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Thread: Universal Basic Income

  1. #1
    TJ TeresaJ's Avatar
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    Universal Basic Income

    I still don't know what to think about this. I feel like I would need a couple of advanced degrees in economics to really have an informed opinion. ...But it sounds good! Almost too good.

    Quick summary from this site.

    A basic income is a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement.

    That is, basic income has the following five characeristics:

    Periodic: it is paid at regular intervals (for example every month), not as a one-off grant.

    Cash payment: it is paid in an appropriate medium of exchange, allowing those who receive it to decide what they spend it on. It is not, therefore, paid either in kind (such as food or services) or in vouchers dedicated to a specific use.

    Individual: it is paid on an individual basisóand not, for instance, to households.

    Universal: it is paid to all, without means test.

    Unconditional: it is paid without a requirement to work or to demonstrate willingness-to-work.
    Several benefits:
    It provides a safety net while preserving competition (it's a floor, not a ceiling, to material wealth).
    It offers opportunities without being paternalistic, so it doesn't generate dependency.
    It decouples survival from submission to the job market. This is good for the economy (++entrepreneurship) as well as basic human decency.
    ...Oh yeah and it's possibly an answer to the economic techopalypse.


    I have a couple of concerns, right off the bat.

    1. Does cost effectiveness rely on phasing out existing social welfare? This could be a good thing or a bad thing, depending on how it's done.

    2. If the payment goes to each individual adult, what happens to households with many children?

    3. However, if the payment goes to each individual person, including minors, then that creates a perverse incentive to have more children. Like the horror stories you hear of foster parents who keep kids in cages just for the paycheck.

    4. ...Answering my own question... I think it would have to be per adult, but it wouldn't be able to replace all social programs.

    There's a lot of debate on this topic and I don't really feel qualified to judge it.

    http://www.scottsantens.com/basic-income-faq

    The exciting thing is that there are starting to be real experiments that should generate real data. If they actually get off the ground. Unfortunately, it seems that the Finnish experiment was gutted from the beginning.
    Too bad, Lady Une. You were far too lenient.
    As a soldier, yes. But as a civilian I lived an austere life.

  2. #2
    TJ TeresaJ's Avatar
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    The Barcelona experiment, similar to Finland, looks like it will target individuals already receiving social services.

    http://basicincome.org/news/2017/08/...ent-finalized/

    The design of B-MINCOME, which was first discussed in Basic Income News in February, has recently been finalized. It will be conducted in the BesÚs area, the city’s poorest region, and include 2000 households. These households will comprise a stratified random sample from BesÚs area households which have at least one member between ages 25 and 60 and which are current beneficiaries of the city’s Municipal Social Services. (Participation in the experiment is voluntary for the households selected, in contrast to Finland’s basic income experiment in which participation was made mandatory to avoid self-selection bias.)
    So it's not really a test of universal basic income... It's a test of replacing existing social services with cash.
    Too bad, Lady Une. You were far too lenient.
    As a soldier, yes. But as a civilian I lived an austere life.

  3. #3
    TJ TeresaJ's Avatar
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    Actually I see two major questions:

    1. Does UBI live up to its promises?

    2. If it does, how can we possibly implement it in a capitalist society, as it will undermine one of the basic tenants of our current iteration of capitalism, which is that the individual is beholden to the system.

    As I see capitalism primarily as an iteration of the age-old lust for power, even if UBI proves to be a more effective form of capitalism itself (in terms of economic growth), if it threatens the core basis of power then it seems that it must must must be annihilated.
    Too bad, Lady Une. You were far too lenient.
    As a soldier, yes. But as a civilian I lived an austere life.

  4. #4
    a fool on a journey pensive_pilgrim's Avatar
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    It seems like the big issue is where the money is supposed to come from. This would be a lot of money to distribute every month, especially if it's going to be anywhere close to enough for people to just live on. But that seems like it would require very heavy taxes. Who pays and why should they? I am sure a lot of the money would be spent well and would stimulate the economy and help with social problems. I'm also sure a lot would be wasted. I think a targeted approach is better, offering a safety net for people who need it and letting the free market handle the rest.

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    TJ TeresaJ's Avatar
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    Quote Originally Posted by pensive_pilgrim View Post
    It seems like the big issue is where the money is supposed to come from. This would be a lot of money to distribute every month, especially if it's going to be anywhere close to enough for people to just live on. But that seems like it would require very heavy taxes. Who pays and why should they? I am sure a lot of the money would be spent well and would stimulate the economy and help with social problems. I'm also sure a lot would be wasted. I think a targeted approach is better, offering a safety net for people who need it and letting the free market handle the rest.
    One argument for it being universal rather than targeted is that this way there's no incentive to stay "needy." The benefit is not dependent on being unemployed or making less than a certain income.

  6. #6
    a fool on a journey pensive_pilgrim's Avatar
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    Quote Originally Posted by TeresaJ View Post
    One argument for it being universal rather than targeted is that this way there's no incentive to stay "needy." The benefit is not dependent on being unemployed or making less than a certain income.
    I can see that, but depending on how you distribute the taxes necessary to pay for this, you could be disincentivizing other workers. Income redistribution on that scale would essentially be a planned economy, and we don't have a good track record with those, so I'm wary.

  7. #7
    Senior Member Mike's Avatar
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    Quote Originally Posted by pensive_pilgrim View Post
    It seems like the big issue is where the money is supposed to come from. This would be a lot of money to distribute every month, especially if it's going to be anywhere close to enough for people to just live on. But that seems like it would require very heavy taxes.
    A great promised advantage of UBI is that people wouldn't be stuck in a poverty/dependency trap with a big cost/disincentive (loss of benefits) to taking that low level entry job on the 1st rung of that potential ladder to self sufficiency. But yep the huge universal outlay factor seems to compel means testing. Maybe some type of graduated means tested UBI is the sweet spot.

    An advantage that appeals to some classical liberals is that people can spend the money (allocate their benefits/resources) as they see fit. Theoretically that should result in more efficient allocation by the recipients of the redistributed resources. It should also reduce administrative costs and the creation of more criminals; e.g. policing for food stamp fraud wouldn't be necessary.

    Who pays and why should they? I am sure a lot of the money would be spent well and would stimulate the economy and help with social problems. I'm also sure a lot would be wasted. I think a targeted approach is better, offering a safety net for people who need it and letting the free market handle the rest.
    I'm all for maximizing the proportion of the economy whereby people provide each other what they need and want via a free market. That targeted approach to property redistribution, just for targeted needs, such as food, housing and healthcare, should help to control the level of redistribution. However, it constrains the beneficiaries from using the redistributed resources in ways that meet their prioritized needs as they see them. The UBI approach frees beneficiaries of those constraints. Granted that overall it's not free market. There has been state redistribution of property. Nonetheless, it's more free market once in the hands of the beneficiaries.

    Just throwing around some thoughts. I also share your concerns, making me ambivalent about UBI at this point.
    Last edited by Mike; 08-12-2017 at 03:15 AM.

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    I think it's inevitable that something like this will need to become the norm soon. A lot of jobs are just there for the sake of having people working.

    It'll have to be a bigger social change. And this is what people have difficulty with. We're made to believe that working is good, not working is bad. A lot of people can't imagine themselves not having a full time job. They wouldn't know what to do with their free time. I think even unemployed people fall into this, which is a major reason for their depression: they don't know what to do with their time, so they pretty much do nothing (watch tv, maybe drink a bit, generally have a very non-meaningful existence). I think peoples' outlooks on life need to change, so that they are more independent and proactive in directing their own time, and finding meaningful ways (to them) to spend it.

    As it is at the moment, I think we possibly don't have the right mindset for people to happily have lots of free time and actually appreciate it. A lot may just fall into some kind of idleness depression, because it's a big shake up to what we all have been told.

    If that kind of shift in thinking can occur, then I think it could be massive. There is so much huge potential for people to direct their own learning these days, that if people could be pushed in that direction, I think there could be some great things which result.

    The money: I think it would work economically. I mean, effectively all the money is there already, I think. At least in countries with fairly adequate social welfare such as Australia (I think it's technically below the poverty line according to living costs in Australia, but... it's manageable). Money is already being paid to these unemployed people. You could... sort of... just lower the income to employed people, through taking more tax, and then basically just give it back to them and say "here's your universal basic income". Kind of a mental trick. Nothing really happened. Except now unemployed people don't get anything extra compared to employed people, so this will reduce mental stigma.

    Also the issue that people would then not choose to do the crappy low-level jobs. Maybe. But maybe not. Here, if you start earning money then your welfare amount will start to go down. Low level jobs would not be very far above current welfare rates. But if UBI is a right, then earning extra on top wouldn't affect it. I could see people possibly being more enthused about taking jobs like that, because there's no downside. Just extra cash. It may seem like less of a desperate measure.

  9. #9
    Senior Member jyng1's Avatar
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    Meh... we've had a universal basic income for decades. Anyone over the age of 65 gets it. A few people at work get it and it seems to work great.

  10. #10
    <3 gator's Avatar
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    I'm looking forward to the experiments as well. There was an experiment like this in the 70s in Manitoba, but there were some issues with the data, and a lot of the commentary since has been clouded by a lot of ideology. I hope the new studies don't fall into the same traps and help us reach useable conclusions.

    I think Mike's on the right track. In terms of how it gets paid for, the idea is that it's a redistribution of the social welfare spending that would have been spent anyway. Instead of providing specific subsidies and supports, people get more choice over how that money that would have been spent on them anyway will be spent.

    Dealing with the outcomes of poverty costs the welfare state a lot of money, in crime and policing, dealing with homelessness, in lack of educational attainment and behavioural issues at school, and with public health issues. In the Canadian context, especially, with a single-payer healthcare system, poverty is a huge burden, with people ending up in hospital due to being homeless, drug addicted, or with health issues that stem from poor diet or inactivity. So the appeal, in Canada at least, is in shifting some of that spending toward prevention, rather than acute treatment.

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