A basic income experiment in Kenya(nordic.businessinsider.com)
nordic.businessinsider.com
A basic income experiment in Kenya
http://nordic.businessinsider.com/kenya-village-disproving-biggest-myth-about-basic-income-2017-12
147 comments
Other research has found that people's spending on alcohol and cigarettes actually went down when they received direct cash transfers. Faced with a brighter future, many people stop using temptation goods as a way to cope with a hopeless situation, researchers have discovered. In the village GiveDirectly is working with, interviews with nearly a dozen recipients showed that most people have actually worked more since the study began.
Well, this is encouraging.
I am not pro basic income because I think it won't fix anything in the US without other changes first, such as universal basic healthcare and more affordable housing, and most discussions about basic income start from an assumption that it will be handled at the national level. I think the current focus on basic income actively takes attention away from things like healthcare and housing. We already don't want to fix those things because they are hard problems to solve. Focusing on basic income strikes me as a variation on how so many people fantasize about winning the lottery. It seems like an easy answer. And people would rather imagine that there is an easy answer than wrestle with hard problems.
Like others are saying, I am unconvinced that this experiment really proves anything about basic income. But I think this may be the first time I have heard of a basic income experiment where the money came from elsewhere.
Maybe this approach does not further basic income. Maybe it will only provide new models for charity. Or maybe it provides a different model for basic income, one that puts a floor in globally and potentially starts the process of moving towards a world government, which doesn't have to be in place of national governments. It can be another layer on top of them. So emergent global order makes more sense than a top down approach to creating it.
One of the issues with basic income is the questions surrounding how it impacts immigration. If you give all Americans $1000/mo, that makes citizenship here an even more valuable commodity.
But if basic income starts as a global initiative to begin closing the gap between rich and poor nations, instead of a local initiative to help the poor within rich nations, maybe basic income can start resolving some of the problems currently fueling immigration pressures and bring barriers down to a more manageable level.
Well, this is encouraging.
I am not pro basic income because I think it won't fix anything in the US without other changes first, such as universal basic healthcare and more affordable housing, and most discussions about basic income start from an assumption that it will be handled at the national level. I think the current focus on basic income actively takes attention away from things like healthcare and housing. We already don't want to fix those things because they are hard problems to solve. Focusing on basic income strikes me as a variation on how so many people fantasize about winning the lottery. It seems like an easy answer. And people would rather imagine that there is an easy answer than wrestle with hard problems.
Like others are saying, I am unconvinced that this experiment really proves anything about basic income. But I think this may be the first time I have heard of a basic income experiment where the money came from elsewhere.
Maybe this approach does not further basic income. Maybe it will only provide new models for charity. Or maybe it provides a different model for basic income, one that puts a floor in globally and potentially starts the process of moving towards a world government, which doesn't have to be in place of national governments. It can be another layer on top of them. So emergent global order makes more sense than a top down approach to creating it.
One of the issues with basic income is the questions surrounding how it impacts immigration. If you give all Americans $1000/mo, that makes citizenship here an even more valuable commodity.
But if basic income starts as a global initiative to begin closing the gap between rich and poor nations, instead of a local initiative to help the poor within rich nations, maybe basic income can start resolving some of the problems currently fueling immigration pressures and bring barriers down to a more manageable level.
I’m dubious about basic income because, having done the math on how much it would cost, there are certainly better ways to spend that much money.
If we give every American $1,000/mo basic income, that’s $12,000/yr times 300 million, or about 1.2 trillion per year. For that much money, we could fix all our infrastructure, build better subways in every American city, build a Loftstrom-style launch loop to keep space launch costs down, land on Mars, replace the entire military arsenal, invest billions into basic science, expand health coverage, and still have some money left over. Plus, building all of that shit will probably get the country to full employment, give people meaningful things to do with their lives, and we get a lot out of it.
Or we could just mail people checks so they can sit around at home playing video games.
If we give every American $1,000/mo basic income, that’s $12,000/yr times 300 million, or about 1.2 trillion per year. For that much money, we could fix all our infrastructure, build better subways in every American city, build a Loftstrom-style launch loop to keep space launch costs down, land on Mars, replace the entire military arsenal, invest billions into basic science, expand health coverage, and still have some money left over. Plus, building all of that shit will probably get the country to full employment, give people meaningful things to do with their lives, and we get a lot out of it.
Or we could just mail people checks so they can sit around at home playing video games.
I don't think actual universal basic income is ever going to happen, in part because of the cost. The reality is that most people envision it as a replacement for welfare, not genuinely a check for everyone, including Bill Gates and other ultra rich citizens.
I think the biggest problem is that it amounts to squandering wealth, not creating more. It envisions most ordinary people as mere consumers. It's a little like saying "Our body would be healthier if we made sure to adequately feed the leeches."
Yeah, no.
We need to not actively turn people into leeches. We need to stop treating them like they can't do anything but consume. It is a terrible way to treat people and it creates a very unhealthy and unsustainable system.
I think the biggest problem is that it amounts to squandering wealth, not creating more. It envisions most ordinary people as mere consumers. It's a little like saying "Our body would be healthier if we made sure to adequately feed the leeches."
Yeah, no.
We need to not actively turn people into leeches. We need to stop treating them like they can't do anything but consume. It is a terrible way to treat people and it creates a very unhealthy and unsustainable system.
> It envisions most ordinary people as mere consumers. It's a little like saying "Our body would be healthier if we made sure to adequately feed the leeches."
> Yeah, no.
> We need to not actively turn people into leeches. We need to stop treating them like they can't do anything but consume. It is a terrible way to treat people and it creates a very unhealthy and unsustainable system.
What the heck are you talking about... If it's universal, then everybody gets it. How can anyone be a leech? And if you think some people consume more than they produce it's the same problem as with any other welfare. I don't see a problem with UBI being a replacement for welfare to some extent. Giving people dedicated restricted help is like treating them like incapable of decision making. Give them money and let them buy food themselves. What's the difference between a food stamp and food money? Pardon my ignorance.
Regarding creating new leeches, about every experiment with this shows that on average by great margin it activises people. So this in practice shows the exact opposite of what you say. People usually feel empowered and regained control over their lives and try to do something with it.
I am not a real proponent of universal basic income, the results seem too good. Maybe not being used to, and suddenly being given cold cash under monitor has this effect. Nevertheless, in my opinion your logic is completely reversed to what is being published.
> Yeah, no.
> We need to not actively turn people into leeches. We need to stop treating them like they can't do anything but consume. It is a terrible way to treat people and it creates a very unhealthy and unsustainable system.
What the heck are you talking about... If it's universal, then everybody gets it. How can anyone be a leech? And if you think some people consume more than they produce it's the same problem as with any other welfare. I don't see a problem with UBI being a replacement for welfare to some extent. Giving people dedicated restricted help is like treating them like incapable of decision making. Give them money and let them buy food themselves. What's the difference between a food stamp and food money? Pardon my ignorance.
Regarding creating new leeches, about every experiment with this shows that on average by great margin it activises people. So this in practice shows the exact opposite of what you say. People usually feel empowered and regained control over their lives and try to do something with it.
I am not a real proponent of universal basic income, the results seem too good. Maybe not being used to, and suddenly being given cold cash under monitor has this effect. Nevertheless, in my opinion your logic is completely reversed to what is being published.
Your math is wrong, such a program would cost $3.6 trillion per year
Even furthering my point! An entire Mars program could be done for a tenth of that!
That's not really the cost.
The cost is $12,000 * 300 million minus income taxes raised. Most plans have a slight increase in personal income tax attached, that leads to a breakeven at around $36K -> $40K.
And the comparative cost in the budget is the cost of the program minus all existing welfare programs this replaces. $1,145 billion was the guesstimate for welfare, so for the USA at $3.5 trillion, it would be a cost of $2 trillion.
I wonder too if there aren't more cuts than just welfare that can be made as a flow on of this. The proposal I saw from a conservative economist was $13K, with $3k reserved for healthcare. That would replace a lot of the medical schemes that exist, which many states likely pay for as well.
Still, it is gonna be hella expensive for the first country that does it at scale.
The cost is $12,000 * 300 million minus income taxes raised. Most plans have a slight increase in personal income tax attached, that leads to a breakeven at around $36K -> $40K.
And the comparative cost in the budget is the cost of the program minus all existing welfare programs this replaces. $1,145 billion was the guesstimate for welfare, so for the USA at $3.5 trillion, it would be a cost of $2 trillion.
I wonder too if there aren't more cuts than just welfare that can be made as a flow on of this. The proposal I saw from a conservative economist was $13K, with $3k reserved for healthcare. That would replace a lot of the medical schemes that exist, which many states likely pay for as well.
Still, it is gonna be hella expensive for the first country that does it at scale.
You could raise income taxes regardless, though. And I don’t know how much welfare you would be able to eliminate, since the bulk of those costs are Medicare (which you would have to maintain) and Social Security (which you would also have to maintain but might offset UBI).
Regardless, you’re still introducing a large amount of net new spending—an amount that could be productively invested in infrastructure, research, and other productive projects.
Regardless, you’re still introducing a large amount of net new spending—an amount that could be productively invested in infrastructure, research, and other productive projects.
You're just looking at numbers--that's a mistake. The real "cost" is in the unmeasurable factors of how such a policy would change social behavior. For example, if I'm guaranteed $1K/month, I could take that and, using the other passive income I have, quit my job and never work again.
I'm 44, it would be a dream come true. Part of me says "bring it on" but the adult part of me realizes that you can't run a nation where everyone wants to retire early and produce nothing or next to nothing. I reminds me of Firefly and planet Miranda where everyone was drugged for "their own good" but they all just laid down and died!
I'm 44, it would be a dream come true. Part of me says "bring it on" but the adult part of me realizes that you can't run a nation where everyone wants to retire early and produce nothing or next to nothing. I reminds me of Firefly and planet Miranda where everyone was drugged for "their own good" but they all just laid down and died!
I wonder if it would make sense to count things like healthcare and education as income. For instance, there are people who think my healthcare benefit should be taxed, and others who want the tuition waiver for graduate students to be taxed. So they are "income" when it's of interest to do so.
In this sense, we provide a lot of "basic income" to people, such as public education, police presence, various kinds of physical infrastructure, etc. The quality of those services could certainly be debated. My own "take" on basic income would be to bolster those services, perhaps even to a radical extent, but to consider that they are still not a complete substitute for each person having some discretionary income.
In this sense, we provide a lot of "basic income" to people, such as public education, police presence, various kinds of physical infrastructure, etc. The quality of those services could certainly be debated. My own "take" on basic income would be to bolster those services, perhaps even to a radical extent, but to consider that they are still not a complete substitute for each person having some discretionary income.
The main reason the U.S. health care system is broken is that your employer-provided health care is not taxed, but household health care spending is first taxed as income. So everybody is jammed into their employer-provided care and you're hammered if you're outside that system and have to buy health care on your own. Obama tried to start to tax lavish employer plans, which was a sensible reform. Alternatively you could just let all Americans deduct their health care insurance. The current system causes distortions and is profoundly unfair to self-employed.
A predictable emergent behavior of basic income would be to fix housing by itself. $1000/month is not enough to live in many cities, but it's more than enough to live very comfortably in less developed areas. That opens up some really cool entrepreneurial ideas on a lot of levels. For instance if you can get together a team interested in working on a startup, then that team could sustain itself indefinitely if they will willing to locate to a more rural area. This, in turn, would also help develop the economies of these areas with the startups that succeed.
There are even some big scale ideas here. Get just 10,000 people together and that income is $10million/month. If these people were willing to contribute and work together, they could actually begin to build their own new areas from the ground up given nothing more than basic land. Ideally I think the perfect value for a basic income would be enough to provide the bare essentials of housing and sustenance in the areas of the US with lower living expenses.
The one condition of basic income would need to be citizenship by birth to two parents who were also citizens of birth. If somebody immigrates to the nation, their grandchildren can participate in the program. This removes any incentive for social program targeted migration, or to try to give birth just within the borders. Furthermore, basic income would enable us to remove many current social programs, which provide such incentives to a lesser degree, as they would become redundant.
There are even some big scale ideas here. Get just 10,000 people together and that income is $10million/month. If these people were willing to contribute and work together, they could actually begin to build their own new areas from the ground up given nothing more than basic land. Ideally I think the perfect value for a basic income would be enough to provide the bare essentials of housing and sustenance in the areas of the US with lower living expenses.
The one condition of basic income would need to be citizenship by birth to two parents who were also citizens of birth. If somebody immigrates to the nation, their grandchildren can participate in the program. This removes any incentive for social program targeted migration, or to try to give birth just within the borders. Furthermore, basic income would enable us to remove many current social programs, which provide such incentives to a lesser degree, as they would become redundant.
Given the number of articles I have read about homeless people with benefits who could afford to get back into housing if they would just move elsewhere, but they won't because they want to remain in the city they have long lived in, I don't think this is a given. It is actually an option currently for some people. Most don't seem to pursue it. And lots of start-ups feel they can't succeed if they leave the startup ecosystem in Silicon Valley.
> more affordable housing
The US is an incredibly cheap place to live. Go to Europe and see what you can get for the same money.
The US is an incredibly cheap place to live. Go to Europe and see what you can get for the same money.
A lot of European countries have free health care provided by the government. It is an apples to oranges comparison in many ways.
> The US is an incredibly cheap place to live.
From what I hear - I've never been there - this remains true only as long as you're not ill, don't need education and are employed. In most EU countries these things are taken care of for you, so the comparison seems a bit unfair.
From what I hear - I've never been there - this remains true only as long as you're not ill, don't need education and are employed. In most EU countries these things are taken care of for you, so the comparison seems a bit unfair.
given the highlighted phrase of the parent I believe he was talking about "live" as in housing, not general expenses.
Ok, I didn't catch that - read and answered the post too quickly - thanks for pointing it out, it makes sense :)
I don't think many Americans consider how lucky we are that we have practically unlimited land compared to many industrialized nations. In Germany housing is very expensive. Homes are often passed down generations and parents move back in with their kids during retirement much more often than in the US.
It wasn't luck, it is the result of prudent national planning (Louisiana Purchase, Alaska Purchase), quasi-conquest (Texas Independence and Florida Purchase) and outright conquest (Mexican-American War, Indian Wars).
Interesting to hear results in the field.
My question is how does that transfer to other environments? Do the results at $22 a month in Kenya translate to the results at $1000 a month in the US? There's a lot more interesting things to buy with a $1000 in New York than there is with $22 in a village in Kenya. It's also a different society, different people. Maybe more religious, etc.
Just throwing out a stupid idea: Kenya's population is 47 million. To give all of them $22 a month (ignoring age cutoffs), unless I'm doing the math wrong would be just under $13 billion a year. If some really wealthy people really want to test this, it's not impossible.
Unlike the article's repeated claim that this is the "greatest myth" (it's really annoying how news articles editorialize with untestable statements like that), the biggest issue is still cost. How do you realistically put together and pay for a program that can become policy in the US? It's the 3 trillion dollar question.
My question is how does that transfer to other environments? Do the results at $22 a month in Kenya translate to the results at $1000 a month in the US? There's a lot more interesting things to buy with a $1000 in New York than there is with $22 in a village in Kenya. It's also a different society, different people. Maybe more religious, etc.
Just throwing out a stupid idea: Kenya's population is 47 million. To give all of them $22 a month (ignoring age cutoffs), unless I'm doing the math wrong would be just under $13 billion a year. If some really wealthy people really want to test this, it's not impossible.
Unlike the article's repeated claim that this is the "greatest myth" (it's really annoying how news articles editorialize with untestable statements like that), the biggest issue is still cost. How do you realistically put together and pay for a program that can become policy in the US? It's the 3 trillion dollar question.
Interesting "stupid" idea there. Is there enough incentive on either side for a small nation to offer its entire population to scientific research for a large one that cannot afford the failure of a similar experiment on itself?
It'd be fair to assume that a successful experiment would eventually become self-funding and discontinued if unsuccessful. Your $13B number puts the budget in the same ballpark as ITER; smaller than half of the foreign aid donated by the US in 2013, an order of magnitude smaller than Project Apollo, and less than 10% the size of the Marshall plan.
However such a project will not be able to avoid wide publicity which would attract many "confounding factors" trying to ensure its success, or more likely its failure.
It'd be fair to assume that a successful experiment would eventually become self-funding and discontinued if unsuccessful. Your $13B number puts the budget in the same ballpark as ITER; smaller than half of the foreign aid donated by the US in 2013, an order of magnitude smaller than Project Apollo, and less than 10% the size of the Marshall plan.
However such a project will not be able to avoid wide publicity which would attract many "confounding factors" trying to ensure its success, or more likely its failure.
Interesting observation. One thing that people who are fans of donor-funded BI don't realize is that there are reasons for the minimal standards of living required to sustain a $22 a month budget.
a) Donor funding causes poorer members of society to turn a blind eye to inept leadership who misappropriate taxes and who don't really care about effecting sustainable change. The fact that they can live on $22 a month doesn't change the fact that their village has shitty schools, shitty hospitals, and non-existent public infrastructure... and the Kenyans responsible for fixing that get richer by the day.
b) Efforts by East African countries to build sustainable industries are curtailed by the same economies that purport to support them. Kenya had to back out of a plan to prevent the importation of second-hand clothing (https://www.nytimes.com/2017/10/12/world/africa/east-africa-...) because the States threatened to review Kenya’s eligibility to export textiles to the US.
I think it's nice that 3rd parties are so keen on being helpful... but I think that change will have to come from within.
a) Donor funding causes poorer members of society to turn a blind eye to inept leadership who misappropriate taxes and who don't really care about effecting sustainable change. The fact that they can live on $22 a month doesn't change the fact that their village has shitty schools, shitty hospitals, and non-existent public infrastructure... and the Kenyans responsible for fixing that get richer by the day.
b) Efforts by East African countries to build sustainable industries are curtailed by the same economies that purport to support them. Kenya had to back out of a plan to prevent the importation of second-hand clothing (https://www.nytimes.com/2017/10/12/world/africa/east-africa-...) because the States threatened to review Kenya’s eligibility to export textiles to the US.
I think it's nice that 3rd parties are so keen on being helpful... but I think that change will have to come from within.
Drawing any conclusions only 1 year into a 12 year experiment seems too much, too soon. It also doesn't seem like it is enough money to really do the experiment if the $22/month could only pay for one child's pre-school.
The one hopeful thing I read was that it seemed to reduce alcohol usage. This matches with most evidence of alcohol usage increasing during a recession, etc. When things are hopeless, people cope how they can.
This does help reinforce the concept that most people need a hand up, not a hand out. We get so little benefit from too many of our social programs today. We need to fix things to allow people to help themselves and grow to become self sufficient.
The one hopeful thing I read was that it seemed to reduce alcohol usage. This matches with most evidence of alcohol usage increasing during a recession, etc. When things are hopeless, people cope how they can.
This does help reinforce the concept that most people need a hand up, not a hand out. We get so little benefit from too many of our social programs today. We need to fix things to allow people to help themselves and grow to become self sufficient.
Alright, I'll bite, can you give evidence of your second to last sentence? People toss around this logic as if it is an accepted truth without any real evidence of it.
I'll elaborate slightly. Mainly there are stupid things like you can't be eligible for certain programs if you have money > X in the bank. How are people supposed to save to get on their feet again if doing so loses their help?
We do an okay job of trying to funnel money to the people and necessities but we focus too little on job training and development. I would love for us to bring community projects back into the fold. Learn construction and landscaping while fixing up a park. Let people refurbish old buildings to create low income housing while learning the "trades". Use all the intelligence and energy of people to create after/before school programs and tutoring.
We do an okay job of trying to funnel money to the people and necessities but we focus too little on job training and development. I would love for us to bring community projects back into the fold. Learn construction and landscaping while fixing up a park. Let people refurbish old buildings to create low income housing while learning the "trades". Use all the intelligence and energy of people to create after/before school programs and tutoring.
Definitely too early to draw conclusions.
Preschool the US is pretty expensive, about $500 a month. It would seem if you could pay for preschool with $22 a month, then the purchasing power is quite substantial.
I believe that this is not a replacement for existing income streams but a supplement that puts these recipients above subsistence.
This is very much a handout however.
Preschool the US is pretty expensive, about $500 a month. It would seem if you could pay for preschool with $22 a month, then the purchasing power is quite substantial.
I believe that this is not a replacement for existing income streams but a supplement that puts these recipients above subsistence.
This is very much a handout however.
$500! I live in suburban Atlanta and it is $1000 per month per kid for any NAEYc certificated preschool. It 20-30% more expensive inside the perimeter
Very heart warming article, glad to hear about empirical evidence that basic income leads to fruitful, productive lives.
Personally, I believe that basic income would be a net good if 99% of basic income recipients wasted money on booze, as long as there’s a 1% doing interesting things with their lives.
Personally, I believe that basic income would be a net good if 99% of basic income recipients wasted money on booze, as long as there’s a 1% doing interesting things with their lives.
To evaluate that I'd look at the effect on the kids of the 99%. If it enables their parents to drink a bunch more than they would have otherwise, it might not be a net positive, even including the 1% who use the money wisely.
I'm slightly suspicious of the self-reported drinking levels. I'd be afraid that the aid recipients might fear having the money taken away from them (no matter how much they're assured otherwise) if they report their true amounts of drinking or other behavior they assume the study organizers don't approve of. Do surveys of people who drink typically reveal true results, when further investigation is done?
The incentives here are so painfully slanted. Is there a B Team investigating this adversarially? Ideally this study would be done by researchers who aren't true believers in basic income. If it really works, it works when those carrying it out don't believe in it.
Especially considering that if this does get implemented globally, a big percent of those running the show will be bored bureaucrats, not people passionate about the fate of the impoverished.
I'm slightly suspicious of the self-reported drinking levels. I'd be afraid that the aid recipients might fear having the money taken away from them (no matter how much they're assured otherwise) if they report their true amounts of drinking or other behavior they assume the study organizers don't approve of. Do surveys of people who drink typically reveal true results, when further investigation is done?
The incentives here are so painfully slanted. Is there a B Team investigating this adversarially? Ideally this study would be done by researchers who aren't true believers in basic income. If it really works, it works when those carrying it out don't believe in it.
Especially considering that if this does get implemented globally, a big percent of those running the show will be bored bureaucrats, not people passionate about the fate of the impoverished.
Why would having more money make people drink more?
People drink because it's the cheapest entertainment. When people have more money they try out other forms of entertainment.
People drink because it's the cheapest entertainment. When people have more money they try out other forms of entertainment.
Empirically, wealthy Americans drink more than poor ones. http://news.gallup.com/poll/184358/drinking-highest-among-ed...
The page you link says that they drink more often, not necessarily more.
I imagine rich people use alcohol to spice up other entertainment and poor people more often entertain themselves with alcohol only.
I imagine rich people use alcohol to spice up other entertainment and poor people more often entertain themselves with alcohol only.
You may be right about the use of alcohol as a sole source of entertainment. But the evidence shows that rich people (this source is the UK) drink more, not just more often: http://www.ias.org.uk/Alcohol-knowledge-centre/Socioeconomic...
These are the top Google results for "alcohol consumption by income level", by the way. There's no need to speculate about it without sources as people in this thread are doing.
These are the top Google results for "alcohol consumption by income level", by the way. There's no need to speculate about it without sources as people in this thread are doing.
> If it enables their parents to drink a bunch more than they would have otherwise
So just add to the "basic income" scheme a "basic mental health" package, and where are good to go.
So just add to the "basic income" scheme a "basic mental health" package, and where are good to go.
And you've just taken the first step towards where we are now. There will of course need to be a "basic physical health" package, and a "basic financial health" package, and a "basic housing package"... The whole idea of UBI is to get rid of everything else and expect people to take care of themselves.
Personally, I don't see how UBI scales beyond small tests to whole countries/economies.
Personally, I don't see how UBI scales beyond small tests to whole countries/economies.
It won't, because the only way UBI can work is to completely redo a countries spending as well as its taxing. A negative income tax/UBI where, say, outreach programs for the homeless are paid for won't work. Maybe even things like public housing. Further afield, even if we can conservatively say it would cost the USA a trillion dollars, that's an amount that seems implausibly high to get through.
I do wonder though if it would be possible to fund with a combination of a sell off of public land plus technology. Theoretically, with a UBI, there would be little to no need for the government to provide subsidized housing, and a technological solution where money could be sent directly to landlords rather than via recipients would provide the sort of risk reduction that many landlords need. That could lead to a boom in sub $1,000 a month rentals, where landlords are guaranteed they will be paid.
Combine with a sell off of some public housing assets, and it might be possible to fund a UBI for several years, not so much to push the can down the line, but to see if the trillion dollars is recouped with economic growth as the entire amount would be spent by all recipients up to and slightly above the median US income, so there should be some positive economic growth.
That's the rub though, this is hard to pass. The left in particular won't like the replacement of programs for direct cash and a public assets sell off is kind of the left's idea of heresy. Conversely, the right won't let it through without MASSIVELY reducing the number of programs that are currently funded. There is virtually no country in the world with a sane and rational enough parliament to be able to perform the sort of radical surgery their budgets need to introduce a UBI.
I do wonder though if it would be possible to fund with a combination of a sell off of public land plus technology. Theoretically, with a UBI, there would be little to no need for the government to provide subsidized housing, and a technological solution where money could be sent directly to landlords rather than via recipients would provide the sort of risk reduction that many landlords need. That could lead to a boom in sub $1,000 a month rentals, where landlords are guaranteed they will be paid.
Combine with a sell off of some public housing assets, and it might be possible to fund a UBI for several years, not so much to push the can down the line, but to see if the trillion dollars is recouped with economic growth as the entire amount would be spent by all recipients up to and slightly above the median US income, so there should be some positive economic growth.
That's the rub though, this is hard to pass. The left in particular won't like the replacement of programs for direct cash and a public assets sell off is kind of the left's idea of heresy. Conversely, the right won't let it through without MASSIVELY reducing the number of programs that are currently funded. There is virtually no country in the world with a sane and rational enough parliament to be able to perform the sort of radical surgery their budgets need to introduce a UBI.
And that’s why there’s no hope for an actual basic income actually working.
Before I pass judgement, I would want to see what happened to the CPI price after basic income.
The article says that one recipient was able to buy more milk and send his kid to school. Fine, how much does milk cost now and which kid is now unable to go to school because his son is sitting in the seat?
You can have as much money as the government wants, but goods are a limited resource (in the short term). Just printing money to give people more money is not a solution.
Venezuela just hiked minimum wage up to 797,510 BSF a month. That's 79,751 dollars at the official exchange rate (which is 10 to 1). On the black market it's about 6.50. And nothing is available on shelves.
The article says that one recipient was able to buy more milk and send his kid to school. Fine, how much does milk cost now and which kid is now unable to go to school because his son is sitting in the seat?
You can have as much money as the government wants, but goods are a limited resource (in the short term). Just printing money to give people more money is not a solution.
Venezuela just hiked minimum wage up to 797,510 BSF a month. That's 79,751 dollars at the official exchange rate (which is 10 to 1). On the black market it's about 6.50. And nothing is available on shelves.
By printing money for BI you effectively redistribute from the top half to the bottom half. This would suck for most people here, including myself. However, I don't think that redistribution from the bottom 99% to the top 1%, as I believe quantitative easing turned out, is much better.
That's not what the OP is getting at. BI may work well given certain preconditions, and subpopulations. But what use is the money if resource supply and the productive capacity of the economy is limited?
I suspect it is simply not true for most basic necessities.
> That's not what the OP is getting at. BI may work well given certain preconditions, and subpopulations. But what use is the money if resource supply and the productive capacity of the economy is limited?
I'd go further and say this is not true for most consumables within reasonable limits. Does this sound like a circular logic? I think my reasoning is flawed (I hope it is not) so pardon my thinking out loud. I mean if I define luxuries as superior goods[wiki] which we consume more of as we have more disposable income, then I imagine we might see prices increase on those things at some point but we don't mind because they are luxuries. But can we dismiss all superior goods as luxuries? If we can prove this connection, then I think we can put down this fear of inflation once and for all.
Thoughts?
[wiki] https://en.wikipedia.org/wiki/Superior_good Superior goods make up a larger proportion of consumption as income rises, and therefore are a type of normal goods in consumer theory. Such a good must possess two economic characteristics: it must be scarce, and, along with that, it must have a high price. The scarcity of the good can be natural or artificial; however, the general population (i.e., consumers) must recognize the good as distinguishably better. Possession of such a good usually signifies "superiority" in resources, and usually is accompanied by prestige.
> That's not what the OP is getting at. BI may work well given certain preconditions, and subpopulations. But what use is the money if resource supply and the productive capacity of the economy is limited?
I'd go further and say this is not true for most consumables within reasonable limits. Does this sound like a circular logic? I think my reasoning is flawed (I hope it is not) so pardon my thinking out loud. I mean if I define luxuries as superior goods[wiki] which we consume more of as we have more disposable income, then I imagine we might see prices increase on those things at some point but we don't mind because they are luxuries. But can we dismiss all superior goods as luxuries? If we can prove this connection, then I think we can put down this fear of inflation once and for all.
Thoughts?
[wiki] https://en.wikipedia.org/wiki/Superior_good Superior goods make up a larger proportion of consumption as income rises, and therefore are a type of normal goods in consumer theory. Such a good must possess two economic characteristics: it must be scarce, and, along with that, it must have a high price. The scarcity of the good can be natural or artificial; however, the general population (i.e., consumers) must recognize the good as distinguishably better. Possession of such a good usually signifies "superiority" in resources, and usually is accompanied by prestige.
Calling the Superior Good as "[that] which we consume more of as we have more disposable income" is not quite that of the wiki article. Note that the key word is proportion. Your definition is the basic demand relationship.
But even still, I think you're better off considering that as a necessary condition, not a definition. Giffen goods[0] follow the same pattern, and they are almost always under "basic necessities".
I return to the basic question: can the PPF curve for the economy under which BI is instituted be reshaped to supply what its recipients would buy? That's the key question.
I appreciate your open-mindedness to "think out loud."
[0]https://www.investopedia.com/terms/g/giffen-good.asp
But even still, I think you're better off considering that as a necessary condition, not a definition. Giffen goods[0] follow the same pattern, and they are almost always under "basic necessities".
I return to the basic question: can the PPF curve for the economy under which BI is instituted be reshaped to supply what its recipients would buy? That's the key question.
I appreciate your open-mindedness to "think out loud."
[0]https://www.investopedia.com/terms/g/giffen-good.asp
There might be enough milk and cereal to go around. I don't think there is enough housing, medical service and transportation (in the US). So those things will all go up in price. However, everyone should be able to afford those necessities so I'm not sure what the solution is. Limited resources is a very tough problem to solve.
In the US as of a few years ago, vacant homes outnumbered the homeless around 5:1.
https://www.truthdig.com/articles/vacant-houses-outnumber-ho...
I think ~1 car per adult is enough transportation for everybody. http://www.latimes.com/business/autos/la-fi-hy-ihs-automotiv...
Half of produce in the US is thrown away. https://www.theguardian.com/environment/2016/jul/13/us-food-...
Healthcare is certainly lacking in the US but other countries with far lower GDP per capita have somehow managed to give everyone healthcare.
I think the vast majority of necessities are not really particularly scarce in the US and there is easily enough at the very minimum for i.e. absolutely zero homeless and starvation.
I think ~1 car per adult is enough transportation for everybody. http://www.latimes.com/business/autos/la-fi-hy-ihs-automotiv...
Half of produce in the US is thrown away. https://www.theguardian.com/environment/2016/jul/13/us-food-...
Healthcare is certainly lacking in the US but other countries with far lower GDP per capita have somehow managed to give everyone healthcare.
I think the vast majority of necessities are not really particularly scarce in the US and there is easily enough at the very minimum for i.e. absolutely zero homeless and starvation.
Just for info, I live in Europe and health care is almost free for everyone, but most of the time the quality is terrible - if long waiting lists (sometimes longer than your expected lifetime), lack of most medication and having 2 patients in a single bed is what you think "somehow managed" means, then you are right. There is no free meal, but somehow people tend to ignore that.
Or, you just tax the top earners to pay for BI. Much more transparent.
How exactly do you propose to do that? One of Facebook's founders renounced US citizenship because of tax rates.
Again, it's only the rich who can afford to find tax havens and expensive accountants. The middle class is stuck paying taxes.
Again, it's only the rich who can afford to find tax havens and expensive accountants. The middle class is stuck paying taxes.
By renouncing citizenship he probably did the US a favor.
http://www.philosophersbeard.org/2012/04/what-to-do-about-ri...
Let them decide: give some of your wealth to finance BI or else renounce citizenship.
You'd have to ban them owning property or businesses in the country too. Otherwise they'd just stay but without citizenship or taxes.
> You'd have to ban them owning property or businesses in the country too. Otherwise they'd just stay but without citizenship or taxes.
This is why we need the estate tax (Paris Hilton tax or death tax as opponents like to say) to stay and probably increase in rate.
> For 2017, the estate and gift tax exemption is $5.49 million per individual, up from $5.45 million in 2016. That means an individual can leave $5.49 million to heirs and pay no federal estate or gift tax.
This is plenty generous. We should tax any estate beyond that at a minimum of fifty percent and close all loopholes.
I am not a big fan of income tax on businesses but I can see why we need it.
This is why we need the estate tax (Paris Hilton tax or death tax as opponents like to say) to stay and probably increase in rate.
> For 2017, the estate and gift tax exemption is $5.49 million per individual, up from $5.45 million in 2016. That means an individual can leave $5.49 million to heirs and pay no federal estate or gift tax.
This is plenty generous. We should tax any estate beyond that at a minimum of fifty percent and close all loopholes.
I am not a big fan of income tax on businesses but I can see why we need it.
> This is why we need the estate tax (Paris Hilton tax or death tax as opponents like to say) to stay and probably increase in rate.
How is it relevant to giving up citizenship and owning property or company? There's no death involved. If their children are not citizen either, they are not hit by inheritance tax too.
> I am not a big fan of income tax on businesses but I can see why we need it.
VAT is sort of like income tax for businesses. Except it's not taxed on B2B transactions. Which makes sense. Otherwise everybody would bring in whole production chain in-house and we'd be left with huge conglomerates and no SMBs.
How is it relevant to giving up citizenship and owning property or company? There's no death involved. If their children are not citizen either, they are not hit by inheritance tax too.
> I am not a big fan of income tax on businesses but I can see why we need it.
VAT is sort of like income tax for businesses. Except it's not taxed on B2B transactions. Which makes sense. Otherwise everybody would bring in whole production chain in-house and we'd be left with huge conglomerates and no SMBs.
mcny(1)
thats insane thats about 10X more than we have in Europe
My proposal is only 50% for inheritance above the limit (and likely 0%) under the limit. So if you want to leave $6M, and the limit is $5.95M then taxes are due only $0.05M. that's just $25k in taxes on a $6M wealth transfer.
When you renounce your citizenship, you don't get a green card - you become a foreigner, with no right to live and work in the country. Depending on your new citizenship, you may have the right to visit visa-free, but that's it.
That turns out to be a fairly rare and extreme step, taken either for ideological reasons (like Depardieu) or because they're actually foreigners who have minimal ties to the country otherwise (like Saverin, who you mentioned - he was born in Brazil, and was living in Singapore for years before renouncing his US citizenship). Generally people with that much money won't give up their homeland to save on their tax bill.
Unfortunately, the top earners are the ones with lobbyists, influence and power. They're very good and not getting themselves taxed. Everyone else could make it happen if they could focus and pay attention, but they're too easily influenced by sports, pop-stars, social media and fake news.
Inflation happens due to supply limits, for example if more milk can't be produced or more teachers can't be hired. Generally speaking, we assume producers can do these things, if given enough advance notice. More demand is good.
To say that these things can't be done at all and that more demand is bad is a defeatist attitude.
Venezuela is a special case where the government is attacking production. It's not what happens in a healthy economy.
To say that these things can't be done at all and that more demand is bad is a defeatist attitude.
Venezuela is a special case where the government is attacking production. It's not what happens in a healthy economy.
Price inflation is caused by
- increased money supply
- decreased demand for money
- increased demand for the good
- decreased good supply
The 11 million percent price inflation rate in Zimbabwe was not caused by a 11 million percent reduction in goods supply.
The 11 million percent price inflation rate in Zimbabwe was not caused by a 11 million percent reduction in goods supply.
If your currency is suffering from hyperinflation, your currency is worthless on international markets.
Why would they take money in a rapidly depreciating asset instead of just demanding hard currency that holds value decently well?
That starts mattering when you have nothing really to export and still require supplies (parts and food) from foreign countries.
It's shocking how connected and interdependent industries are now. I can't think of a single thing produced that doesn't need foreign inputs for production. Even apples need ladders for harvest, when one breaks, pesticides and fertilizer.
Why would they take money in a rapidly depreciating asset instead of just demanding hard currency that holds value decently well?
That starts mattering when you have nothing really to export and still require supplies (parts and food) from foreign countries.
It's shocking how connected and interdependent industries are now. I can't think of a single thing produced that doesn't need foreign inputs for production. Even apples need ladders for harvest, when one breaks, pesticides and fertilizer.
That assumes that he BI sum will stay unadjusted across years, a very dumb way to do it if true.
As for Venezuela, and similar situations, look towards the exchange rate.
As for Venezuela, and similar situations, look towards the exchange rate.
Policies like this always lag economic indicators, whereas exchange rates and prices adjust fairly quickly.
From [0], "However, Zimbabwe's peak month of inflation is estimated at 79.6 billion percent in mid-November 2008."
Even a private charitable organization cannot deal with that level of inflation by tweaking the minimum wage. Plus, you start running out of money (the physical paper kind) really quickly because you can't afford it anymore.
Or you can go further down the rabbit hole and enforce price controls. Which leads to shortages of goods and lack of supply because of zero incentive to work and produce. Seeing your children cold and hungry and fair prices is a huge incentive to be productive.
[0] https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe
From [0], "However, Zimbabwe's peak month of inflation is estimated at 79.6 billion percent in mid-November 2008."
Even a private charitable organization cannot deal with that level of inflation by tweaking the minimum wage. Plus, you start running out of money (the physical paper kind) really quickly because you can't afford it anymore.
Or you can go further down the rabbit hole and enforce price controls. Which leads to shortages of goods and lack of supply because of zero incentive to work and produce. Seeing your children cold and hungry and fair prices is a huge incentive to be productive.
[0] https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe
Now you are mixing two very different situations.
BI as a concept do not, and will never, fix exchange rate problems.
BI is for when on paper the nation has a functioning domestic economy, but one that exclude large parts of the population from taking part in said economy via jobs.
Weimar Germany was left with a non-functioning industry after WW1, and saddled with reparations denominated in foreign currency. Even Keynes warned that it would be a mess.
Zimbabwe similar ended up with a broken domestic industry, but in this instance it was the leadership that tried to keep up appearance via imports that ran things into the ground.
For Venezuela i would say that judge is still out, but the slide started with the bet on oil exports to shore up imports, only or for the oil price to take a dip. but in this instance i can't eliminate the potential for foreign meddling as the leadership had incensed certain world powers...
BI as a concept do not, and will never, fix exchange rate problems.
BI is for when on paper the nation has a functioning domestic economy, but one that exclude large parts of the population from taking part in said economy via jobs.
Weimar Germany was left with a non-functioning industry after WW1, and saddled with reparations denominated in foreign currency. Even Keynes warned that it would be a mess.
Zimbabwe similar ended up with a broken domestic industry, but in this instance it was the leadership that tried to keep up appearance via imports that ran things into the ground.
For Venezuela i would say that judge is still out, but the slide started with the bet on oil exports to shore up imports, only or for the oil price to take a dip. but in this instance i can't eliminate the potential for foreign meddling as the leadership had incensed certain world powers...
> For Venezuela i would say that judge is still out, but the slide started with the bet on oil exports to shore up imports, only or for the oil price to take a dip. but in this instance i can't eliminate the potential for foreign meddling as the leadership had incensed certain world powers...
The only thing world powers would have to do is let Maduro continue his economic policies.
There doesn't need to be an external plot, just stupidity in economic powers.
With such high inflation, nobody wants to take the BSF, so they insist on hard currency. Thus, prices increases. Even when you make bread, you need hard currency to buy yeast and machine parts (baking and mixing machines) as most of them are imported.
With prices spiking, the government gets the bright idea to slap on price controls, at an artificially low bring to "ensure the common man" has access to goods. The price controls don't allow breakeven considering the cost of production and imports, especially when the price rises faster than price controls allow. So they don't make anything that is price controlled.
Also, the price control board is controlled by the government. Every year during Christmas and before elections, the government goes in and slashes prices. Sure, you get a big screen TV for cheap, but they never get imported any more. Same thing with airlines. They're not allowed to repatriate profits at anything close to a realistic exchange rate, so they just stop flying there.
The only thing world powers would have to do is let Maduro continue his economic policies.
There doesn't need to be an external plot, just stupidity in economic powers.
With such high inflation, nobody wants to take the BSF, so they insist on hard currency. Thus, prices increases. Even when you make bread, you need hard currency to buy yeast and machine parts (baking and mixing machines) as most of them are imported.
With prices spiking, the government gets the bright idea to slap on price controls, at an artificially low bring to "ensure the common man" has access to goods. The price controls don't allow breakeven considering the cost of production and imports, especially when the price rises faster than price controls allow. So they don't make anything that is price controlled.
Also, the price control board is controlled by the government. Every year during Christmas and before elections, the government goes in and slashes prices. Sure, you get a big screen TV for cheap, but they never get imported any more. Same thing with airlines. They're not allowed to repatriate profits at anything close to a realistic exchange rate, so they just stop flying there.
Anecdata, but every alcoholic I knew was self-medicating, so I suspect that the money itself from BI won't have much direct impact on alcohol consumption. OTOH, unemployment is a huge trigger for depression, so BI could go either way depending on how it's accepted socially.
OTOH, I do expect a good majority of basic income recipients to waste their time on stuff that tickles the meaningfulness receptors in the brain: video games, social media, and other easy tribe forming activities such as sports fandom.
But I agree with your basic point: you don't need very many geniuses and artists supported by BI to justify a large number of freeloaders IMO.
OTOH, I do expect a good majority of basic income recipients to waste their time on stuff that tickles the meaningfulness receptors in the brain: video games, social media, and other easy tribe forming activities such as sports fandom.
But I agree with your basic point: you don't need very many geniuses and artists supported by BI to justify a large number of freeloaders IMO.
[deleted]
[deleted]
Politically, in the US, the first step to basic income is something like getting people to support free lunch in schools.
You know, instead of shaming kids.
You know, instead of shaming kids.
Most schools have this don't they? The two school districts I am near provide it on request. I am not even sure there is a income requirement.
Depending on income students can get free or reduced price lunches. No there is no universal free lunch program in the US. Not sure how they do it now but it used to work just like food stamps, kids in the program had membership cards that got punched when they got lunch while everyone else paid money.
Many schools issue a card or PIN that is used to buy lunches. You can't tell who is getting assistance and who isn't, unlike the old days where the kids on assistance used punch cards and everyone else paid cash.
When I was in school we used cards but you could still tell who was on assistance because they got a different/worse lunch than everybody else.
I don't know what the statistics are. It's "news" though.
https://www.google.com/search?tbm=nws&q=national+school+lunc...
https://www.google.com/search?tbm=nws&q=national+school+lunc...
Hmm. Looks like it is just a HISD thing. The provide 3 meals a day.
Or Welfare, or Social Security, or Medicaid.
> Very heart warming article, glad to hear about empirical evidence that basic income leads to fruitful, productive lives.
But of course it does because there is a Big White Friendly Brother supplying the money. If it was coming from Kenya's budget, these people would have to be taxed at a higher rate just so there is enough money to distribute as basic income.
But of course it does because there is a Big White Friendly Brother supplying the money. If it was coming from Kenya's budget, these people would have to be taxed at a higher rate just so there is enough money to distribute as basic income.
While I think it is important to note the racist tone of your comment, I am not going to respond to it directly, because I do not think I can do so civilly.
Factually speaking, the money involved would be about 16% of Kenya's GDP, which would indeed be a very substantial tax hike. If it had to be supplied by the village itself, rather than Kenyawide, it would presumably be a proportionally even larger burden; if it had to be supplied by the EAC or by Kenya and its neighboring countries, it would also be a proportionally even larger burden.
(Perhaps a useful point of comparison is that the Kenyan Defense Forces cost 5.3% of GDP.)
On the other hand, eliminating poverty entirely in exchange for only 15%–20% of taxation seems like it would be a pretty good deal; it falls far short of the costs of providing a Scandinavian-style welfare state. In the US, Social Security + Medicare + Medicaid adds up to US$1.97B per year, almost 11% of the US GDP. A substantial fraction of the US military budget also needs to be counted as poverty-reducing giveaways — whether to individual people for whom a job as a soldier is a path out of poverty, or to the military-supported industries that employ a substantial fraction of the US population. The US armed forces directly amount to 3.3% of US GDP, US$597B, but there's another half-percent split between DHS and DoE.
Factually speaking, the money involved would be about 16% of Kenya's GDP, which would indeed be a very substantial tax hike. If it had to be supplied by the village itself, rather than Kenyawide, it would presumably be a proportionally even larger burden; if it had to be supplied by the EAC or by Kenya and its neighboring countries, it would also be a proportionally even larger burden.
(Perhaps a useful point of comparison is that the Kenyan Defense Forces cost 5.3% of GDP.)
On the other hand, eliminating poverty entirely in exchange for only 15%–20% of taxation seems like it would be a pretty good deal; it falls far short of the costs of providing a Scandinavian-style welfare state. In the US, Social Security + Medicare + Medicaid adds up to US$1.97B per year, almost 11% of the US GDP. A substantial fraction of the US military budget also needs to be counted as poverty-reducing giveaways — whether to individual people for whom a job as a soldier is a path out of poverty, or to the military-supported industries that employ a substantial fraction of the US population. The US armed forces directly amount to 3.3% of US GDP, US$597B, but there's another half-percent split between DHS and DoE.
Whoa, eliminating poverty entirely...that's a leap almost equivalent to a hyperspace jump. I've seen actual economists, proponents of UBI, making much more modest assumptions.
At the very least rents and house prices in poor neighborhoods will go up, negating the benefit of UBI.
> In the US, Social Security + Medicare + Medicaid adds up to US$1.97B per year, almost 11% of the US GDP
Yes, and you want to dismantle them and share that sum among everyone in the form of basic income. That would mean you'd be taking money from people who actually need it, to give to people who need it less. To counter that, you'd have to increase everyone's taxes just so the former welfare recipients aren't worse off. Of course, the taxes won't be raised just enough to offset the newly gained income, it will have to be raised more, probably substantially more because there will be people who haven't qualified for welfare before but will receive the UBI.
My post has no racist tone, you're seeing something that isn't there.
> In the US, Social Security + Medicare + Medicaid adds up to US$1.97B per year, almost 11% of the US GDP
Yes, and you want to dismantle them and share that sum among everyone in the form of basic income. That would mean you'd be taking money from people who actually need it, to give to people who need it less. To counter that, you'd have to increase everyone's taxes just so the former welfare recipients aren't worse off. Of course, the taxes won't be raised just enough to offset the newly gained income, it will have to be raised more, probably substantially more because there will be people who haven't qualified for welfare before but will receive the UBI.
My post has no racist tone, you're seeing something that isn't there.
Kragen is right. "Big White Friendly Brother" was obviously race-baiting, and the first sentence of your comment was both acerbic and gratuitous—exactly what we don't want here.
We ban accounts that post flamebait, whether racial or otherwise, so please don't do this again. If you'd instead read https://news.ycombinator.com/newsguidelines.html and really take the spirit of this site to heart, we'd appreciate it. As you'll see, it means a lot more than editing flamebait out, though that's definitely required.
We ban accounts that post flamebait, whether racial or otherwise, so please don't do this again. If you'd instead read https://news.ycombinator.com/newsguidelines.html and really take the spirit of this site to heart, we'd appreciate it. As you'll see, it means a lot more than editing flamebait out, though that's definitely required.
OK, I can understand how it can be taken the wrong way but for the record it was a nod to the "white savior complex", rather than an attempt to insult Kenyans.
> In the US, Social Security + Medicare + Medicaid adds up to US$1.97B per year, almost 11% of the US GDP
Double-check your numbers, mate. The US GDP is more than $15 trillion.
Double-check your numbers, mate. The US GDP is more than $15 trillion.
Of course you're right. That should have read, "Social Security + Medicare + Medicaid adds up to US$1.97T per year," just as you say. Thank you for the correction!
You cannot ever eliminate poverty because the baseline (definition of poverty) is moving with the results: if poverty was having nothing to eat a few hundred years ago to not able to buy a car every 5 years and have a vacation abroad in our days (this is how it is defined in Europe), then in 200 years not having a hyperspace yacht will be poverty and you will struggle to provide it to everyone. Probably not gonna happen.
My grandparents did not have electricity most of their lives and they were considered wealthy - my grandpa did prison time under the communism regime because he was considered a bourgeois (he was a war refugee, but in 10 years of hard work he owned a small mill). Living in their house with electricity would not be enough in our days to be above the poverty line. You are chasing a moving target, tied above your barrel.
No, that isn't what poverty is. Poverty is being at the mercy of people who don't care about you for your necessities to flourish as a human being before you die.
It's true that how much it costs to avoid this — if it can even be avoided with money — depends on where you live; here in Buenos Aires, I don't need a car to get around, because I can take the bus anywhere in the city for €0,44, or a taxi for perhaps €8 if I'm in a hurry. There are plenty of cultural events that are free or very cheap. When I lived in the US, I had to have a car, and that was more expensive. (I did try commuting by bicycle and public transport, but it wasn't very practical.) Public universities here are free, but few people can afford the time off work to study.
Poverty is vulnerability. Poverty is helplessness. Poverty is weakness. Poverty is not a lack of money; it is a consequence of a lack of money in a money-driven society.
It's true that how much it costs to avoid this — if it can even be avoided with money — depends on where you live; here in Buenos Aires, I don't need a car to get around, because I can take the bus anywhere in the city for €0,44, or a taxi for perhaps €8 if I'm in a hurry. There are plenty of cultural events that are free or very cheap. When I lived in the US, I had to have a car, and that was more expensive. (I did try commuting by bicycle and public transport, but it wasn't very practical.) Public universities here are free, but few people can afford the time off work to study.
Poverty is vulnerability. Poverty is helplessness. Poverty is weakness. Poverty is not a lack of money; it is a consequence of a lack of money in a money-driven society.
This is not basic income at all.
First, people knew timespan is limited. Thus they had incentive to invest money wisely. What would happen if they knew the money would be coming forever?
Second, the money came from outside of the community. In Basic Income, money comes from within the community. In true BI scheme, the caregiver dude would be donor and paying to his neighbours.
First, people knew timespan is limited. Thus they had incentive to invest money wisely. What would happen if they knew the money would be coming forever?
Second, the money came from outside of the community. In Basic Income, money comes from within the community. In true BI scheme, the caregiver dude would be donor and paying to his neighbours.
They are funding it for 12 years. That's pretty close to forever. Any political system can change its policy over such a timespan.
Your second point is valid: this is additional money from outside. But the word "donor" would not apply in a true BI scheme. It would be seen as obligation to the community (via taxes), in the same way you pay for public infrastructure, because it adds a value to the community as a whole. (If it wasn't seen that way, it would probably not be implemented in the first place.)
Your second point is valid: this is additional money from outside. But the word "donor" would not apply in a true BI scheme. It would be seen as obligation to the community (via taxes), in the same way you pay for public infrastructure, because it adds a value to the community as a whole. (If it wasn't seen that way, it would probably not be implemented in the first place.)
12 years is not close to forever at all. Humans live for much longer than that and they know they've to plan beyond that.
Of course, even if they were promised money forever, some people would call bullshit and still plan ahead. But quite a few people do believe existing system, without declared timeout, are permanent. Especially if they were born in the system and haven't experienced any alternatives. But building system based on assumption that humans won't believe it's permanent would be kinda dumb :)
Donor is exactly correct word for net-loss in BI scheme. You give up part of your wealth and get nothing in return.
You know what you get back in return for your taxes. Like infrastructure or school for your kids. Welfare, when done correctly, is insurance. You know you can get in trouble, thus you pitch in. You have a chance to get in trouble and cash out.
But once "welfare queens" pop up, people are pissed off. Since they feel like donors instead of paying insurance.
What adds value to community is, for example, funding a local theatre, newspaper or building a park. You pay and you get something in return. You may pay proportionally more than other members of community. But you still get something in return nevertheless.
Meanwhile BI doesn't add value by itself. Nor it gives anything in return to those who pay.
Of course, even if they were promised money forever, some people would call bullshit and still plan ahead. But quite a few people do believe existing system, without declared timeout, are permanent. Especially if they were born in the system and haven't experienced any alternatives. But building system based on assumption that humans won't believe it's permanent would be kinda dumb :)
Donor is exactly correct word for net-loss in BI scheme. You give up part of your wealth and get nothing in return.
You know what you get back in return for your taxes. Like infrastructure or school for your kids. Welfare, when done correctly, is insurance. You know you can get in trouble, thus you pitch in. You have a chance to get in trouble and cash out.
But once "welfare queens" pop up, people are pissed off. Since they feel like donors instead of paying insurance.
What adds value to community is, for example, funding a local theatre, newspaper or building a park. You pay and you get something in return. You may pay proportionally more than other members of community. But you still get something in return nevertheless.
Meanwhile BI doesn't add value by itself. Nor it gives anything in return to those who pay.
> 12 years is not close to forever at all. Humans live for much longer than that and they know they've to plan beyond that.
Depends on the country and the quartile. Read the program, and they target the poorest of the poor in Kenya. I'm not really sure that the poorest in Kenya have a life expectancy approaching that of westerners. Happy to be corrected!
Depends on the country and the quartile. Read the program, and they target the poorest of the poor in Kenya. I'm not really sure that the poorest in Kenya have a life expectancy approaching that of westerners. Happy to be corrected!
How short should life expectancy be to consider 12 years as "forever"? 35? As in, you grow up and got 12-ish years to live?
By the way, Kenya's life expectancy is over 60, varies from source to source. One could argue that this is life expectancy for people born today and older generations have it much shorter. But it was over 50 since late 60s! I'm pretty sure 20-something expecting to live to 50 or 60 do not consider 12 years as "forever". Nor do 40-something who expects to beat the statistics.
https://www.theguardian.com/global-development/datablog/2013...
By the way, Kenya's life expectancy is over 60, varies from source to source. One could argue that this is life expectancy for people born today and older generations have it much shorter. But it was over 50 since late 60s! I'm pretty sure 20-something expecting to live to 50 or 60 do not consider 12 years as "forever". Nor do 40-something who expects to beat the statistics.
https://www.theguardian.com/global-development/datablog/2013...
I thought a fundamental characteristic of basic income was that is was redistributed wealth from within a community. This is money that comes from outside Kenya. It's an influx of wealth into their community. And shows very little about how effective it would be to take $1000 from someone to give to her neighbor.
Was this a closed system? As in: the money was taken from richer members of the community and given to poorer members? Or was the money brought in from the outside?
The largest complaint against basic income or government social programs generally is that most people will not use the income productively, and that it would lead to increases in vice and decreases in productivity. This, not being a closed system, does mean that the local economies are getting outside money injected into circulation, but it is a stretch to think that people would act differently (i.e. become less productive) in a closed system. In terms of rights or wrongs of income redistribution, I'd note that a lot of laws (laws that allow rentiers) and taxes (corporate tax cuts) are designed to redistribute wealth upwards too.
Can you explain how corporate tax cuts redistribute wealth upwards? Such a redistribution would imply that someone is paying taxes and some wealthy guys would receive those money, which does not happen anywhere, at any time.
Well usually when building these kind of tax structures, governments think on how much "revenue" they want to generate, and who to tax to get it. If lowering the taxes for one guy, another guy gets to pay more in taxes.
So, that's a long way of saying no, not a closed system, but an artificial economy
It's not the money that is brought in from the outside. It is the stuff. In any ubi system you will find a set of people who don't get paid but who produce the stuff for the money. That's the slave class you need to make it work.
The U of UBI stands for universal. If this "slave class" gets the same UBI, then they are not slaves. (At least not to the people who have no income in addition to UBI. They may be doing work for them, but they could easily stop and be no worse off than their "owners".)
> The U of UBI stands for universal.
“Unconditional”, usually.
“Unconditional”, usually.
Open system.
When is a basic income not a basic income? When it's a basic income experiment. The whole thing suffers from a collosal fallacy of composition.
https://medium.com/modern-money-matters/is-basic-income-basi...
https://medium.com/modern-money-matters/is-basic-income-basi...
this is an interesting and difficult problem to solve, i was reading an interview from sam altman along the same lines recently, not sure if he's working on this one, but seems the overall goal is to reduce poverty. this study presents some basic data about this hypothesis, but the sample size seems too small. if they widened the sample size, i'm sure there would be more abuse of the system. one thing that seems difficult is how you measure the success of this program, is it the people that you've moved out of poverty? and what's the funding model for this, i don't see many details about how this can be sustained for long periods of time or how this could be extended to much larger portions of people.
This is not UBI, this is charity. Big difference. I would be willing to give 22$ a month to a Kenyan person in need from my own personal income. Forcing society to do this through point of gun at government enforcement is wrong and I will never support it.
1) What's the difference for the receiver?
2) It only works as 'charity' between a vast income gap like you have here. Within local communities it's unlikely that many people have enough money and the disposition to support all the others.
2) It only works as 'charity' between a vast income gap like you have here. Within local communities it's unlikely that many people have enough money and the disposition to support all the others.
> 1) What's the difference for the receiver?
We already know giving money to poor people makes them happy. The question is how the whole community reacts to UBI
> 2) It only works as 'charity' between a vast income gap like you have here. Within local communities it's unlikely that many people have enough money and the disposition to support all the others.
Looks like Kenya have pretty high GINI coefficient [0] inside of it's regions as well as nation-wide. Thus there's wealth to be moved around inside of the country or even it's regions.
Many western countries have much lower GINI coefficient, so following this logic, there'd be even less people to share money with other people. Which is why BI opponents think it won't ever work.
[0] http://inequalities.sidint.net/kenya/abridged/gini-coefficie...
We already know giving money to poor people makes them happy. The question is how the whole community reacts to UBI
> 2) It only works as 'charity' between a vast income gap like you have here. Within local communities it's unlikely that many people have enough money and the disposition to support all the others.
Looks like Kenya have pretty high GINI coefficient [0] inside of it's regions as well as nation-wide. Thus there's wealth to be moved around inside of the country or even it's regions.
Many western countries have much lower GINI coefficient, so following this logic, there'd be even less people to share money with other people. Which is why BI opponents think it won't ever work.
[0] http://inequalities.sidint.net/kenya/abridged/gini-coefficie...
Charity doesn’t move wealth around and never will. I think you’re underestimating both the motives, breadth and cost of BI.
I totally agree that charity by itself doesn't move wealth. But $100 for the receiver is $100 wether it's charity or BI for the giver. What I'm saying is, we know BI works for receiver. The question is if donor side is willing to foot the bill. I'm well aware of BI scale and motives and that's why I don't think it'd work. Aside from when it approaches charity-like situation.
In day-to-day case, BI would be either working people sharing most of their wealth with the rest on massive scale. Which would cause uproar of the working people. Or charity-like situation where working people would just drop some breadcrumbs for the peasants. Which wouldn't be great either.
In day-to-day case, BI would be either working people sharing most of their wealth with the rest on massive scale. Which would cause uproar of the working people. Or charity-like situation where working people would just drop some breadcrumbs for the peasants. Which wouldn't be great either.
> Forcing society to do this through point of gun at government enforcement is wrong and I will never support it.
I think you've got your sense of morality mixed up if you think somebody's right to hoard 1000x more than they need is more sacred than someone else's right to basic healthcare, housing, and food. Not to mention the rapid automating and offshoring of job opportunities.
I think you've got your sense of morality mixed up if you think somebody's right to hoard 1000x more than they need is more sacred than someone else's right to basic healthcare, housing, and food. Not to mention the rapid automating and offshoring of job opportunities.
Wait. Did anyone run a long term empirical study of how giving tax cuts to the 0.1% of income earners would benefit the bottom 99% before enacting regressive taxation policies? No? Then why the F must we devote so much energy to justifying giving every day humans basic services. I think that we just need to get over and be done with the propaganda of the oligarchs.
What makes you think that basic income isn't "propaganda of the oligarchs"? Have you stopped to think what it would actually mean?
To me is seems like an attempt to retain the current power structures and the current status of the contemporary elite, by trying to retain an outdated economic system past the point when the vast majority of people will end up completely cut of from it.
To me is seems like an attempt to retain the current power structures and the current status of the contemporary elite, by trying to retain an outdated economic system past the point when the vast majority of people will end up completely cut of from it.
UBI is not a panacea, we know that. Every single thing invented by we-mortals has flaws and it's a matter of choosing alternatives and making do with 'less-bad' options. Will UBI be better? Tests like the OP are here to find out. But we know that the current demo-capitalistic system has flaws and UBI may be a way to get to 'less-bad', so a test is warranted.
That said, I think a UBI-like scheme will have HUGE unintended consequences in the dating/marriage market. Many/all potential partners/mates will no longer have an 'easy' way to signal their potential marriage value outside of physical fitness and proven virility/fertility. For a lot of the population you'll have taken away a key factor in assessing potential marriage value. I think that'll tend towards polygamy/andry in a few decades' time.
That said, I think a UBI-like scheme will have HUGE unintended consequences in the dating/marriage market. Many/all potential partners/mates will no longer have an 'easy' way to signal their potential marriage value outside of physical fitness and proven virility/fertility. For a lot of the population you'll have taken away a key factor in assessing potential marriage value. I think that'll tend towards polygamy/andry in a few decades' time.
Why should we modify capitalism when it has so obviously failed to provide for the general populace? This is true at both a national and a global level.
What does this mean?
Meaning, capitalism hasn't actually meaningfully made good investments in humanity's future. Just the current generation's quality of life at the deep expense of future generations. I don't see that it's a rational answer to humanity's problems at all. Do you? If so, how do you convince a capitalist to invest in their children's world rather than their children's wealth? Humans don't work like that; capitalism is good for people who can exploit others, not for communities.
Granted. I was a bit sensationalist, but from the politically charged landscape in which I exist, it seems as though the rich get to arbitrarily dictate transfers which directly benefit them without much in the way of taking on the empirical burden for justifying those transfer. Put another way, what if in the U.S. the recent tax bill would have been put forward as a trial in which some randomly selected number of large businesses were selected to have their tax rate reduced? We could then examine if those businesses were more inclined to increase hiring, extend additional benefits to their employees, or become in any way better "engines of growth". Why must it be the poor who must wait for their lottery ticket from the heavens?
> I was a bit sensationalist, but from the politically charged landscape in which I exist
We all exist in that landscape, so we all need to have the discipline not to be sensationalist when commenting about it on HN, or we won't have much of an HN left to comment on. Could you please help us with that? The spirit of the site is described at https://news.ycombinator.com/newsguidelines.html and https://news.ycombinator.com/newswelcome.html.
We all exist in that landscape, so we all need to have the discipline not to be sensationalist when commenting about it on HN, or we won't have much of an HN left to comment on. Could you please help us with that? The spirit of the site is described at https://news.ycombinator.com/newsguidelines.html and https://news.ycombinator.com/newswelcome.html.
The problem is pragmatism. The tax cuts that were proposed in the USA could actually be a massive windfall, because currently a lot of companies (and individuals) keep profits offshore, so pay no tax at all.
The USA is different to most countries in that it has almost all the world's biggest companies. The number one way to maximise US tax revenues is to reduce the incentives to offshore cash, and even a small change in the monetary strategy could have huge results.
Contrast that with Iceland (~330K people) and their best way to maximise tax revenue is to sell their cheap geothermal power to aluminium smelters and have them pay virtually no company taxes, as taxing the wage earners the smelters generate is their best bet.
Pragmatism is often extremely ugly.
The USA is different to most countries in that it has almost all the world's biggest companies. The number one way to maximise US tax revenues is to reduce the incentives to offshore cash, and even a small change in the monetary strategy could have huge results.
Contrast that with Iceland (~330K people) and their best way to maximise tax revenue is to sell their cheap geothermal power to aluminium smelters and have them pay virtually no company taxes, as taxing the wage earners the smelters generate is their best bet.
Pragmatism is often extremely ugly.
There have been related studies. I can't find the reference now, but there was a study done in Poland after the break up of the USSR on how to best aid its economy get going. They found that it was better to give the aid to the already established businessmen (wealthy) than the population in general (which was mostly poor). That these businessmen would invest the aid in their business which would create localized, long lasting economic improvements. Where the general disbursement of aid would help for a little while then fall off.
These guys obviously weren't the 0.1%, but people do try to study these things.
These guys obviously weren't the 0.1%, but people do try to study these things.
Good intentions obviate the need for evidence based policy making?
I’m inclined to agree, at first I wrestled with the idea that the market would adjust such that staples like rent and groceries would merely increase in price, or that a large distribution of the population would merely hand their money to the savviest players of the money accumulation game, but now I see the utility of simply having guaranteed recurring chances
Finally, I realize that this doesnt have to come from the state. Foundations and other aspects of the private sector are capable of doing this on a larger scale than we realize
Finally, I realize that this doesnt have to come from the state. Foundations and other aspects of the private sector are capable of doing this on a larger scale than we realize
>Foundations and other aspects of the private sector are capable of doing this on a larger scale than we realize
Exactly. And more specifically, if Silicon Valley were to identify this as a problem to solve with its brains, money, and technology, then the problem might be solved much sooner, more easily, and more efficiently as compared to waiting for a politically correct solution from a government.
One experiment for basic income that has not been tried: create a new cryptocurrency that makes UBI distributions to all wallets. The question created by such a cryptocurrency is whether the issues created by making such distributions (such as preventing people from making an infinite number of wallets) have practical technological solutions.
If there are technological solutions to the problems inherent in a UBI cryptocurrency, then the idea should be implementable by either a cryptocurrency or a government (if a government ever got around to it). Furthermore, if there are not solutions to the problems inherent in a UBI cryptocurrency, then that could help convince UBI supporters that 1) UBI might not be a good solution and 2) a solution other than UBI needs be identified.
Exactly. And more specifically, if Silicon Valley were to identify this as a problem to solve with its brains, money, and technology, then the problem might be solved much sooner, more easily, and more efficiently as compared to waiting for a politically correct solution from a government.
One experiment for basic income that has not been tried: create a new cryptocurrency that makes UBI distributions to all wallets. The question created by such a cryptocurrency is whether the issues created by making such distributions (such as preventing people from making an infinite number of wallets) have practical technological solutions.
If there are technological solutions to the problems inherent in a UBI cryptocurrency, then the idea should be implementable by either a cryptocurrency or a government (if a government ever got around to it). Furthermore, if there are not solutions to the problems inherent in a UBI cryptocurrency, then that could help convince UBI supporters that 1) UBI might not be a good solution and 2) a solution other than UBI needs be identified.
Update, actually there is some Crypto UBI work being done
[1] http://cryptoubi.org/
[2] https://www.mannabase.com/
[3] https://medium.com/@fcecin/the-basic-whitepaper-7e789f16abe
[4] http://www.greshm.org/files/greshm.pdf
[5] https://ourbasicincome.wordpress.com/2015/06/18/circles-univ...
[1] http://cryptoubi.org/
[2] https://www.mannabase.com/
[3] https://medium.com/@fcecin/the-basic-whitepaper-7e789f16abe
[4] http://www.greshm.org/files/greshm.pdf
[5] https://ourbasicincome.wordpress.com/2015/06/18/circles-univ...
I would like to know if there are examples of Silicon Valley actually solving issues around disparity. Social and economic justice has typically been addressed by the margins of society — while those “instigators” seem have have deftly used technology. The Black Lives Matter movement, the career of women technologists who this year brought to the fore pervasive sexism in Silicon Valley are two examples that come to mind, maybe YC funding of Africa-based startups is another?
Sam Altman is currently running a small-scale BI pilot program in Oakland, if that qualifies.
This is less “solving a problem” than it is an experiment at this time, of course.
This is less “solving a problem” than it is an experiment at this time, of course.
Or it could show that UBI works very well. Your biases are showing.
My preference is for UBI to succeed so that I could spend 8 -10 hours a day pursuing personal projects and research instead spending 8-10 hours a day doing what someone else tells me to do in order to eat.
I am skeptical that UBI will work because paying people for nothing seems like it may be counterproductive by creating rampant inflation or by acting as a disincentive for most.
The rampant inflation argument, which most economists would use to argue against UBI, is interesting because most countries seem to be suffering from deflation. If deflation is a problem, then inflation created by UBI could be beneficial to an economy. But getting a government to start up a new UBI program to combat deflation does not seem like an efficient path for creating a solution because governments are slow, rarely do things correctly, and magnify their mistakes by taking years to correct initial imperfections.
Rather, focusing the brains, money, and technology of Silicon Valley on proving the idea with a cryptocurrency based UBI seems like a much more efficient approach to either 1) create a solution (the preferred option) or 2) settle the debate so that we can move on.
I am skeptical that UBI will work because paying people for nothing seems like it may be counterproductive by creating rampant inflation or by acting as a disincentive for most.
The rampant inflation argument, which most economists would use to argue against UBI, is interesting because most countries seem to be suffering from deflation. If deflation is a problem, then inflation created by UBI could be beneficial to an economy. But getting a government to start up a new UBI program to combat deflation does not seem like an efficient path for creating a solution because governments are slow, rarely do things correctly, and magnify their mistakes by taking years to correct initial imperfections.
Rather, focusing the brains, money, and technology of Silicon Valley on proving the idea with a cryptocurrency based UBI seems like a much more efficient approach to either 1) create a solution (the preferred option) or 2) settle the debate so that we can move on.
To my mind (and I am no economist) inflation is the only constraint on a fiat currency's ability to create monetary tokens from nothing. We are indeed fighting deflation, almost globally. I suspect that the reason for this is that most economies are operating under the idea that the limits of productive capacity are not far off from what is being produced now, that is that they assume scarcity is a real threat. Historically, every time we have seen hyperinflation, there have been disruptions to production (e.g. war), or an economy that is built around one product (e.g. oil). In today's global economic system, local disruption (say a hurricane) is easily routed around by other suppliers in different locations. I think that our productive capacity before affecting inflation, and I'm just guessing here, is much much higher than we suppose. If so, I suspect printing money won't cause inflation because there is excess production capacity, and global competition would limit artificial price increases.
Because I believe this, I support much higher deficits, and thus am a hybrid Republican/Democrat: I want low taxes, and high government spending. However, aside from infrastructure, I'd want the government spending to be a bottom up type of spending like UBI, because it would give people seed money to start businesses, and more money to spend at other's businesses.
Because I believe this, I support much higher deficits, and thus am a hybrid Republican/Democrat: I want low taxes, and high government spending. However, aside from infrastructure, I'd want the government spending to be a bottom up type of spending like UBI, because it would give people seed money to start businesses, and more money to spend at other's businesses.
If the market is competitive, and if there are not hard limits to production in face of increased demand, prices will not go up. That is, if stores know that we all have an extra $100 in our pockets, they'd like to raise prices, but when they do, people just start buying a competitor's cheaper product.
[deleted]
If UBI works, I wonder, where is the crypto coin to prove it?
here you go: https://duniter.org/en/introduction/
That requires work to receive coins? If so, it doesn't really sound like UBI.
Here's the only UBI experiment I'm interested in seeing:
1. Take a bunch of people
2. Make them all give you 20% if their income for X years
3. Give them all back ((total money in) - (overhead costs to run the program)) / (total participants)
I suspect it would be difficult to find people who would participate willingly.
1. Take a bunch of people
2. Make them all give you 20% if their income for X years
3. Give them all back ((total money in) - (overhead costs to run the program)) / (total participants)
I suspect it would be difficult to find people who would participate willingly.
It is done in parts of the world, it's called taxes and you get back "services" (sometimes you get something, sometimes you get nothing) and the 20% is around 50-70% in Europe.
So - why not do the experiment? You think people would go for it?
No, they would not. Unless you ask them at gunpoint (or threaten with jail, that's the same for me) they will not, it does not make sense after you lived in communism for a lot of time to go back that route.
Rather than downvotes I would love to hear other ideas about how to fund UBI. Experimenting with only the good side seems silly - of course poor people's lives will get better if we give them money. But only experimenting with that side of the equation isn't testing UBI, it's just testing a different kind of welfare or charity. Maybe we can learn some things about welfare, but we're not learning anything about UBI.
There's never an issue with funding it. The problem is that it always ends up being a form of theft in real terms from somebody. They eventually get fed up with the bad deal and either stop producing or end the system.
https://medium.com/modern-money-matters/is-basic-income-basi...
https://medium.com/modern-money-matters/is-basic-income-basi...
Anyone interested in basic income should check out https://prps.io
An ERC20 token from Athene, the best paladin in the world. No, this is not a scam.
An ERC20 token from Athene, the best paladin in the world. No, this is not a scam.
Slightly misleading headline aside, I'm glad the experiment is being done, since international aid had a lot of problems. The promise of UBI is that you don't need huge bureaucratic infrastructure to help lots of people. Maybe all you need is a payment system. Direct cash can put more resources in the hands of the beneficiaries, and less in the hands of aid organizations that exist primarily to persist.[0]
[0] https://www.npr.org/2015/06/03/411524156/in-search-of-the-re...