My primary concern with UBI is not the concept itself, but the risk for people in power to use it against the people.
Once UBI exists, people will rely on it for survival. It will be the single most influential campaign topic.
Worse, if UBI were to get 'Obamacared' then we'd end up with a massive battle over implementation, followed by a much worse system than the one we had prior (worst of all worlds with numerous 'compromises'), and then followed by a repeal and whatever subsequent chaos comes out of it.
I don't want to imagine what would happen to the folks who find themselves reliant on UBI if it were to go down that path.
I assume you misread what I wrote, or implied some opinion that hasn't been stated.
I want people to have enough money to live reasonable and modern lives. What I DO NOT want is for UBI to become a political weapon and for the people who rely on it to have it taken away suddenly.
That is a serious risk to that system that doesn't get enough attention. It could happen due to financial collapse or for political reasons. But no matter why it happens, the damage would be absolutely horrific.
> I want people to have enough money to live reasonable and modern lives. What I DO NOT want is for UBI to become a political weapon and for the people who rely on it to have it taken away suddenly.
Personally speaking, as a proponent of UBI, I reluctantly accept that the first versions of it will have to be state-based. If only to be able to learn from its mistakes and iterate from them to refine them further.
This is one of the reasons I'm such a cryptocurrency enthusiast, after the wake of the financial crisis and massive unemployment in Iceland they deployed, and subsequently failed, with aurora coin to try and experiment with UBI. Had we gotten more information from it would have helped to be able to have a decentralized version of it by now, but it was too much for such a poorly backed project to surmount.
> That is a serious risk to that system that doesn't get enough attention. It could happen due to financial collapse or for political reasons. But no matter why it happens, the damage would be absolutely horrific.
I think this is inevitable and not a question of if but when it will occur, UBI will not be the biggest contributing factor to the 'system' failing, either: it will have been an outcome of centuries of needless war, currency corruption and Market manipulation, ecological destruction and climate change.
its just a matter of time. At least having this in place prepares us as Species for what lies ahead, the status quo cannot be maintained, this much has to be accepted.
The transition is definitely terrifying, but the idea of getting this right has so much potential and worth the sacrifice when you realize just how broken the 'system' really is.
I think this what most don't understand when they see the Greta Thurnberg led Gen Z revolts happening all around the World, and they're dropping out of school to protest; this system is already doomed if you cannot convince the future generation play along anymore.
Your opposition is actually an example of a logical fallacy. I'm struggling to find the exact name of it. But it has to do with that fact that you are against the adoption of something positive that you agree with because of some hypothetical negative externality.
The perfect solution fallacy is a related informal fallacy that occurs when an argument assumes that a solution should be rejected because some part of the problem would still exist after it were implemented.[4] This is an example of black and white thinking, in which a person fails to see the complex interplay between multiple component elements of a situation or problem, and, as a result, reduces complex problems to a pair of binary extremes.
I think something similar has happened with minimum wages. It appears to me that the natural next step is to make the minimum wage grow with inflation.
Unfortunately, this hasn't happened, so we're stuck with various government-mandated minimum wage levels that are tied to the value of money from several years before.
Companies can now point to the law, and use this obsolete number as a metric by which to set their own salaries. What was intended to protect the laborer is therefore perversely being used to protect their corporate employer.
This destroys incentive to invest in productivity improvements, because the gains are eaten by wages. Most productivity gains in the economic sense don't come from people working smarter/harder, they come from investment in better machines and technology (capital). If you took the most productive worker today back two thousand years, their productivity would be massively reduced without access to any modern tools or equipment.
Productivity is defined as output per unit labour. This means any profitable investment the firm makes will increase productivity (assuming the number of employees remains the same). If the minimum wage was indexed to productivity, then any such investment would increase labour costs.
Live humbly on UBI, grow vegetables in your yard and invent a better method of automation in your garage. If you succeed at the latter, who knows? To me the point of UBI+Automation is that we unlock the potential of more people following a muse without needing to spend too much time surviving.
Indexing doesn’t have to be 1:1; the goal is to ensure some of the productivity gains go to the workforce, but that can be done while still allowing improvements to be a net benefit to the company.
> This destroys incentive to invest in productivity improvements, because the gains are eaten by wages.
No, the share of returns that go to labor is constant, so productivity gains are split between labor and capital the same as returns prior to the gains are.
In the alternative, capital captures an ever greater share of the returns over time because they are incentivized to invest in those areas that creates the most return to capital.
inflation is used to keep the "time value of money" working so that capital is incentivized to be reinvested, lest it lose all its value over time. this impetus leads capital to relentlessly seek returns, which over time compresses returns to labor in favor of capital.
so suppressing labor is certainly a consequence of our positive inflation policy. the intention can be debated, but note that various govermental units tolerated prejudiced efforts like mccarthyism and redlining too.
I think the intent is to 'keep employment numbers up at any cost'. But that there is a (predictable, and evidenced) unintended consequence to the prescribed method of attaining that objective is an indictment of the class-blindness of the liberal economic polity, and, secondarily, the brokenness of modern 'science' and 'scientistic' pursuits. (not saying the right is much better on that front)
i'm sympathetic to the original indictment that capital holders (like many hbs grads) realized, and then moved to solidify, this tilting of the board in their favor by supporting inflationary policy.
i'm not sure that the liberal economic polity is a distinct class from those same capital holders (but i generally disfavor left-right political framing anyways).
Yeah sorry to make it seem too much like a left versus right issue, I hate both sides, I just specifically pointed out "left" because the left purports to care about the "little people" (see Krugman) while very much actively pursing policies that are great for capital holders and rhetorically espousing policies tantamount to throwing bones to everyone else.
It's a tax on wealth, but as the Krugman article points out it also allows real wage cuts without the psychological barrier facing nominal wage cuts, which facilitates corrections when wages have overshot their sustainable levels, assisting in reaching full employment (unsustainably high wages necessarily reduce employment levels.)
This is related to why minimum wage is inferior to UBI as a basic support: minimum wage is in tension with employment, especially at the low end, in a fairly direct way. UBI, while it had to be supported somehow, isn't directly in tension with employment specifically at the bottom.
I'd like to see minimum wage tied to inflation but UBI tied to a funding stream that grows with output, so that per capita benefits grow (over the long term) with per capita output. And I'd like to see minimum wage decreased from the level it is calculated at with inflation adjustments by the hourly wage equivalent of UBI (for simplicity, annual UBI/2000, so that a $12,000 annual UBI would reduce minimum wage by $6/hr from it's pre-UBI level.)
Wealth is accumulated income which is subject to income tax
so wealth a different dimension, so even if you expect an additional tax that grows at the same rate? The units are incoherent.
That's only valid if you think "wealth" can only be a bunch of cash in a bank account you saved. You may own a piece of land that could even predate the government in some places. Or you may own a patent. That's "wealth" which is subject to different taxes to "income".
so even if you expect an additional tax that grows at the same rate?
I don't expect, anything I was just pointing a fact.
I live in a country that has experienced inflation over the last ten years and the reality is that income taxes have followed inflation but property taxes not, because the government doesn't update property book values as often. The result is that you can hold very expensive property while paying very low taxes. But this also happens in lots of other places: California and Proposition 13 come to mind.
> It appears to me that the natural next step is to make the minimum wage grow with inflation.
I feel that way too, but remember that indexing wages to inflation made the stagflation of the 70s significantly worse (I don't believe it was the cause, though it is often blamed). That doesn't mean it's not a good idea, in particular for the minimum wage, but some further thought is required.
After the government shutdowns and lock-ins began, I started to think about our current political trends. If we keep voting for political leaders that tend towards fascism or socialism, we could end up with severe consequences.
Both camps were eager to close restaurants and stores without establishing economic fallback plans. Essentially, they indirectly removed the SMB owner/middle class. This seems like the first step towards making people solely reliant on IBU even it is promised only as a "temporary fix."
M4A is similar as well. I guess all big social safety nets have this problem.
UBI and M4A would encourage me (and others) to pursue less lucrative pursuits (arts, research, gamedev, entrepreneurship, etc) but it would be hard for me to quit my nice tech job salary if there's the specter of the GOP potentially killing the benefits that enable my pursuit.
And that doesn't even compare to the effect that uncertainty has on the less fortunate.
Eh universal healthcare would probably increase 'drive' at a macro level as it doesn't chain the overqualified or highly productive individual to crappy jobs that happen to have good insurance.
Not to mention you lose the overhead of dealing with insurance, for you and your family.
But yeah, I could see a class of people who would use UBI to permanently slack off whereas they would be highly productive otherwise.
Edit: Note I'm from Canada and have taken healthcare for granted until I went to the US. My experience has been overwhelming positive with universal healthcare, and the only complaint is I've had to wait a few hours per emergency visit. Zero wait when serious though.
> But yeah, I could see a class of people who would use UBI to permanently slack off whereas they would be highly productive otherwise.
If you're highly productive, willing to live on a minimal payout, and highly prioritize time away from work, then by all rights you should already be on sabbatical eight months a year or something.
We should also have a voluntary charitable UBI. Encourage a culture where everybody contributes what they can to the fund, and then all donations are split equally among all citizens. That money won't be subject to the same political pressures; people who donate will feel good about themselves; and the bureaucracy needed to do this would be minimal.
I consider myself a fairly generous person but in a crisis like this my overwhelming concern is my close family. Charitable donations aren't on my radar right now.
You can't rely on voluntary donations to produce a stable income. A charity doing this would have to vary the amount paid out based on receipts. In hard times, donations and payments will reduce. This will reduce the effectiveness of a UBI in smoothing out recessions.
It will also suffer a death spiral because every donor will know how much every recipient gets.
If I put in 500 each month and get 200, then I'm going to look for a better place to put my donation. Not because the 200 is a bad RoI for me, but because 200 seems like such a pointless sum for everyone to be getting. I'd rather have that money funding cancer research or more pertinently, I'd rather give all 500 of it to people who need it.
Everyone will have their thresholds for what seems "worth it". The lower the payment gets, the fewer donors there will be, and the proportion of the income used for admin will rise.
Well hang on, not necessarily. The donations could be to a sovereign wealth fund of some kind, so long as invested money produces a somewhat reliable income, it could be seen as an investment in the eventual utopia UBI fans envision happening once the fund's large enough. Not a terrible way to implement it privately if the state doesn't get around to it now I think of it.
This is one of the bigger leftist critiques of UBI - instead of enacting meaningful change to the system, gifting the people just enough money to keep them docile and prevent upsetting the ruling class and, like you said, weaponising for further political gain
One problem is the implication behind that critique, that the poor should rather be kept poor until their anger is useful for class warfare (the political gain of the left.)
I sympathize with the left far more than the right but both sides seem perfectly happy to consider the proletariat as sheep when it serves their purpose. As far as I'm concerned, UBI would be meaningful change to the system.
>the implication behind that critique, that the poor should rather be kept poor until...
I think it's more that UBI will result in at best a brief reprieve from poverty. It won't be a long-term or even medium-term solution as it only treats the symptom, not the cause.
While I can celebrate anyone promising/implementing welfare programs such as UBI and the huge social benefits they bring, I am cautious of how these will play out politically.
>both sides seem perfectly happy to consider the lower classes as sheep when it serves their purpose
An at least brief reprieve from poverty would be better than nothing. We can treat the symptoms and the cause under UBI, just as we could do now, with the existence of welfare (such as it is in the US) and the minimum wage. I don't think these positions are mutually opposed.
Yes, UBI can be weaponized politically, and probably will be. But the current system is already weaponized. If it's turned against people hard enough, that only works in the left's favor. If not, it at least suggests that some degree of meaningful change is possible within the system.
My point was that, in France, where you have a strong social net that offers everyone to subsist, have a place to leave and health insurance, is not preventing people from protesting for more rights - at the opposite.
It is interesting that you frame it as 'leftist critique' instead of 'far-leftist critique'. As historically, exactly that kind of arguments were used by far left (communists) aginst moderate left (social democrats) and was a major reason for their split in 1910s.
The 'Universal' part of UBI is the key here. The problem with our current patch work of social programs is that the constituencies for each program are fractured and disorganized. A child tax credit here, a food program there, it is easy to slowly whittle down a social program in those cases. But a Universal BI means that any changes or cuts to the program will impact everyone. It is much harder to play politics when the constituency spans both political parties.
Regarding Obamacare, there were a lot of issues, but a large one was the 'keep your hands off my health care' crowd. These folks were convinced they had good health care and that the government would ruin it (ironically, many of them were on medicare). So right off the bat, the constituency was fractured. And for this same reason, I actually think Universal Health Care will be a much harder sell in the US than a UBI. Despite our health care systems very obvious issues, too many people think their current plan is good enough (and may not even be aware of their plans shortcomings) and are too worried that any sort of change could put them in a worse spot. With UBI, its a blank slate and a pretty easy sell. Gov: Hey America, here is $1000. Us: Okay!
> ...it is easy to slowly whittle down a social program in those cases. But a Universal BI means that any changes or cuts to the program will impact everyone
Sure, because the effect will be permanent removal rather than slow whittling down of other programs people depended on, and the people that depended on them will have to make do with whatever lesser payment the government can afford to pay out to much larger numbers of net recipients of a UBI
"Hey America, here is $1000, and $2000 in extra taxes to fund all those people that didn't need welfare before" is also a surprisingly hard sell. It's only an easy sell when you assume everyone's a net beneficiary
Another point that opponents to universal healthcare would claim was that granting access to healthcare services to the entire US population would degrade quality forcing rationing of service. With inequality you can buy your way to good service when you wanted it. However, with universal healthcare, you have to wait in line like everyone else.
Just to make it clear to the down voters. I do not agree with the objection to universal healthcare! This is just an opinion I heard when congress was drafting the ACA.
Sadly the majority of america that is uninsured has universal emergency room healthcare. And that is the most expensive kind. We have probably 100 million Americans on this universal healthcare plan.
That claim is circulated about but I don't think it's true as an overall cost, but only as a cost-for-value. A few ER visits is cheaper than actually providing lifelong preventive care and chronic disease management before they die. O
If you don't have a high risks of dying for your condition at the ER, you don't cost money while you sit in the lobby.
What would reliance look like? People need a stable minimum amount to survive? Isn't that already the case for many? Isn't that the point of so many entitlement programs? Isn't that the reason for proposing UBI?
People adjust their spending/working patterns to account for the UBI - maybe they have a child they couldn't have afforded before, or take a long-term mortgage on a home.
Then the political winds change, a politician wants to show how tough they are, and of course we shouldn't be giving UBI to people in jail/drug dealers/anti-vaxxers/millionaire executives/people without photo ID/tax dodgers...
Basically, the same way the federal government can institute a national speed limit and a national drinking age, despite not having the power to do so directly, by making federal highway funds conditional on states having those limits.
> but the risk for people in power to use it against the people.
As opposed to what, private undemocratic unaccountable authoritarian institutions controlling peoples' lives?
> nce UBI exists, people will rely on it for survival.
Anybody who's dependent on their employers' paycheck is dependent on their employer for survival. How is dependence on the government any more dangerous than being dependent on a corporation?
We already have UBI, but only old people can qualify for it, and the dividend amount is proportional to how much money you made in your lifetime. It's called social security.
Extending this dividend to the rest of the population is the next logical extension of this.
Exactly. This is akin to the argument that we shouldn't further nationalize healthcare because "do you really want some government beaurocrat making healthcare decisions for you?"
Compared to the current system where some combination of the numbers in your bank account and am insurance company beaurocrat are making the decision? Yes.
Employers in the U.S. can fire anyone at any time for practically any reason, cutting off one's livelihood. That feels more likely than a government doing the equivalent of cutting off someone's social security. A company's goal is to maximize profits, not provide charity to people it no longer deems useful to its bottom line.
> Changing your employer is much simpler than changing your government.
Making changes at your place of employment is often impossible. We get direct chances to change our government every X years. And changing to a different employer often isn't that easy for many folks.
Changing your employment is individual and allows different offerings from different employers, matching the wants and needs of different people. Changing your government needs a majority consensus and at least some people will be in the minority who doesn't get what they want.
I don't think tying employment to healthcare is a good thing, but I don't think your argument gives a good reason, either.
Changing your employment is as simple as irritating your manager or missing some KPI, and getting fired in all these 'right to work' states. UBI would keep people who would otherwise live on the brink of utter chaos enough to sever their dependence on minimum wage slavery.
Your picture of people picking and choosing from enticing opportunities isn't remotely true for people at the bottom where this would help.
So fix your employment, minimum wage, etc. laws, too. UBI is a huge undertaking in terms of legal and social changes, we shouldn't consider it "either this change or no change".
Changing your government (at least in a democracy) is way easier than changing your employer, which are generally run with no input from employees (although some employee-run businesses do get to vote for their management).
> As opposed to what, private undemocratic unaccountable authoritarian institutions controlling peoples' lives?
Which is more authoritarian: 50%+1 of the people with the legal authority to imprison or kill you, or hundreds of competing firms bidding for your business or labour?
I can easily see a government abusing UBI, just like the U.S. federal government has abused highway funding e.g. to extort the states into raising the drinking age.
folks keep getting pulled into the false dichotomy of government vs corporation. the powerful and moneyed love this, as it obfuscates the real danger to liberty and freedom, which is themselves.
the truer, and more useful, dichotomy is the people vs unwieldy and overgrown institutions.
small institutions are great: your local government, your local bank, your local community center, etc. because the power disparity isn't so large that they can be kept in check and directed to do the will of the people.
large institutions, on the other hand, are irresistable to the power-hungry, and have no foolproof defense against corruption to their aims. they view people as resource to extract power from, not customers/constituents to serve.
UBI falls on the side of subjugating the people to the whims of government, reducing liberty and freedom, not extending it, as some like to argue.
(this is also why we should be against corporatism, and the favoring of capital over labor in general)
1. "private undemocratic unaccountable authoritarian institutions" are a lot of buzzwords, which don't accurately describe your local businesses. If every company was google, we could go there, but in the current reality, you're presenting a false dichotomy. The balance of power between people and their local institutions is wildly different than people and the federal government and megacorps.
2. A person can freely look for work at any time. They can upskill and seek more gainful employment, transfer into a better paying position in another company, or find employment that is more suitable to their immediate needs (part-time work for those studying as example.) You can't do that with government - unless you compete directly against the megacorps who use their power and influencer to affect elections and legislation.
Example: We got rid of net neutrality despite it being enormously popular. That's massively undemocratic and demonstrates that large institutions, government or not, don't always act in the best interests of the people.
3. Social Security is its own creature and requires a more thorough discussion. What I can say is based on my own experience - my family didn't benefit from Social Security. By the time my father was eligible for benefits, he was already on his death bed. Spousal benefits are "up to" half, meaning my father worked his entire life and my mother only got to benefit from half the 'savings.' If he had just put that money away like he did all his regular earnings my mother would be much better off.
I can't imagine my family was the only one in such a situation.
> My primary concern with UBI is not the concept itself, but the risk for people in power to use it against the people.
It's not a question of 'if' but 'when'. You can learn quite a bit from India's insane "reservation" policy where more than half of all opportunities (and in some cases > 80%) are 'allocated' to certain 'backward classes'. Never mind that these 'backward classes' dominate politics of the country, and are often quite rich (the 'creamy layer' in India is about $20k, in a country with per-capita GDP of 1/10 that).
The supposedly 'conspiratorial all-controlling' Brahmins are but scapegoats (like the Jews) in a propaganda story that only dates back to the British times (see Nicholas Dirks). It's depressing that the supposed 'liberal' Western media is creating a situation which very well might lead to widespread genocide and pogroms in India (this has happened before), like in Rwanda, Germany and elsewhere. The grand Hindu temples and all its wealth has already been looted by these supposed 'backward classes'; I wonder what else they'll come for next.
I've seen realistic figures for my country on UBI and from what I've seen UBI at a realistic level does not seem to be affordable. It's insanely expensive. Moreover, without massive changes elsewhere in society, UBI would decrease social mobility and lead to a two-class society that keeps the poor even poorer than now.
I'd rather see reasonable minimum wages, and higher taxes that are spent on universal health care, free education and social welfare in the usual Prioritarian way, though with very loose conditions on eligible recipients. Make it the least bureaucratic possible and the most friendly to side jobs and transitioning to self-sustenance as possible, and it will works optimally. The current systems in most countries are horrible, because they are designed to punish people who are creative and try to make money on the side - they are based on the stupid and outdated idea that you're either a successful entrepreneur, or an employee, or get social welfare. In reality, the system should allow anyone to transition between those three roles with ease, as it fits best in the current situation, and without being bogged down by existential sorrows all the time.
> Moreover, without massive changes elsewhere in society, UBI would decrease social mobility and lead to a two-class society that keeps the poor even poorer than now.
Could you elaborate on that a bit? How and why would it do that?
What's your opinion on Negative Income Tax?
> The current systems in most countries are horrible, because they are designed to punish people who are creative and try to make money on the side
Agreed. The number of people applying for some program while trying to hide some of their income would go down a lot if the eligibility and payout were gradual. Plus the truly heinous criminal cases would be still there to prosecute. (Eg. if someone sits on a pile of gold and lies about it on some application.)
> > Moreover, without massive changes elsewhere in society, UBI would decrease social mobility and lead to a two-class society that keeps the poor even poorer than now.
> Could you elaborate on that a bit? How and why would it do that?
Disclaimer: I'm not an expert on UBI myself and have merely been to a talk+discussion about it, so I'm happy to be convinced otherwise or hear opposing arguments.
I see two problems. First, a realistic UBI would be at an extremely low level, barely exceeding the existence minimum. However, it would diminish employer's willingness to treat people in unqualified low-wage jobs fairly and well (in small companies they do that a lot). They would fire and hire as they see fit, because someone fired supposedly could live easily off UBI. It seems to me that a consequence of this attitude is also that wages for those jobs would sink and some of these jobs might even degrade into unpaid "internships", based on the argument that people with UBI can take those jobs to have a purpose or for personal development, but don't need them to sustain their life. In reality many of them would still depend on those jobs, though, because UBI would be too low.
Second, UBI itself does not prevent massive capital accumulation and the continuously increasing divide between rich and poor, and it does not prevent the spreading of wealth by inheritance (as opposed to merits and work). There is no obvious reason (or at least I cannot see it) why UBI would change the current trend of increasing the gap.
Taking these two issues together, I don't see how UBI can solve society's main problem, which is this increasing gap between rich and poor and all problems that come with it regarding eduction, health care, political power distribution, social mobility, renters vs. land-owners, gentrification, etc.
I'm not an economist, but Negative Income Tax seems much better to me.
Neither am I an expert, so disclaimers all around :)
The problem of too low UBI seems the biggest practical one. And if we do it somehow needs-based, then it stop being universal, which is one of the supposed advantages - that it absolutely eliminates administrative costs/problems/etc. (But of course those are very fine straw men. Rationally none of those matter. Only that we somehow synthesize a long term (eg. sustainable) strategy to solve the problems that every kind of income/wealth redistribution aims to solve.)
Of course with that attitude we're quickly back to where we are now, needs based assistance programs. Plus a lot of recommendations on how to change them. One of them is that we should stop fucking around - to use the expert terminus technicus - and just give poor people money. Yes, they might even spend it on things that give them some pleasure on the very short term. They might even buy drugs. Not that they can't do that now with some extra steps. (Buy a-okay food with assistance program, sell it for cheaper, buy booze.)
And you are exactly right, the inequality is again completely independent of UBI. It depends on taxes, labor's share of income, etc.
UBI is a magical unicorn, it is assumed to provide everything good. Especially because it's so vague most of the time. (That's why talking about NIT is much easier, it's a rather concrete form of UBI.)
This is rare on the Internet nowadays, but I totally agree with everything you say. I often annoy economists by pointing out that due to the diminishing marginal utility of money any transfer of money from the rich to the poor increases overall utility. They don't like that at all. :)
Once UBI exists, people will rely on it for survival. It will be the single most influential campaign topic.
Worse, if UBI were to get 'Obamacared' then we'd end up with a massive battle over implementation, followed by a much worse system than the one we had prior (worst of all worlds with numerous 'compromises'), and then followed by a repeal and whatever subsequent chaos comes out of it.
I don't want to imagine what would happen to the folks who find themselves reliant on UBI if it were to go down that path.
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