Fair enough, the universal basic income would not work in a number of countries that are either failed states on one side or authoratarian on the other, but much of civilization, including the developed world, falls in the zone where this program might work and is at least worth testing. I accept your premise that this can't work unless some minimum conditions are met.
Given that, do you toss the whole idea or do you think it could work in places like Kenya and the United States?
Yes, you make some sound points here for sure. What is your position on the concept of universal basic income, setting aside beta tests for now.
And what do you think it's viable, what would it take to make it viable. Maybe consider a few scenarios say how it might work (or not work) in different parts of the world, including both developing and developed.
I feel like universal basic income will only work in progressive societies that have gotten used to various social programs before. They might go bankrupt long before any of it's population actually receive money due to corruption.
In country's with high poverty level where people don't possess the minimal quality of life, I highly doubt the spirit of basic income will even be recognized but seen more of a cash grab where you'd be considered stupid for not taking advantage of. Such is the effect of poverty-removes the ability to seek long term societal gains for short term selfish gain at the cost of rest of society.
There may be cultural differences but they all boil down to economics of that specific region and country. My feeling is that a basic quality of life and the infrastructure to support it must be present for universal basic income to work. It's just too easy to cheat when so many of your peers will undoubtedly do it at your expense. It's expensive to cheat when none of your peer are willing to do it due to social stigma and shame.
And that's valuable, sure. My point is more a question of if it's truly a "Universal Basic Income" experiment, it should be done so that it's paid for by the taxpayers of that same system. My suspicion is that such a program would dissolve fairly quickly because the tax burden falls squarely on people who have worked the hardest to pay their own bills and to provide for their own family. If they suddenly have to lower their quality of life, or their kids' quality of life to pay for someone who they perceive as not working very hard, then the system gets difficult.
It's much simpler to make money appear out of thin air (as it effectively is when you take millions of dollars from rich folks in California) and distribute it in Africa. But if you have to take money some folks' pockets in Africa to give to their neighbors, that to me is a more 1-to-1 comparison at what happens for a UBI.
That might work. I'd like to see how it goes in practice.
Whenever I hear of basic income, it always takes me back to communism. The main difference is that communism wouldn't let you have more than others (people found ways around that anyway).
Of course Basic Universal Income works in experiments. You select a group of people and give them money for some time. To be honest, it’s no longer basic nor universal. It’s just income.
Universal Basic Income has NEVER been tried. i.e Giving every citizen of a relatively large country (> 10 million) a fixed sum of money every month.
It works on small samples because that doesn't suddenly change the demand curve relatively to supply.
Everytime the govt prints money and gives it as a stimulus check, that is akin to UBI.
The problem is usually supply. One can always pump up demand by dolling out free money. Even if you gave every US citizen a million dollars but the housing inventory doesn't go up, house prices go up by a million dollars.
Money is merely a means fill demand with supply.
Universal basic distribution is a phenomenal idea. e.g everyone receives free basic healthcare (Most modern countries do this).
Capitalistic competition is a good thing when there are multiple players working hard to output the highest quality at cheapest prices.
Governments as single player monopolies aren't the most efficient at distribution.
Universal Basic Supply is an idea I can get behind. UBI has a big gaping hole called inflation.
One thing to note about these experiments is that they tend to paper over or ignore both the Universal and the Basic parts of Universal Basic Income. (Those are the hard parts.) They end up just experiments to see what happens if you give some people a little money. In this case, what if 6,000 out of 45,000,000 people get $1 per day (which is about 1/9th the GDP PPP per capita) for a limited time.
I don't know about the cost of living or employment situation in Kenya, but by GDP PPP per capita, that calculates to about the equivalent of $17.42/day in the U.S, or $522/month ($6,264/year). That's way below poverty level, and not likely to cover housing, utilities, food, and healthcare anywhere in the U.S. Of course, that would be helpful to anyone with low income, but it is not a basic income. The situation may be different in Kenya, but by the math it doesn't sound promising.
If it only affects 1/100 of 1% of the population, there is no way to observe the societal effects of a universal income. That's a long way from universal. Also, because it is an experiment rather than a social contract, there is no way to observe what people will do if they have it as a safety net, because they can't rely on it. To be fair, if it is going to run for 10 years, that's something, but still not representative of lifetime security.
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Regarding the comments about poor people buying TVs and cellphones, etc. - there are many reasons for this, but it really is utility and value. These people aren't stupid. The economy works completely differently when you are poor. Thinking that they should invest their $300 tax refund in a diversified stock portfolio is nonsense. With fees of $10/transaction, they would lose 1/3rd of their money just buying into 10 cheap stocks, and an equivalent amount selling it. They would need > 100% return just to break even.
Likewise, money in the bank is a liability. It detracts from foodstamp allowances etc. But they don't send people around to appraise your TV when they're calculating your foodstamps. And in a pinch, you have things that you can trade, sell, or pawn. If you leave the money in the bank, it will be lost to bills, bank fees, etc. And sure, you could have caviar and shrimp instead of ramen and rice cakes, but it'd be gone as soon as the meal is done. A stereo will still be there tomorrow.
Generally speaking, if you are working poor, trying to save up to improve your position costs you and you lose. Buying things saves you money, maintains the status quo, gets you things which you can sell in an emergency, and makes your life better until then. Consider states of matter - solid, liquid, gas. Things work quite differently depending on the state of matter. Likewise, the economy works quite differently if you are lower class, middle class, or upper class.
Telling someone poor that they should spend their money more wisely is often like telling someone trapped in ice that they should just swim up to the surface. In the latter case, physics just doesn't work that way. In the former case, economics just doesn't work that way.
Do you know how much money the government allocates? I think there is no evidence for the thesis and massive amounts of evidence against it. The concept of a failed state is one where the government has failed leaving the population to allocate their money as they see fit. Generally they don’t work out too well.
I’m not saying basic income doesn’t work, I’m just saying this isn’t the reason it might work.
Well, that's where universal basic income has some validity.
It's a very nice idea.
It does have the potential to create localized unimpressedness though; the question is how powerful the temporarily-put-out groups would be, and whether the backlash would remove your power as well.
First let me say that I am not trying to defend universal basic income schemes, I think they are not a great idea. With that out of the way, the point you are mentioning is a fundamental problem of universal basic income schemes. You can not promise to provide goods and services for basic needs to everyone unconditionally unless you have some magic black box providing the required goods and services.
You can try to tweak the incentive structure here and there to make it unlikely that you will end up in the worst case scenario but you can not really get rid of it. Unless you advance technology and automation to the point where you can provide for basic needs without any labor at all, a universal basic income scheme is a promise you can not keep unconditionally.
Just a brainstorm, not even sure if this is a great idea:
Perhaps a good thing to do with a universal basic income is tell people they can collect it from anywhere. This is what people do with social security and such. They go live in cheap countries where they can get dental and medical work done for 1/10th the price. Cheap food, cheap rent, etc. The lowered demand for these things in the US would lower prices here. Everybody wins!
I am not an unconditional advocate for Basic Income but I think that the idea is intriguing and could potentially be very efficient. I am not going to argue about what BI could or could not do but I would really like to see more experiments with it to have some tangible information. I would rather see that it fails than hope that it would work. Of course, I'll be delighted to see it work.
If an "unconditional basic income" is ever to be successful, it should be tried first in a small, wealthy country, before being implemented in bigger countries. Good candidates might be Switzerland, Norway, Iceland and so on.
Big experiments have a tendency to fail catastrophically...
So basic income might work given current levels of employment and GDP et cetera, but it might not work in other cases. And what might happen in those other cases is really bad: unlimited liability. Got it. But why should that be the end of the conversation? Sounds more like a challenge that might have an answer or it might not. Saying "it can't work" doesn't really help.
That's far too simplistic and cannot be taken seriously.
One of the first serious issues you'd have to consider is migration from other countries to your model country with basic income. There's billions of people out there who'd happily live on basic income in some first world country and I'd absolutely encourage them to do so, given what the first world's riches are built on (but I digress...).
You actually raise a good point about testing it. If you have heard of the Sea Steading Institute they are proposing that we establish a bunch of "startup" style countries to examine which policies and solutions will work and which won't. The problem with basic income though is that it relies on captive individuals (value producers who pay tax) and given the choice they are most likely going to move to somewhere that doesn't force them to pay as much tax. I can't see how socialism can survive without forcing people against their will.
Given that, do you toss the whole idea or do you think it could work in places like Kenya and the United States?
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