Basic income is a bottom-up stimulus package, like how bailouts for banks are "stimulus" packages but nestled in Reaganomics, i.e., expecting the money to trickle down. Except that bailouts sequester the money almost exclusively in the banking industry and so are useless for everyone except those who are already rich, and the government itself.
Basic income fills the economy with money that can be really spent, and like the article says people will vote with their dollars. I can't understand why free market fanboys don't like it! It's the best way to incite competition in the marketplace by removing the exploitative (i.e., freedom-revoking) abilities of the companies that prey on the lifestyles of low-income workers who are stuck working multiple jobs just to get by.
Bank bailouts, in theory, are to be paid back, with interest. In a lot of cases they were. Not all, of course, but the economy turned. Net, bank bailouts were a good investment. QE may turn out to be as well (I may doubt that, but truth it the jury's still out)
If that same deal can be made, believably, for basic income, we wouldn't be having this argument: we'd provide basic income, today, as a loan. Hell, I'd fight to add my own money to provide that basic income.
Since you pretty much don't like me anymore at this point, why not just go ahead and fully state the problem:
What we cannot have in the economy, is a large, and potentially exponentially growing, group of expenses without any useful work.
And when I mean "we cannot" I don't mean that I'm denying this to you. I don't mean states don't want it. I don't mean I don't want to give everyone that. I mean we cannot. Any such policy must fail in a limited amount of time.
I mean you cannot have basic income for any length of time in the same sense that you cannot paint the sky green. Disappointing perhaps, but simply a parameter of existence, nothing more.
You shouldn't blame economics for this. Nor should you blame states, banks, the rich, or anyone. The only things to be blamed for it is thermodynamics. Of course the universe couldn't exist stably without those laws, so maybe math itself should bear the guilt.
In risk adjusted terms bailouts lose money by having easier terms than private investments.
Further, bailout money came from loans (bonds), and the government lost money both from the loan payment and the higher interest rate from selling more bonds.
People in prison do no work yet society has plenty of surplus to cover them. The reality is minimum wage jobs are a tiny slice of the economy because they create so little value. If BI means 1/2 of those jobs don't get done then no great loss.
If the government pays above market rates for gold then they are clearly losing money. Why do you think there is a difference if they offer a loan at say 1%?
Transactions do not occur in vacuo. Your question must take into account who is buying, who is selling, and what the alternatives are for both parties.
If the government is offering a loan at 1% it's probably because it's a better option than offering a loan at 3% and losing the partner who would otherwise be a net positive for the country.
I doubt buricrats are capable of regularly making that choice correctly. Remember communism failed in large part because central planning is hard.
Further, if a company's option is to fail or give up 90% of it's stock it's going to give up 90% of it's stock. The idea the government needs to give great terms to a failed company is simply corruption talking.
Not sure why communism was brought into this, but your repetition of that common trope is misinformed. A planned economy theoretically works just fine as long as external adversaries aren't manipulating the global market to your detriment, deliberately excluding you from global bank dealings, and aren't putting a bunch of pressure on you to develop a massive military budget overhead. Without these influences, the inherent cost in running a communist economy is lower than a capitalist one. Why do you think communism was villified so much pre-Stalin? (During and post-Stalin the USSR got a lot of flak, and rightly so, for breaking up citizen collectives and killing millions of its citizens.)
Also not sure where the "failed business" idea came in here. It seems like you're just swinging your sword at the closest straw men.
It just a loan if the business is fine. It's only a bail out if they are sinking.
I don't mean communism failed because of central economic planning. But, China is a great example of how totalitarianism can survive, but central planning is hard.
If it makes you feel better I can point to plenty of US examples. Central planning seems like a good idea, but it's really harder than most assume.
In the US, paying prisoners is technically optional per the 13th amendment loophole.
Furthermore, the US has the highest incarceration rate in the world, and combined with for-profit prisons’ political contributions, there are perverse incentives and outright corruption to overprosecute poor and minorities, as evidenced by the skewed prison vs. entire US demographics.
Yes, that is the point, they are not paying them fairly and pocketing the difference to subsidize prison costs. Meaning using prisons as an example of UBI being viable isn't a compelling argument.
Your argument fails at the reality. For example in Germany there is social security since a very long time. Some people there get money without doing any work! Still, the country works, pretty good actually.
And that is because states don't work always in ways that are intuitive. If you always follow your intuition, you might end up writing what you did.
Hi, Belgian here. Social security is something completely different than basic income.
Social security means that if you lose your job, get sick, or any other unforeseen setback happens, you don't starve. The goal is to get you back to work. And if that is not possible, society is so nice to support you. You know, the people who are able to work. I'm more than pleased to help out people who really are unable to work.
Basic income says that your basic income needs to be covered, for everyone, even if you are fully capable of working. So actually anyone can live a 'basic' life without doing work at all.
If it seems too good to be true, it probably is. In a society where there is no incentive to work, people will work less, less value is created, and due to scarcity, prices will rise. And so your basic income won't cover your basic needs anymore.
It's actually pretty easy to reason about economy like this. Just forget about money, and think of people producing and consuming value. If you don't produce, you can't consume, simple as that.
Some people argue that in a basic-income world, people work as much as normal. But I would like to see that in practice first.
> So actually anyone can live a 'basic' life without doing work at all.
So what? That sounds like a problem, but doesn't need to be one. People could already go robbing and killing those around them, but they don't. Anecdotes won't suffice here.
> In a society where there is no incentive to work, people will work less, less value is created, and due to scarcity, prices will rise.
People do a lot of charitable work without any receiving any money in return. That shows that there is are strong incentives to work other than receiving an income.
Besides that, yes I think prices would rise. Not uniformely though. Surely, asparagus would become more expensive, but cars not to the same degree. Picking asparagus is a shitty and hard shop that is outsourced to poor people because it is low paid. No, if the poor didn't need to do that work, they wouldn't. So the wages would need to rise. Finally, for it is long due. The economy and the prices would shift and balance. For the better.
> If you don't produce, you can't consume, simple as that.
Unless you are simply given part of what is produced. Which is done in reality. As simple as that.
Stuff is produced, and will be produced. Because a basic income is just that, a basic income. Want a car or own a house? You have to work. Seems very reasonable to me. Also, machines will happily continue to work.
> Some people argue that in a basic-income world, people work as much as normal. But I would like to see that in practice first.
Work is not a universal good. I wish poor people wouldn't need to do the horrible job of picking vegetables only the richer eat. I think that work should stop. It's degrading to the workers. Still want your asparragus? Invent better machines or pay a lot more so the people who pick it get a fair wage.
> What we cannot have in the economy, is a large, and potentially exponentially growing, group of expenses without any useful work.
The solution would be to implement it so it forms a self-regulating feedback loop. It is indeed true (and tautological) that a basic income can only be as large as it can be. But it's also quite clear that in most circumstances this amount is not zero. And there is a lot of useful work done by people who don't get paid for it.
We can analyze the effect of basic income using MMT, modern monetary theory.
Every dollar spent by the government is a dollar in someone else's pocket. That dollar will be split and used in 3 ways: spending, taxation, saving. So here's the algorithm...
int saved = 0, taxed = 0;
1) For every cent taxed, add that to "taxed"
2) For every cent saved, add that to "saved"
3) For every cent spent, recurse
So, every dollar spent by the government, with the algorithm fully applied, is completely distributed into taxation and savings. And taxation is simply a return back into the government's hands.
So the net effect is that some fraction of each dollar spent by the government goes into private savings. You end up with "twin peaks of debt and savings", in this case government debt and private savings. Government spending is essentially monetary policy... and basic income is government spending that is fair and democratic.
But government debt doesn't grow forever, because there's income outside of basic income, and that income is taxed as well.
> What we cannot have in the economy, is a large, and potentially exponentially growing, group of expenses without any useful work.
I'm no economist, but that proposition seems flawed.
Income support for people without jobs has more-or-less worked in western countries, in that those people aren't starving to death and are actually buying things.
It has similar advantages and disadvantages as other non-investment costs: but x million people decide how to spend the money instead of the government.
A feasible way for it to fail would be if enough people decided to stop working and rely on basic income, leading to not enough produced goods and rapid inflation, essentially make basic income too low. I think this is highly unlikely to happen, practically because there will always be people incentivised to work because they will earn more money, and morally because people seek fulfillment in live, and a large amount of people find that in their jobs.
> You shouldn't blame economics for this. Nor should you blame states, banks, the rich, or anyone. The only things to be blamed for it is thermodynamics. Of course the universe couldn't exist stably without those laws, so maybe math itself should bear the guilt.
Could you elaborate on how you believe thermodynamics is to blame? I don't quite follow your argument.
Rentiers are a very small group that arguably organize resources, they don't do nothing. For instance, it is commonly accepted that the markets that allow for rentiers to exist far outperform communist and the older king/nobility directed markets and even mercantilist markets.
Pensioners are a temporary aberration. Of course we can take care of a fixed and tiny percentage of the population while everything else is growing. The issue is, that we've stopped growing. Population growth in the west stopped long ago. That means that for the coming 20 years or so pensioners will "grow" exponentially (or rather exponentially growing birthrates from 50-60 years ago will get transformed into pensioner growth), whereas the working population will actually shrink. Even in China. In Japan it will crash.
And in case you feel like automation will save us ... well, where is it ? Productivity growth stopped in the 80s, along with the introduction of large scale automation.
Unless something dramatically changes from now on there automation looks like at best it can temporarily prevent worse than the current situation.
And what could change ? Having computers organize things is old hat by now. Having factories, actual production automated ... even older hat. Mines, ... just about the only thing with real economic impact remaining is house building.
How do you figure that? Libertarians are by definition against any government involvement in the market. Governments giving citizens money is something that falls under the category of "government involvement."
Libertarians traditionally called Basic Income the Negative Income Tax. Milton Friedman was a big proponent of it, and many Libertarians are big fanboys of Friedman and the Chicago economics cohort.
Well, it is free money, that's the point; but neither that nor being "socialism" automatically makes it bad.
This article is an interesting way of pitching basic income to a "capitalist"/right audience by phrasing it in ways like "basic income is fuel for markets", "buying is like voting" (!) and "I like markets. I want to reduce the size of government. I want less bureaucracy. I want less administration. I want fewer government jobs."
Yes, it was an unusual article in that the author was doing a lot of work to strawman-out conservatives and then make the UBI pitch.
It wasn't a bad pitch, but it felt really loose and meandering, like it could have ran a third of its length and been much more cogent and direct. Instead of direct and succinct, I got the feeling of an author standing out in a field, waving their arms around, while breathlessly making all sorts of tangentially-related generalizations and responses.
And I think that's the problem here: folks on both sides of the UBI issue would rather deal in generalities and grandstanding instead of just trying the dang thing out a bunch of times and seeing what works and what doesn't.
Twenty years ago, the U.S. was obviously in need of some kind of revamping of its healthcare system. Instead of trying hundreds of things out and quickly iterating a learning over time, what happened was that the issue was argued at the highest level of abstraction and in generic terms: what kind of modern country doesn't provide healthcare for it's people?
It took decades of argument, and in the end we got a one-size-fits-all solution that is now going to take decades to modify and adjust. If you want responsive government, this way of discussion and change is a dysfunctional way to improve the quality of people's lives.
So with UBI, I'm quite interested in the various experiments and the low-level details of what was tried and what kind of results are produced, much more so than some nebulous arguing and strawmanning around the concept in general. I support the concept in general -- if we're going to spend a lot of money on the poorer folks in society (I believe that isn't changing), then we should be constantly looking for ways to make the outcomes better. Big, animated discussions around what socialism is or isn't? Not part of an effective national dialog.
Also, Alaska is not a conservative state. It's a libertarian one. Many, many people seem to want to conflate libertarianism with conservatism. They are entirely separate (Insert long discussion here about the differences between libertarianism in the states and conservatism. Also another discussin about just what the heck conservatism is after the election of the recent president. Neither of these discussions are probably useful or germane to the topic of the essay)
> Everyone should get enough money to be able to refuse to work. That way, the incentive is shifted to employers, where it should be. Want someone to do something? Pay them enough to do it.
This sounds nice in theory, but how doesn’t this result in price inflation? Not only are you going to be taking a portion of businesses’ profits in taxes, but now you are increasing the cost of labour. And frankly, some jobs suck so badly that no one is going to want to do them without being paid a ton of money. For example, manual agricultural labor. Food costs would almost certainly skyrocket. (Unless you account for illegal immigrants, which you couldn’t naturalize because then you’d have to give them a UBI).
I don't know about the US but in my country manual agricultural labor pays so much only immigrants living in hay barns can afford to do the work. for everyone else it doesn't pay enough to do the work
I always see UBI mentioned when people discuss automation and the disruption of labor. Automation could address your last concern regarding inflation and jobs people don’t want to do.
There would be a rebalancing of prices, which is really an intended effect. Things would be in flux for a time, then settle at a new equilibrium. Food prices may go up, other prices may go down. The new equilibrium prices may well be higher on average, but the more important question is, how much can a poor person afford to buy?
I can't manage to get past about paragraph two. What an idiotic piece of writing with zero basis in reality.
Money is not a means to "vote" on what we should produce. Money is a means to reduce friction in the trade process. It does other things as well, but its primary purpose is to make it easier to get the things we want by reducing how much time and effort goes into coming up with a thing to trade for the thing we want.
So, say you want a steak dinner and you are a programmer. You don't have to go to the restaurant and offer to program something for the owner in order to get your steak dinner. You program for your employer. They give you money. You take money to the restaurant. The restaurant doesn't have to have immediate need of programming to cut a deal with you.
There is an argument to be made wrt the idea that lots of people are adding value to the system that is hard to quantify, hard to translate into money, etc and those people shouldn't be left out in the cold, not just because it is cruel, but because it actively harms the system as a whole. I was a homemaker and the feminization of poverty is a genuine phenomenon. A big piece of that puzzle isn't sexism per se, but the simple fact that women are expected to invest time and energy in taking care of other people on an ongoing basis. The degree to which they do this for other people often doesn't really come back to them.
But, I am doubtful that basic income does anything to remedy that situation. In fact, I have fears that it would only serve to entrench the expectation that women should just accept basically being treated like slaves by the world around them. I don't think this is a good thing. It is one of the reasons I am not pro UBI.
I think there are much better ways to try to not leave people out in the cold entirely. They include universal basic healthcare and access to genuinely affordable housing. Addressing those two issues wouldn't fix everything for everyone, but neither will UBI.
I think this is an unusually good write up of some of what is broken with the idea of UBI:
The article that you linked was well-thought and well-written. I liked the more bottom-up approach to the issues and that Mr Sarris at least offered kernels of alternatives.
Ignoring for a moment that the decision-making ability of the US legislature is all but broken, I worry that the sheer complexity of the issues surrounding UBI would make adoption – or even learned consideration – impossible.
And, as you and Sarris mention, the relationship between UBI and healthcare and housing (rents) is a whole other can of complexity.
I think that some sort of UBI has become absolutely necessary.
People who have money tend to have so much of it that they can't possibly spend it efficiently - There is no way for the money to trickle down evenly because wealthy individuals rarely interact with people who are outside of their own social class. In the case of extremely wealthy individuals, they even have to hire a security detail in order to further insulate themselves from the lower classes.
I think that's why cryptocurrencies are going up so much; the very rich can afford to keep 'throwing away' an unlimited amount of surplus money. I don't think cryptocurrencies are a bubble because bubbles only pop when the fear sets in; but if you have unlimited money which you don't care about losing, you have nothing to fear. The way I see it, cryptocurrencies are like UBI for tech people.
The author also has a series of different ideas on how to pay for it without raising income taxes. I found that more interesting than this, but I already fully support and believe in the capacity for amazing stuff from people who are set free
Just once, just one single time, I'd like to hear or read a convincing explanation for how UBI will not be completely captured by rents. I'm still waiting.
In a wider sense, it couldn't be "completely" captured since many people don't rent. But I suppose you meant it from the perspective of an individual tenant.
Rents are set by supply and demand. If we assume your hypothesis is correct then complete capture via rents would have to be a stable state.
I do not think that's the case. First of all, if rents were to go up by that much (relative to everything else) then supply would increase (more building, renting out of currently empty properties, subdividing, etc.). Furthermore, regions with lots of empty homes could not keep rents high because landlords compete against each other. And as a consequence, people in high-price areas would move away to cheaper areas.
In conclusion, it is likely that rents and other prices would go up, but it is almost inconceivable that it would lead to no additional purchasing power for the poorest at all.
When you tax something you penalize it - so in this case you'd penalize owning land. This would seem to concentrate land in the hands of the wealthy as far as I can see.
After a few years of reading UBI (Universal Basic Income) debates I come to the conclusion that it is impossible to teach humans new tricks. The way you earn and spend money is deeply ingrained into our brains.
When the Neanderthal used the ATM he knew that it was his successful killing of a sabre tooth that lead to the money he had in his hands.
Maybe we should just skip this immediate step and go full on Star Trek/Venus Project.
Some things are already free, such as the air. We don't worry about it day-to-dzy, because we have that need met. Once a need is met, we worry about the next one. There is no end to our needs and wants. So, with basic income, it just means all those needs step up one rung.
But without basic needs met, a workforce is less productive.
It's a similar argument as for universal health care and education. If that's too contentious, consider that most civilizations provide many things to their citizens, such as roads, currency, military, law and law enforcement. that are free to the user.
Thw difference is that today, basic income can be afforded by the state.
How can we motivate people to work but still keep them from being poor?
I have some ideas, but no real solution.
For example, I work as a software developer and after I switched to self employment I noticed that I made more money by working less. I started seeing people everywhere making money with stuff that requires far less "hard skills" then software development.
And still people do this, they work for much less than they're worth, so it can't be "just money" that motivates people to work.
Basic income could be interest-free debt extended by the government, whose repayment is done entirely from future taxes, i.e. without increasing the taxes they would have otherwise paid.
This would motivate people to stop accumulating the debt quickly, it would force people to make investments into their education (to increase earnings later), and it would act as a smaller incentive to game the system than a pure money transfer.
The basic reason basic income is so important is that people are not able to make any investment of their time if they are trying to make ends meet: going to work for McDonald's is not an effective strategy for climbing out of the poverty hole.
Staying home and attending classes or learning a skill, however, is. There are few people whose natural talents are so low that after investing 5-10 years, they cannot become skilled or productive enough to contribute meaningfully to society.
Additionally it would finance artistic endeavors which often take over a decade of practice before producing anything worth being sold.
Indeed, many artists could fail ever to make a meaningful tax contribution (to repay the basic income they were given), however, this may be a burden society as a whole could bear.
In addition there should be some kind of easy grace period or tapered end of benefits so that accepting a job does not "endanger" someone's benefits that they're already receiving.
We can't talk about all the different parts of society, but to talk about this incentives thing in terms of hackers: some programmers will choose to devote themselves to open source and take a basic income. This is simply a fact. For years, (5-10-20 years) they will live on basic income and contribute to open source. This is just a simple byproduct of introducing basic income.
So what needs to happen is that after someone has done that for 15 years, if a commercial company wants to hire that hacker for some reason, then there needs to be a smooth way for the hacker to accept that salary. This transition is a difficult one, but ideally, over a few years of working for their corporate sponsors, they'll have generated enough taxes to repay all of their previous transfer payments. All of the future taxes they generate are now tax base value that never would have existed without the basic income.
So this kind of a 'success story' can work. Basic income needs to be quite low, i.e. not much of an incentive, and it is important for people not to feel like they are endangering their basic income, by taking paid work.
You give free money to people who don't work (and probably don't want to work at all) and you naively expect them to have high-level of responsibility in the sense they eventually find a job and pay back money in form of taxes.
Do you know what's happen if you give free money to people? They just ask for more money! They won't feel guilty for not working because they would think it's rich people who has to pay back what they "stole from society" during last centuries. They would create complicated conspiracy stories which justify their side.
Many people (if not most!) are completely irresponsible for their own life. Face it! If it were not true, people in Russia wouldn't support paternalistic ideology of Putin's government, people in Venezuela wouldn't buy free-lunch ideology of Hugo Chavez, people around the world wouldn't believe in god to whom they would beg for solving their problems.
The only reason many people work (and contribute to economy) instead of drinking beer is that they need money for that beer. If you don't believe me, just go to Ibiza's San Antonio West End street and see how brits got wasted.
Perhaps, as a society, we don't need everyone "working" (as in participating in work-for-wages, as opposed to other forms of ad-hoc and uncompensated work). In fact, the idea that we do is very new - it's only really in the last 60 years or so that women, a good 50% of the working-age population, have entered the workforce.
Instead of using involuntary sexism as a basis for shrinking the working population, perhaps building a system in which working several hours 5-7 days a week for a wage is more voluntary would be a good thing and allow the rebuilding of communities and society.
Anecdotally, I have been on the receiving end of 'free' food and shelter from a friend or family member on several occasions (as an adult fully capable of working, but un- or under-employed). The benefits to my mental health were immediate and lasting, which in turn benefited those around me. I had free time and energy to further my education, write songs, produce videos, and try out some business ideas. I was also glad to take up more of the yuckier household chores, so those who were earning more wouldn't have to.
In the end, I found that yes, it was easier to be 'more lazy', but that allowing myself to didn't make me happier (more contented, perhaps, but not by much in the long run). I realized I would ultimately be better off bringing in more money doing something that matched well with my higher abilities.
As a man, it didn't fully occur to me until I read your comment how closely my experience matched that of housewives of the past-- many of whom, as it turned out, very much wanted to do more sophisticated and lucrative work once they had the chance.
Everyone, except for illnesses and severe disabilities, is actually working.
Why would you call worker someone with a salary on a construction company building other people houses but not someone, with UBI, building its own family house ?
The term "free money" is a silly put down term designed to close a discussion before it even started. Nothing is free. Money comes from somewhere, and it goes somewhere.
Even if this money did not end up creating more jobs, or reducing health care costs and so on, it's still going somewhere and doing something.
Money is not a market demand signal, it is a medium of labor exchange. I buy your labor with my labor. Some labor is more in demand than other labor, some is in short supply. Money bridges all the divides between these.
Where UBI fails is that it cuts labor out of the mix and allows some to benefit from the labor of others without performing any labor in exchange. Of course, banks and politicians have been doing this for decades, but a host can only support so many parasites.
It's very biased, so the people that get the UBI won't be able to afford nice things or to live in nice suburbs near good social/health/education services as people with earned money will be competing for those. Choosing not to work is choosing to not take part in society, social services are part of a society.
It still needs some sort of utopia to work, that's where it has some similarity to socialism, but there is no utopia.
I think UBI needs to be thoughtfully and strategically phased so as not to disrupt the status quo derogatorily. An overnight switch to UBI seems politically unfeasible because of typical quixotism of so many people. It's an experiment on a grand scale which always unnerves markets.
"First, saying basic income is socialism is as absurd as saying money is socialism. It’s money. It’s all it is. What do people do with money? They use it in markets. In other words, basic income is fuel for markets."
The brilliant flow of thoughts and deduction just blew my mind.
Socialism might be central planning. Basic income is almost the opposite of central planning, because it replaces all sorts of conditional and focused welfare with what is equivalent to a negative income tax.
That's why so many libertarians are on board with the idea.
That doesn’t sound right to me. Speaking as someone with mild Libertarian tendencies, UBI seems pretty contra to Libertarian ideals. Not the UBI itself, but the taxation required to fund it. Can you give references to any well-known Libertarian thinkers who are on board with UBI?
You are probably thinking exclusively of right libertarianism and must not be familiar with geolibertarianism[1] based somewhat on the ideas of Henry George[2]. They share most views with right libertarians such as the view that the fruits of a person's labor should not be taxed, but differ in that they view all land and natural resources as the common property of all people and as such believe that use of land and natural resources should be taxed at the full market value and then the proceeds redistributed equally to everyone.
And Gary Johnson, the libertarian nominee, was the only candidate in the 2016 US presidential election to comment positively on the scheme. I can't find the source of the claim, but it does seem to be an accepted stance:
Thanks for showing me this. I never knew about "Libertarian Socialists". I'm afraid of falling into the Scottsman fallacy, but they don't sound like the other Libertarians I've read.
I couldn't find anything about basic income on that page. Is there any writing from a self-proclaimed Libertarian in support of UBI?
Libertarians are not on board with the idea- libertarians are absolutely be against mandated handouts without critical purpose. A disingenuous claim at best.
Only right libertarians hold that view. Geolibertarians hold the view that all land and natural resources are the common property of all people and should be taxed at the full market value and then the proceeds redistributed equally.
The "ideological Turing test" is the attempt to argue for a position indistinguishably from a supporter of that position, when you yourself are not. If you can't convincingly do so, it's strong evidence you do not understand what supporters believe. Related to, but not identical with, "steelmanning".
> It’s really hard to look at the evidence and say giving people money is wrong, because having enough money means being able to buy enough food.
This person is conflating cash transfers (welfare) with UBI. One can think cash transfers and general welfare are good while still thinking UBI may have fatal flaws. And anyone that paints UBI experiments as approaching what truly Universal Basic Income would look like are deceiving. This person is repeatedly dodging real criticisms.
This article is mostly a verbose emotional string of arguments, but it doesn't do a very good job of explaining either of its two title claims.
Claim 1: Many people say "socialism" to mean top-down social programs funded by taxes, e.g. when people say uncontroversially "Sweden is more socialist than the USA," this is what they mean. UBI is a top-down social program. If you don't think that, ask yourself: What happens to the payments if the federal gov collapses or is incapacitated? (Is unable to organize payments or tax collection). UBI halts everywhere.
As a contrast, Farming is bottom up: For example the government of Afghanistan could collapse and it may take years before remote individual farmers even know that it happened. UBI receivers on the other hand would know as soon as the first check didn't come.
Claim 2: But UBI is "Free Money." That's the point. It has to be unconditional to be UBI, that's how they draw the distinction. Most people who advocate for UBI contrast it specifically with means-tested welfare.
> Have you ever played the game Monopoly? I’m sure you have. Is that a game about socialism? According to “free money is socialism” logic it is, because everyone starts the game with free money and everyone gets free money for simply passing Go.
This is a silly analogy. It's not free money even within the game rules. Passing Go is the condition. You can go to jail in the game, being forced to skip passing Go, even. Citing a game mechanic as a proof that UBI isn't free money is bonkers.
When UBI proponents say universal or unconditional, that's what they (proponents and opponents) are talking about when they mean free.
Convincing people that it's not socalism or free money is not enough. You have to make the argument that price inflation won't occur, that it can fail gracefully, that destroying the other welfare programs that do more than just give cash (like case workers in medicaid) is a good idea, and so on. UBI proponents ignore these just like Marx ignored implementation details, relying on the World-spirit-of-the-people (an odd kind of hand-waving mysticism) to ensure that it would work.
If you meet someone pro-UBI, ask them this: What happens if it fails or we can no longer afford it, after 30 years running? What does the generation that was never required to work, do?
If they say it won't fail, you know you're not talking to someone interested in creating a robust system. If your ideal is incapable of planning for failure, you haven't really thought about your ideals much. We know what large scale top down social failure looks like, after the last century.
I feel like this basic income ideology is really rooted in laziness - like, everyone likes free things, right? You don't have to work for it?
But - do we ever really ask where that money is coming from? The rich just give it? So then, why would I work hard to become rich, if its just going to be taken from me?
Its like income tax. Everyone loves paying tax on their income, right? (I, personally, do not.). So why don't we switch to taxing spending, instead? I'd much rather see the income tax abolished before any UBI fantasy ...
Comparing it with laziness is not far away from saying poor people are lazy. Laziness has nothing to do with it.
More often than not, such claims are often connected with not seeing hidden privilege as a competitive advantage. Of all of my successful friends, only one come from a socioeconomic environment that isn't middle class or above.
The ability to climb on the socioeconomic ladder is much harder for those without means and connections - these means and connections are almost always directly correlated to your family.
As a personal anecdote, all of my kids friends have parents which are able to support them financially and are able to work 40-hour weeks. They are all academics and their kids get the benefit from having the language and mindset of academics from an early age.
At the same time, my cousin is a couple of steps down on the same ladder. Her kids friends parents are working part time, often several jobs, and still have a hard time making ends meet.
My kids are according to studies (on phone so won't be able to reference - an easy Google away) more likely to achieve economic success, go to college and have a better chance ending up one step up on the ladder. Her kids are more likely to end up in crime, less likely to go to college, more likely to stay in the same socioeconomic class.
I'm pretty sure my work gives me more slack and ability to be able to be lazy than the part time factory worker. "Free money" would probably create more equality and a better chance for all kids. Your statement is shortsighted.
In my opinion, informed by what I’ve witnessed personally amongst my peers, poor people are lazier, at least in a statistical, group-average sort of way. This isn’t meant to contradict anything you say about privilege or economic status of parents. In fact kids learn that hard work and contentiousness pay off from their role models, parents, and peers. So successful parents end up having successful kids, and the phenomenon is not explained fully by Dad’s connections. Saying it’s “privilege” is only the beginning of understanding. There are some aspects of personality that parents are imparting to kids, and if you’re interested in helping the rest of the kids, you have to understand what that is.
The problem is that sales tax is an extremely regressive model. If two people buy $100 of goods, but one makes an income of $100K a year and the other $20K, the taxes are effectively 5X higher for the person making less money.
No one likes paying any taxes, but at least income tax aligns the motivations of the individual with those of the government. If you make more money, you prosper, and so the government -- which ostensibly creates a society that helps you to prosper.
In practice, that isn't remotely true. People on the lower end of the income scale (are forced to) spend a much larger percentage of their income in order to meet their basic needs. People on the higher end of the scale spend more on a dollar-by-dollar basis, but a much smaller percentage of their income. Then they save and invest the rest, which also creates more wealth from their existing wealth.
When they save and invest, what do you think happens to that investment eventually? It's converted back into cash and spent, donated, or bequeathed. The fact that there's an intermediate step of investment is irrelevant to the fact that lifetime ingress of value equals lifetime egress of value.
I'm sorry, but that just doesn't make any sense at all. All capital is not eventually spent; otherwise there would be no such thing as generational wealth.
Technically speaking, I guess maybe over the course of the rise and fall of a society what you're saying is true, but I don't think the government would want to wait that long to see some tax revenue.
Taxing spending tends to be regressive. Rich people end up paying less tax as a proportion of their income while the poor end up paying more.
It is however less visible. Income tax is at least upfront about how much is taken whereas tax on spending is spread out and often invisible unless you're actively thinking about it.
Sure you can make people happier about taxation by making it less visible but I'm not sure that's a good argument for it.
I never really understood the argument that taxing spending taxes rich people a lower proportion of their income. Even allowing for investments and savings, rich and poor are all going to spend the money they have in their life (ignore or tax the estates).
If there’s a 10% sales tax, then 9.0909...% of your wealth will go to it, no matter how much you make, invest, save.
>rich and poor are all going to spend the money they have in their life (ignore or tax the estates).
This is a spherical cow in a vaccum style argument. If you ignore estates and also ignore property and other investments that don't pay sales tax then yes, everyone pays the same sales tax. But the rich will disproportionally own investments and properties that will then be passed on to their heirs. Over any period and particarly over a few generations because of compounding this means taxing spending is indeed very regressive.
Sure, rich people will invest, and then get (hopefully more) money back and then spend it, subjecting it to same sales tax. And the tax on estates is higher than sales tax (over $5MM), so that’s hardly a dodge.
I still really don’t understand the argument, and I still sort of suspect that it’s fallacious, though I’d enjoy being proven wrong.
It seems to me that given a sales tax, a flat and identical percentage of every individual’s spending will go to the sales tax. If a person is “rich” but it doesn’t translate into spending or their estate, then what does that mean?
> It seems to me that given a sales tax, a flat and identical percentage of every individual’s spending will go to the sales tax. If a person is “rich” but it doesn’t translate into spending or their estate, then what does that mean?
Investing isn't just neutral storing of value. Owning capital confers a benefit to its owner while they own it. The line between investment and spending is arguably quite blurry, so if you tax just "consumer spending" you hit those who live paycheck to paycheck much harder relative to the benefit they derive from their money.
You're just restating the same mathematical impossibility. Compounding means that since you only pay sales tax at consumption rich people will pay much less as they will invest before the tax and have gains on all that pre-tax money. Estate tax is also definitely not higher than sales tax pretty much anywhere in the world. In the US in particular estate tax is only paid on very large estates which excludes almost everyone that matters for this calculation. For the purpose of this calculation estate tax is 0.
Yea, you caught me. I repeated the same argument because I think it works. And I don't see how your argument addresses it. In particular, this sentence:
> Compounding means that since you only pay sales tax at consumption rich people will pay much less as they will invest before the tax and have gains on all that pre-tax money.
doesn't really make much sense. Of course investments are pre-sales tax. The sales tax applies after the investments are liquidated to cash and the cash is used to purchase stuff.
Let's say our hypothetical person is "rich", but it doesn't translate into extra consumption spending, then what's the point of being rich? It's not like he's getting anything out of it.
You do have a point about estate taxes not affecting the majority of people, but estate taxes do affect estates with value greater than $5MM, and I'm working with the assumption that you and I are discussing "rich" people. The marginal estate tax in the U.S. ranges from 18% to 40%, which is higher than any sales tax.
>doesn't really make much sense. Of course investments are pre-sales tax. The sales tax applies after the investments are liquidated to cash and the cash is used to purchase stuff.
Say you have 100$ and you're rich. You invest that in the markets, compound for 40 years and end up with 4500$. You then get to pay sales tax on that after you've gotten your capital out multiple times over. If you're poor though you spend all the 100$ and pay tax right at the beginning, so you don't get to benefit from the compounding of your earnings because you have to use the money right away and thus have to pay the sales tax right away. Compounding is extremely important over even a single lifetime and rich people get to use it over generations.
>Let's say our hypothetical person is "rich", but it doesn't translate into extra consumption spending, then what's the point of being rich? It's not like he's getting anything out of it.
People put a very high value on aquiring wealth to pass on to their heirs. And even without that if what you buy is property there is no sales tax and you get to use that property throughout your life. If what you buy is investments you get to defer consumption till later and thus get much higher incomes through capital gains and thus pay all your sales taxes from investment gains of the pre-tax money you don't need to spend on day to day spending.
>You do have a point about estate taxes not affecting the majority of people, but estate taxes do affect estates with value greater than $5MM, and I'm working with the assumption that you and I are discussing "rich" people. The marginal estate tax in the U.S. ranges from 18% to 40%, which is higher than any sales tax.
The estimate from Wikipedia is that estate taxes apply to 0.2% of estates. That's what I mean by estate taxes being completely irrelevant for this discussion. The 0.2% of cases where your argument apply get to use all sorts of other tricks to avoid taxation, this is just about the difference between the people living paycheck to paycheck, the ones that get to put a little away and the affluent middle class. For all those 99,8% of the population estate taxes are irrelevant and sales taxes are extremely regressive.
If a poor person earns $100 and spends it, they're paying ~$9 in sales tax in my hypothetical world of 10% sales tax. The rich guy who earns $100 and invests it, spends $4500 and ~$409 (about 9%) of it goes to sales taxes. Sure, he gets 45x the value of purchased goods, but he also pays 45x in taxes.
Did you lose track of the topic of conversation? It looks like you're just detailing the ways that it's better to be rich than poor.
I was responding to ChrisSD's specific point many comments ago that: "Taxing spending tends to be regressive." To the contrary, it looks like it's neither regressive nor progressive. (I don't know the word for that. "Neutral", maybe?)
You're ignoring my actual points to just restate your conclusion. Money you use to buy properties doesn't pay sales tax, money you use to pass on to your heirs doesn't pay sales tax, money you get to save because you have surplus only pays sales tax after you've gotten your initial capital out multiple times so the sales tax on the initial income is 0.
But lets classify that investment gain as income as well and ignore that bit. Do you actually have any doubt that poor people spend a higher percentage of their yearly income on things where sales tax applies? That they buy less properties, invest less and then pass on less of a percentage of their lifetime earnings to their children?
That might be part of it. But things are rarely that simple. Another big argument is to act as a safety net allowing people to take bigger risks, like starting a startup.
I've seen rich people with baby soft hands that never worked hard. And I've seen dirt poor people with a broken body because of all the work. It's disgusting how you invoke fairness and justice.
I want to write a loooong point-by-point rebuttal but I'm just too lazy. Now if I were awarded a basic income maybe I'd take out a day and write it up! But here's a summary:
I am in the top 20% whose income is still going up and whose tax will be used to pay out the UBI. What's in it for me? Why should I care? I really don't. And all the politicians are also in the top 1% (POTUS is a fucking billionaire, former POTUS gets $400k for a speech). Even a poor man becomes rich when he is elected. Why would he care about the 80%. There is no rational world in which a UBI will work or be implemented as envisioned by the author.
The poor won't burn your neighbourhood and threaten your children. That's what's in for the rich. That sounds dramatic, but look at Brazil, and you can see that what I'm saying is not hyperbolic.
There is a huge correlation of the success of one person and their surrounding. In other words, for ones own interest the success of those around one is important. Helping the weaker helps a lot of other people.
I think it depends on how you want to frame what I said. Helping the poor at least around you is good for you. Now, you could say equivalently not helping the poor around you is bad for you. Rephrase what I said if you feel uncomfortable with how I stated it.
If in a mafia controlled city you tell a friend not to publicly expose a mafioso for else he and is family is in danger, are you blackmailing your friend or are you simply stating facts?
I don't see any support for your assertion. Why wouldn't we continue the status quo for a 1000 years? There certainly have been long periods in history where royalty has lived in riches and the majority have worked their ass off to support them. Only at the end do the royals get killed. But right now we're just starting! I expect this to last much longer too this time, since we have more automation now.
> We are not preserving the status quo right now, the rich are getting richer.
The status quo is that some people are rich and some are poor. To maintain it means the same people (more-or-less) stay rich and the same people stay poor.
> There is also the point that 1000 years ago the poor didn't know that they could kill kings
Basic income fills the economy with money that can be really spent, and like the article says people will vote with their dollars. I can't understand why free market fanboys don't like it! It's the best way to incite competition in the marketplace by removing the exploitative (i.e., freedom-revoking) abilities of the companies that prey on the lifestyles of low-income workers who are stuck working multiple jobs just to get by.