Universal Basic Income is Capitalism 2.0

However, this is also why I believe that there is nothing that could still save the USA. For starters, the changes it would need to prevent it from cannibalizing itself (as most crumbling empires), would require dismantling existing power structures and interests that will not hesitate to destroy everything (civil peace, country, world, everything) to "defend" themselves. Those powers are almost nowhere as powerful as the are in the USA, and I am everything but positive about reining those in. As long as those run the show, good luck with anything else.

1. Does the current system encourage work? When you require means testing for benefits and have sharp discontinuities, the incentive to work isn't very strong.

If a full time job pays $x/month and your benefits are $0.8x/month, then taking that full time job and losing the benefits only puts $0.2x in your pocket. That seems like a pretty poor deal for 40+ hours a week away from home. A UBI system which always paid the same amount would mean that any income from work would immediately go in your pocket. That's a very strong incentive to work - working would double or triple your income.

2. The type of work that people _must_ do for society to function is actually quite small. People must grow crops, run the water treatment systems, maintain roads, generate electricity, sure. But there's also a huge class of pointless jobs - pointless admin due to wasteful bureaucracy, entire divisions of defence contractors working on things which will never be used, a huge number of startups spending VC money on things which they have no hope of succeeding at, wasteful processes and systems at state telecom companies the world over.

The only thing we can say about work in our economy is that it is done because someone wants to pay for it to be done. Not that it's necessary. Things become profitable because incentives exist to do them, but often these incentives are artificial or completely crazy.

If UBI significantly alters the economic incentives, maybe that's not a bad thing. Does it really make a difference to society if someone spends their days pushing paper in a state telecom company, or creating art?

There will of course be scroungers and lazy people. There's a lot of people who work right now who do the bare minimum as it is. They might drop out completely. There will also be people who are given a stable safety net from which to pursue a new career, return to education, care for their parents, build a house in the woods, build a business.

I don't think we can say for sure which group will be larger.

We don't have UBI right now, but we do have people who inherit money. And in my experience with people I've known who've inherited enough money to live for a few years, they've almost entirely continued working. The inheritance has given them a safety net from which to pursue a risky career or retrain. It's been a huge positive for them. In inheritance we already have an entrenched intergenerational BI for a group of society - UBI in many ways is recreating that for everyone.

This gets less true every year. The only reason we can't have robots handling almost everything and people living lives of pure leisure (except for, say, mandatory menial tasks one day a year), is because we haven't yet figured out a way to do it fairly. And maybe the technology isn't there yet, but it will be soon.

The problem is that the people who own the robots don't see why they should give away the fruits of their R&D investment to everyone else for free. And they have a point! If you're saying "spend loads of time and money developing robots for us, and then we'll take them off you and you'll be no better off than anyone else", why would they bother developing them?

But in the long term, we need to move towards a world where automation serves humanity as a whole, instead of whichever particular corporation happens to own that particular piece of automation. I just don't know how to do it.

One of the answers to the welfare means testing trap I've seen is to extend the EITC much, much more. It turns out according to the Andy Sterns think tank that researched it that the cost of such a program would be about $1T off from what UBI would be. Furthermore, such a program would be under incredible attack from the GOP that it'd turn into the sad state of welfare today such as in MS where basically nobody receives benefits while the state collects money for it. The attempts to defeat welfare will never end and given the clown car of different issues that are constantly being eroded perhaps another solution is worth a try to divert the attention of attackers (and also slide other important protections in place as well).

I've never seen any UBI advocate think that nobody has to work and it's a pretty inflammatory and bad faith argument that UBI advocates believe such nonsense.

The reason for using a consumption tax to fuel UBI is that if the workforce drops significantly, this doesn't mean consumption drops, and if much of the revenue produced is from automation or a non-human labor produced value taxing it doesn't seem unfair because no person earned said income directly. What we're seeing in trials repeatedly across even developed countries and concentrated among existing assistance recipients is that UBI recipients don't drop out of the workforce though except for new moms and students, both groups which probably shouldn't be plowing fields and in construction because their contributions to society also are required for it to continue. This idea that people en masse would stop working with UBI is simply not true - do rich people stop working because they have passive income? Not at all

it's for all intents and purposes a religious belief. your word choice of 'fundamental' hints at it. it also disqualifies people with crippling disabilities from... what exactly? right to live? i hope not!

people must eat, drink and sleep. that is fundamental (actually a hard biological requirement). it doesn't follow that work equals food, water and shelter, though it was true for most of humanity's existence up until the invention of civilization.

At some point you have people near the cusp of getting free health insurance and health care. Imagine you are also getting $300 in food for your family monthly.

Now imagine you at some point get the opportunity get a raise and make another $400 per month. You earn a whopping $4800 more unfortunately you lose the food assistance worth $3600 and you end up paying $300 every 2 weeks for health insurance for a 7800 loss then you have to actually pay for your prescriptions and this amounts to another 200 a month or ultimately another $2400.

I have not even touched on subsidized housing which is yet another factor for some.

In the above example taking a $4800 raise would cost you $13800 leaving you 9000 in the hole for a family that can't afford to lose much and still remain solvent.

What you want is for those people to take every opportunity available to progress the incentive you have created is for them to stay a part timer and work the exact number of hours that keeps them on benefits and look for no path upward because every path upwards leads through a space where they are apt to lose their ass and possibly their home.

You have also created an incentive for them to vote more of your money into their pockets in terms of benefits. With half the nation sharing 12% of the income if you let the have not class grow large enough eventually they will coalesce around voting your money into their wallets.

How about getting rid of all taxes and just taxing transactions--like VAT, but more, so anytime money changes hands? 2019 was $21T, if you put a transaction tax of 30% in place, you would cover the cost of UBI.

I am normally against flat taxes because they hurt poor people, but if you're giving them UBI would this the negative impact of a non-progressive tax? You'd simplify so much but getting rid of most accountants and the IRS, drop in the bucket but nice to see. They would certainly kick and scream. You'd also collapse real estate prices because cities would lose their need, but would kickstart rural economies like woah. This would help alleviate the rural/urban friction we're currently seeing.

I'm just arm chairing, I have zero background in economics.

Sometimes that is the case. I would say that if your household income is above $50k/year and you're living paycheck to paycheck, that results from over-consumption.

Companies are accountable to customers in the continuous rolling election of the market. You can vote them out of your life at any time. It is the ultimate form of accountability. This is especially good because bankruptcy as a form of accountability can ultimately affect everyone in the company, whereas in reality almost all decisions made by governments are handled by unelected officials who persist across party elections and for which there's no systematic removal mechanism. They can't go bankrupt. In some countries they can't even be removed, as the civil service isn't directly controlled by the elected politicians. Mostly they fly under the radar, screwing things up for their entire lives.

At least with companies there's some sort of limit to how dysfunctional they can get before they lose influence and power.

For now.

> It's perfectly possible to build in security mechanisms.

Sure it is, but there would have to be someone with the power to do so and more importantly the interest to do so. That's something I simply don't see happening in the USA - check their health insurance system for a concrete example. If they're unable to copy the similarly capitalistic but freer system of Switzerland or other countries with mixed private/public health insurance, then what hope is there with the issues I listed and the UBI?

I don’t think most people in poverty will work their way out of it. It’s a mindset and a lifestyle, in addition to a reality. UBI probably won’t change that.

It’s an interesting thought experiment: can you have a society without impoverished people?

Not starving, though, is something that can be directly impacted with UBI.

People in power, i.e. those with money, don't like giving up money or potential profit. Without protections in place, prices will simply rise or adjust and people will stop worrying about unemployment. In the end, it just puts a different label on things, creating another category for poor people, and I doubt it actually improves anyone's lives. This is because the problems aren't necessarily all at the bottom. The majority of the source of problems are at the top of the socioeconomic ladder.

Are the buildings x% better to live in?

Are the landlords providing x% better services?

No. The people who work there are producing x% more capital, therefore landlords take that x% and call it “cost of living.” This is not a new phenomenon in any regard, and UBI proponents must answer for it.

If their solution is rent control, then rent control is a solution even without UBI. Which of course it’s not a real solution, because then you’re distorting the price of housing and not going to get your construction/maintenance needs met.

LVT is a tax scheme that lets the market set prices for what it’s worth to live in an area (land rent/ground rent), then recoups that as a tax upon the people who claim special privilege to decide what to do with that land.

But yes, we should probably fix that before we implement UBI.

First, let's consider the price of the rent. Assume for a moment that somebody manages to fix all mental health problems, alcoholism and so on, and that magically everyone manages to find a good job that pays reasonably well. This is supposedly the dream land of the pure capitalists: everyone works and is productive and so no handouts are received. Well, what would you suppose happens to the rent in this situation? If everyone is able to pay, then rents would go up, wouldn't they? So the difference between UBI and this is only that in one case people don't necessarily have to work, while in the latter case they have to spend 8+ of their lives doing stuff they may not like.

What this means is that your main point is simply that you don't want people to have money to pay for housing, because that may make prices go up for you. You are literally advocating that some people must be homeless so that life for us is easier.

Secondly, the rent argument consistently ignores the fact that if you don't have to work, you can go live wherever you want. One could go live in Alaska and buy 1km2 of land for 10$ because who gives a shit? construct their own igloo or something and then live there forever. This would additionally free them up to spend a larger part of UBI on other products. Instead there is this weird assumption that people will forever cluster in SF or other highly populated centers, because apparently humans are ants and like to breathe pollution.

If people are less beholden to their current situation and more able to move freely, isn't it just as likely that rents will go down?

(Aside from the fact that plenty of places use mechanisms to control rents, if this is a real problem)

Just because [1] increases, doesn't necessarily mean [2] does.

If you increase the housing supply, the price falls. Increase it to a point where there are some vacancies and suddenly landlords don't have as much bargaining power to take your entire UBI. At some point a landlord is going to say "well better to fill it for $900/month rather than let it sit empty".

I think a huge part of UBI is making the economics of the essential things in life work out so normal people have the power when it comes to basic needs.

The problem with the high cost of housing in markets like San Francisco, is the wealthy capitalists owing real estate create regulations preventing any new housing from being developed.

Actually, you need water more than food. Why isn't fresh water $1000/gallon? Why do we have discretionary income at all?

You can't just state that and it be true.

> It's understandable that people think like this in a place like SF where landlords have grabbed up a lot of salary increases, but it really doesn't work that way.

Yet, it does work that way. In every city I have ever lived in, it's worked that way. For rent in particular, any excuse that more can be paid leads to higher rent prices. A company built a new office nearby? Rent goes up. More "affluent" people are moving into a particular area? Rent goes up. And so on.

> If it was true, rents would keep climbing to 90+% of incomes but they don't.

Why? That's not the implication. Rent increases are done in a cleverly predatory way. Often times, rent is increased in small to medium steps but frequently, and the notice of such rent increases is notified in the minimum (if that) time legally required. That often leaves renters stuck because there are other, big surprise, expensive barriers to moving. Rent is a predatory system that maximizes the amount of rent that can be collected. That doesn't mean it goes to 90% of incomes as you claim, which nobody else is claiming.

My overall point is not about just rent. By providing UBI and not putting other protections and improvements in place, a capitalistic society will not just sit around and leave meat on the bones. Things will simply shift and people will still be in poverty. A poor educational system will still be there. Creditors will still be around. Etc.

Will the same happen when everyone makes x more? Only if house ownership costs remain flat. I don’t think that will happen - cost and demand.

WFH directly affects the relation between work and place to live. If that doesn't greatly impact rents, neither will UBI.

On the other hand, if it does, there's not much more to gain for UBI.

What do you think every landlord will do next year?

Because it's not about mere money, but about power. Getting double the money you get now doesn't make you more powerful than e.g. Jeff Bezos. In some instances it might make you less (e.g. if the cost of living increases because of the extra money circulating, if you start depending on the extra money, etc.)

Take government grants and other forms of funding received by universities. Sure, it sounds nice, but the result is that institutions slowly begin to depend on these sources of funding to the degree that their successful operation and even very existence depends on them. This puts universities in a very dangerous position and this dependence has been used to steer universities in directions they might not otherwise have gone.

Maybe UBI would come with some sort of rent or price controls. Or maybe the fear of massive inflation would temper the greed of the rent-seekers. I don't know how it would play out. And I have to say I'm generally in favor of UBI. Just thinking out loud about how it might not be as helpful as it could be.

oh, all my tenants have an "extra" $2,000 a month? they can pay more. housing is inelastic so tenants are the ones who have to bear the increase.

Because that money is coming from the rich. Would you say your boss/employer has less power over you the more you make? IF that is the case, it's not because of how much you make but rather because of how much value you have to the company. In the case of UBI, there is no value exchange, only a handout. If there is a value exchange, it's merely the prospect of less riots/civil unrest.

(This is not even to mention the wash effects of inflation, which are covered well in the other comments on this thread)

UBI will help the destitute, but if the person holding the purse strings, be it a billionaire philanthropist, the government, or your employer, and you're dependent on that to survive, that gives that entity power over you.

I mentioned this in another comment, but I fear UBI will be an excuse for those in power to have even less incentive to care about other problems like education, healthcare, the credit system, consumerism, etc. I fear it will be the case of "we're giving you free money, what more do you want?" from the government and wealthy.

The point of the article, is that centralized planners are really bad at calculating these things, thus the eventual collapse of the Soviet Union and China moving to a much more market based economy.

The logical leap that you are missing is that prices don’t always rise quickly enough as a response to increase in wages. What a person is willing to pay is only part of the pricing equation. You also have to consider what competitors are charging and how much potential margin there is to play with.

Inevitably though, all prices consolidate and all players in the market will charge more to meet the increase in wages, it’s just a slow process.

The only time it happens quickly is if each business conspires to raise prices simultaneously, which isn’t going to happen or may be illegal.

So yes, increase in wages or handing out UBI inevitably raises prices after a period of time, necessitating the need for even more increase in wages and more UBI. It’s not a one and done thing.

* employer wages for low-demand workers will drop, as competition for low-demand workers will not increase, and those workers will accept a lower wage reasoning that the UBI 'makes up the difference'

* if employer wages are not allowed to drop below a certain point (the minimum wage), then more disposable income will create increased demand for scarce resources (e.g., housing that is a bit better than currently occupied) thereby causing prices to rise.

I'm no Econ major, so happy to hear how my reasoning may be in error.

But I agree, abolish alimony and let UBI take care of that, so both spouses can freely go their own way if desired.

Housing is its own story because anti-development policies have constrained supply, which artificially forces prices up. However, 1) it's important not to conflate it with cost trends of other basic needs, and 2) there's a strong argument that increasing base-level income also increases mobility to lower-cost areas, which has a stabilizing effect on housing. The few reputable studies on UBI-equivalents I've seen show pretty minimal price inflation in comparison to the income gains, for example [2].

[1] https://fred.stlouisfed.org/graph/?g=1xKh

[2] https://www.aeaweb.org/articles?id=10.1257/app.6.2.195

Not really. The income tax didn't exist before 1913 and the government was way smaller so there wasn't a even need to collect a lot of taxes. Are you thinking of the 50s? Because even in that time people just avoided to declare all their income (it was easier back then) or used other loop holes to avoid paying taxes [1]

[1] https://taxfoundation.org/taxes-on-the-rich-1950s-not-high/

Not to mention a lot of other social programs that would be folded into UBI and eliminated overnight. Social security, food stamps, rent assistance.... That's not enough savings to pay for UBI, but it's an appreciable chunk.

And the existence of UBI would imply the existence of a national registry, which would drastically change the equations regarding illegal immigration. Border enforcement becomes a lot less important to some anti-immigrant demographics, if those immigrants cannot receive any welfare. Police for fraud, sure, but maybe you don't need as many fences and armed guards patrolling the border?

I'm just saying the knock-on effects of such a drastic shift in society would be huge, so expecting a simple comparison of current costs and revenues is so simplistic that it's guaranteed to be off by a lot.

Situation in Germany for unemployment / welfare: 450sqft apartment, utilities included, TV, smart phone, 400€/mo cash. Where are those serious proposals that suggest making the UBI pay less than the current social programs?

The hubris in this is utterly breathtaking.

Have you done the math on this? The scale of UBI is so large that it has to mostly come from the middle class. A meager $20k UBI for all 300 million Americans would cost $6 trillion. Even if you liquidated the 100% of wealth of the top 400 Americans you'd only get $3 trillion, and you're only able to do that once, not every year.

>You just described most jobs.

No. Now you depend on a lot of semi-powerful un-centralized instances, and not just one point of failure. And you can pick your poison according to your tolerance. It is not perfect, but it does not leave you at the mercy of one and only one entity without any recourse.

This is like Google banning you on gmail, and hence adsense and youtube, or Paypal or Visa banning you on their payment network, only a million times worse.

The notion of a right does not include material implementation of that right for you by others, it merely states that you have a right to earn it and keep it by your own work and effort.

A right can be withdrawn, especially as we a working towards outcompeting lots of people using machines. Then keeping a large population would be merely a hobby of the powerful.

> For example, see the endless posts on this site about 'culture fits' and ritualistic hazings posing as interviews.

Right, it is not perfectly efficient, but better than alternatives that are determined top down by rigid rules enforced by a powerful apparatus.

Basic rent controls and other affordable housing initiatives are usually advocated by UBI proponents. There's no reason we can't have both.

OTOH, basic goods becoming more expensive means producing them becomes more attractive which leads to lower prices or better wages (because less people will be willing to work shit jobs with crap pay like in the meat industry today).

Why doesn't every change in income level and distribution just change price levels of goods demanded by different groups resulting in no change in relative buying power? Several reasons:

(1) No one has access to idealized monopoly rents, and

(2) (relative to redistribution) Very few goods are demanded only at one point in the income distribution.

Everyone gets X+1000 instead of X. That means if X used to be 1000, you now get double your income. If X used to be 100000, basically nothing changes for you. Perhaps double the income does not mean double the purchasing power because of the effects you stated, but there is no doubt your purchasing power will increase.

Rents will go up, that is very likely. However, it is extremely unlikely the rents will go up by $UBI everywhere. Most other products will remain unaffected. That means that if your rent goes up by $UBI/2, your purchasing power has still increased by 1.5X. This is a gigantic increase for poor people that live paycheck to paycheck.

My own opinion is that I don't know the correct way to do economics in the future. But I do think that we at some point should think very different. I don't think the current system works out for most people in the future. And UBI looks more like a band-aid than an actual fix.

You need to figure out who they are to be able to give them money in the first place. That's not the thing you're saving on, but all the other checks to see if you're justifiably unemployed/disabled enough to be receiving this money.

A big problem with the welfare system is that people only get it when they don't work. They lose it when they get a job, which can often mean they actually lose purchasing power, so they're effectively being punished for working. UBI creates a system where you always get ahead by working, even if it's only a little bit.

Of course you still need the basic civil bureaucracy; every country needs that. But you don't need an extra layer of bureaucracy on top of that.

Whereas for your argument, I’m not sure how you come to the conclusion that inflation will cancel out all benefits. There is no reason to assume that.

And on the subject of low income housing, it's often highly regulated, and can't be hiked arbitrarily.

If I've understood correctly, your argument is that the inflation in the basket of goods consumed by low income people exactly cancels out the increased purchasing power, I'm not sure you can argue that's definitely the case.

Renting property definitely should be treated as a business, done by companies, and heavily controlled by regulation to favour the tenants. This is how it's done in Berlin, and it works really well.

Treating property as an investment vehicle is actively harming society.

My point is: there needs to be competition on the supply side in the housing market, to keep prices somewhat related to the real cost of the house. If this isn't possible, the government needs to step in. I hope to avoid that where possible, though it's certainly necessary to prevent landlords from raising the rent on people after they settled in a home.

Maybe higher property tax would work then? You need more revenue for UBI anyway.

And also, you CAN build new houses in lots of places that are not the current "city centers".

That's not right. We're living in a world like this. When people cite stats that show x% of people living paycheck to paycheck that is almost guaranteed to be due to over-consumption and consumer debt if your household income is above, say, $50-60k/year. At that level, you have over-consume to have nothing left over.

That is a quintessential example of "throw baby with bathwater". You've replaced regulated institutions staffed with credentialed professionals (medical and otherwise) providing safe and structured environment and healthcare, with mentally ill people living in tent-cities and squalor, surrounded by crime, prostitution, abuse and illegal drugs and exposed to the elements.

Tell me again how you've guaranteed 'basic human rights' with your replacement for institutional care? And don't tell me that any problems in the 60s and 70s with institutional care, could not and would not have been improved over time. Instead, the policy to dismantle state and municipal institutional care destroyed countless lives that would have benefited from said care.

>The role of any modern society is to offer people who need it treatment and basic support (and that should include housing, of course), without impeding their basic human rights.

And people who aren't capable of making the best decisions for their lives due to mental illness - how does that factor to your equation of 'basic human rights'?

When people talk about UBI, they usually forget the healthcare-problems, because that's a big financial burden which will sting the posibility of UBI.

In my own east european country, we have a stable Roma population (about 10%), of which cca 98% never work. They already rely completely on welfare system, to the point of making enough children to have large support payments (families with 10 kids are common, 15 is not unheard of, although kids are sometimes running around bare naked in the snow).

I can imagine quite a few countries would literally stop if given the option to just now work

1. AOW, the state pension

2. Private pension system regulated by pension law

3. Individual private pension

Slight nitpick on the AOW, you don't need to live in the Netherlands for at least 40 years. It's by rate, so if you lived 20 of the 40 working age years in the Netherlands you will receive 50% of the AOW (even if you leave the Netherlands).

https://en.wikipedia.org/wiki/Pensions_in_the_Netherlands

You don't know that - you just base it on your theory.

Of course, every idea gets perverted by current political system, but the problem is often not the idea itself. Huge appeal of UBI is that it's simple hence easier to control. Taxes were supposed to be simple too and yet they got overcomplected to serve the special interests. The danger of abusing UBI for political gains is as real as it happened with taxes, but it doesn't mean the idea is inherently bad - we just have an inefficient and harmful government system and fixing it should be a priority if we want anything nice like properly implemented UBI. Another Yang's idea, Ranked Choice Voting could at least mitigate some of the issues like political bipolarity.

UBI, to a significant degree, keeps you from falling into debt in the first place.

> The state of Maryland provides free housing via HOC and free food via SNAP, yet the recipients of such programs I have worked with still frivolously spent cash on toys and luxuries (not to mention booze, cigs, and lotto) as soon as they got it and were in no way on a path to self-reliance. If free food and housing doesn't provide stability, I fail to see how UBI would (especially considering most UBI checks would be eaten as rent which is largely equivalent to HOC)

Means tests. The free food and housing isn't actually stability. It's only there temporarily, and only if you're poor enough. If you at some point attain "success", you lose the thing that made you stable. For SNAP that might be okay, but knowing that you'll need to move if your income goes up isn't stability, it's the opposite.

> When I helped them get their accounts in order, we found they were paying Comcast for cable despite not owning a TV, they were paying for all sorts of extraneous insurance and warranties they didn't need because the letters in the mail had predatory "amount due" stamps in red on disguising them as bills, etc.

Indeed, these things are bad. I'm claiming they're a symptom.

> That's largely just a roundabout way of stealing (if you consider defaulting on debts stealing, which I do in many cases). "If I frivolously spend my money before paying my debts, then I don't have to pay my debts!"

Sure, whatever floats your boat. I'm not applying value judgements, I'm offering solutions.

Now, imagine the world in which that is true and we don't pay people basic income. Millions starving on the streets sounds so much better.

Wouldn't that increase the supply of housing and reduce the price?

I'd very much prefer others working as well instead of me having to work more to make up for their not-working, ergo I'm not such a big fan of that kind of wealth redistribution. I'd like a wealth redistribution combined with a work-load redistribution though. They work, I work less, I make less money, they make money, the contribute.