments.
https://en.wikipedia.org/wiki/United_States_federal_governme...
>but wealth redistribution must ultimately work; why would the rich be so afraid of it otherwise?
I'm not sure it is fair to assume that 'the rich' want 'the poor' to be worse off. Producers create products which consumers want to consume, because they perceive it to benefit themselves. Finally, I'm not sure that the truly rich elites are opposed to UBI. Bloomberg has published the article and continues to push this narrative. If anything greater centralization favors elites. When asset prices increase those who have their savings in assets benefit the most. Again, the elites are not keeping their savings in cash.
I don't think that's really true. The middle class often have a negative proportion of their savings in dollar-denominated assets (their mortgage), and the poor usually have no relevant savings at all (compared to their expected future income).
> The Federal Reserve cannot print more supply for consumers. When they increase the supply of money to chase the same supply of assets, the outcome is price inflation. Food and rent is a disproportionately larger expense for low income individuals.
The food supply is far from fixed (and the government does have a number of levers with which to affect it). Food and rent are a disproportionately large expense for the poor because they are poor; if we redistribute wealth towards the poor we should expect it to become a proportionately smaller expense for them. Demand for food will only actually increase if people are currently not getting as much food as they want, and in that case we should want prices to increase so that more food supply comes online.
> These mechanisms are not limiting them from monetizing debts. Additionally, credit ratings organizations are subject to retaliation by sufficiently powerful governments.
Be that as it may, all of that is happening anyway. UBI doesn't change the deficit because the deficit will always be as high as politically possible.
This assumes that the prices for all of the inputs for food production remain static in the face of either increasing taxes or as we both seem to agree upon, an increased monetary base. Land and energy will go up in price as more money is available to chase the same scarce resources. Similarly taxes would increase production costs.
>UBI doesn't change the deficit because the deficit will always be as high as politically possible.
More spending won't increase deficits because they're going to spend anyways? I'm not sure I follow your logic here.
It is true that price inflation helps debtors. Those who have homes have their debts minimized while their asset increases in price. Lately it seems that we have been incentivizing this behavior, rewarding those who borrow and punishing those who save in cash. I'm not sure how this helps low income individuals. Especially those who are trying to build savings for their first home.
>Food and rent are a disproportionately large expense for the poor because they are poor; if we redistribute wealth towards the poor we should expect it to become a proportionately smaller expense for them
And they will still be poor relative to everyone else. What is needed is not a money printer to merely print more paper and distribute it into the economy, but a similarly effortless method to print supply into the economy like a Star-Trek replicator.
https://en.wikipedia.org/wiki/Replicator_(Star_Trek)
Worse yet, in the case of COVID-19 production has actually decreased.
You're conflating different kinds of thing here. I don't believe there would be any increased monetary base, because I expect UBI would be implemented in a budget-neutral way (covered by tax). But if you do think there would be monetary inflation, just ignore the cash numbers and denominate everything in 2020 (fixed-value) dollars. There are no more fixed-value dollars chasing resources (just the same number of fixed-value dollars distributed differently), so there's no increased demand at first order. At second order maybe those same fixed-value dollars circulate more quickly, so there's more demand and more consumption, a more active economy generally and higher GDP (in fixed-value dollars). That would generally be seen as a good thing.
> More spending won't increase deficits because they're going to spend anyways? I'm not sure I follow your logic here.
The political reality of passing UBI would be finding some way to balance (or retain the same unbalance in) the budget, either by cutting other expenditures or raising additional revenue.
> And they will still be poor relative to everyone else.
They will be less poor relatively, that's the whole point. If A has 100 dollars and B has 10 dollars, and you give 10 dollars to B, it's almost irrelevant whether those are dollars you taxed from A or printed afresh; either way you leave B proportionately much better off.
Yet somehow, the deficits keep increasing year by year. Even so, increased taxes on producers would result in increased prices for consumers. There's no free lunch.
>If A has 100 dollars and B has 10 dollars, and you give 10 dollars to B...
When B, who has a history of mismanaging his finances continues to do so, A will end up with this money. Even UBI proponents make the case that this is 'trickle up' economics. Additionally B may be buying things like gasoline with this money whereas A would have just parked it on the stock market, which wouldn't have the same impact on consumer prices.
The deficits follow a pretty steady trajectory regardless of which policies pass in any given year; a year in which UBI passed would be no exception.
> Even so, increased taxes on producers would result in increased prices for consumers. There's no free lunch.
Redistributive taxation is possible. The shape of the income tax curve doesn't affect production or prices (at least at first order): what changes is whose pockets the production goes into.
> Additionally B may be buying things like gasoline with this money whereas A would have just parked it on the stock market, which wouldn't have the same impact on consumer prices.
Parking it on the stock market has the same kind of impact, just on the cost of investment returns rather than on the cost of gasoline. (Hence why investment returns are so low). Buying future goods and services (by investing) isn't fundamentally different from buying other kinds of stuff.
Let's look at how consumption affects prices. There are two scenarios:
a) B wants gasoline to do something useful with. In which case, the value produced by using that gasoline is (generally) higher than the cost of the gasoline, gas prices go up because the economy as a whole goes up, more gas is produced because the higher prices justify more difficult kinds of oil drilling and so on. This is a positive case for everyone, even if higher gas prices might sound bad in isolation.
b) B wants gasoline to play around with; prices go up but the rest of the economy doesn't. This is the negative case.
Basic necessities like food and housing are, almost by definition, things that people buy for productive purposes rather than for unproductive consumption. Food prices don't go up if we redistribute food consumption; food prices only go up if overall food consumption increases. But food consumption is only going to increase if there are people who want more food but are holding back because they can't afford it - and in that case we should definitely want those people to be able to buy more food, even if that means increased food prices (and food prices should go up, to stimulate more food production, because clearly we weren't producing enough food to start with).
We can imagine a shift between different kinds of productive use. For example, maybe in a UBI world there is less demand for luxury cars and more demand for basic cars. But in that case prices should only shift a little: the car market is efficient and competitive (i.e. cars are a commodity), luxury carmakers can retool towards producing more basic cars.
Equally, we can imagine a shift between different kinds of unproductive consumption. Maybe fewer people want to watch opera and more people want to watch pop concerts. But again those are more or less commodity industries; as long as the cost is stable-ish, changing demand is going to mean slightly higher/lower prices and production will change to match, but the nature of a commodity business is that every company in every one is making more or less the same (low) level of profit.
What really matters is when and how the use of real value shifts between productive use and unproductive consumption. I'd expect that the rich use a much greater proportion of their income unproductively (looking at the big picture: e.g. maybe they put it in an investment that becomes their child's trust fund, but is ultimately spent on partying) than the poor. Certainly it's hard to imagine that rich people are often being held back from doing things that would be more productive for the overall economy because they can't afford to, whereas it's easy to think of cases where that happens for poor people: can't afford to take a better job because they can't afford to move, losing their job because they can't afford gas, performing poorly at work because they couldn't afford to eat enough, etc. Investment is currently a pretty unproductive use of value (as seen by how low investment returns are), because the economy already has more than enough investment in to pursue all the actually productive projects it can think of. And surely rich people spend more on consumption in the most direct common-sense form - decorations, entertainment and the like - but hit diminishing returns; wouldn't poor people get much more (aggregate) joy out of the same (overall) expenditure?
I guess if you think rich people are living frugally and putting all of their money into productive investments, then you could think that poor people spend a greater proportion of their income on wasteful consumption. But I find it very hard to imagine that that would be true in terms of the overall averages.