Some Democrats angling for the 2020 presidential nomination have a big idea: a basic jobs guarantee, where the government promises a job to anybody who wants one. Cory Booker, Kirsten Gillibrand, Elizabeth Warren, and Bernie Sanders are all said to be considering the plan.
I’ve pushed for a basic income guarantee before, and basic job guarantees sure sound similar. Some thinkers have even compared the two plans, pointing out various advantages of basic jobs: it feels “fairer” to make people work for their money, maybe there’s a psychological boost from being productive, you can use the labor to do useful projects. Simon Sarris has a long and excellent article on “why basic jobs might fare better than UBI [universal basic income]”, saying that:
UBI’s blanket-of-money approach optimizes for a certain kind of poverty, but it may create more in the long run. Basic Jobs introduce work and opportunity for communities, which may be a better welfare optimization strategy, and we could do it while keeping a targeted approach to aiding the poorest.
I am totally against this. Maybe basic jobs are better than nothing, but I have an absolute 100% revulsion at the idea of implementing basic jobs as an alternative to basic income. Before getting into the revulsion itself, I want to bring up some more practical objections:
1. Basic jobs don’t help the disabled
Disability has doubled over the past twenty years and continues to increase.
Experts disagree on how much of the rise in disability reflects deteriorating national health vs. people finding a way to opt out of an increasingly dysfunctional labor market, but everyone expects the the trend to continue. Any program aimed at the non-working poor which focuses on the traditionally unemployed but ignores the disabled is only dealing with the tip of the iceberg.
The current disability system has at least three major problems which I would expect basic income to solve.
First, the disability application process is a mess. Imagine the worst DMV appointment you’ve ever had to obtain the registration to a sketchy old car you got from a friend, then multiply it by a thousand – then imagine you have to do it all while being too disabled to work. Even clear-cut applications can take months to go through, inflicting an immense burden on people who don’t know where their money is coming from during that time. And people with harder-to-prove conditions like mental illness and chronic pain might require multiple appeals – dragging the process out for years – or never get it at all. The disabled people I have talked to generally hate everything about this.
Second, disability is becoming a catch-all for people who can’t find employment. This is a useful function that needs to be served. But right now, it involves unemployed people faking and exaggerating disability. This rewards liars and punishes the honest. If society labels the system “FOR DISABLED PEOPLE ONLY”, basic fairness – to the disabled, to taxpayers, and to honest workers who aren’t gaming the system – require them to gatekeep entry. Right now they spend lots of time and money on gatekeeping and still mostly fail. But any attempt to crack down would exacerbate the first problem, the one where real disabled people have to spend months or years in a Kafka novel before getting recognized.
Third, because of the first and second problems disabled people feel like they constantly have to prove themselves. Sometimes they’ll have good days – lots of conditions are relapsing-remitting – and they’ll want to go play in the park or something. Then they have to worry that some neighbor is going to think “well, that guy looks pretty healthy”, take a photo, and they’ll end up as one of those stories with headlines like SO-CALLED DISABLED PERSON CAUGHT PLAYING SPORTS IN PARK. Other times it’s a bureaucratic issue. I had a patient who, after a few years on disability, recovered enough that he thought he could work about ten hours a week. When he tried to make it happen, he learned he would lose his disability payments – apparently if you can work at all the government doesn’t believe you’re really disabled – and ten hours a week wasn’t enough to support himself. So he cancelled the new job and didn’t work at all.
As long as you have a system whose goal is to separate the “truly” disabled people from the fakers, you’re going to run into problems like these. But refuse to gatekeep, and you have an unjust system where anyone who wants to lie can get out of work while their more honest coworkers are left slaving away all day. Basic income cuts the Gordian knot by proposing that everyone is legally entitled to support, whether they’re disabled or not. Disabled people can get their money without gatekeeping, and there’s no reward for foul play.
Basic jobs abandons this solution and takes us right back to the current system. If you’re abled enough to perform a government job, you’ve got to do it. Who decides if you’re abled enough? The Kafkaesque gatekeepers. And so we get the same bureaucratic despair, the same attempts to cheat the system, and the same perverse incentives.
And the number of disability claims keeps rising. Remember, a lot of economists think that the flight away from work and toward disability comes from people voting with their feet against exactly the kind of low-paying unpleasant jobs that basic jobs advocates want to offer everybody. Expect them to vote against those too, with no clear solutions within the basic jobs paradigm.
2. Basic jobs don’t help caretakers
And another 10% to 15% of the jobless are people caring for their sick family members.
This is unavoidable and currently uncompensated. The AgingCare Caregiver forum says their “number one question” is whether people who need to take time off work to care for a sick or elderly parent can get money. The only answer they can provide is “if the person you’re caring for has money or insurance, maybe they can pay you”. If they don’t, you’re out of luck. [EDIT: apparently some states do offer some money for this].
Right now our society just drops the ball on this problem. I don’t blame it; giving people money to care for family members would be prohibitively expensive. It would also require a gatekeeping bureaucracy that would put the disability gatekeeping bureaucracy to shame. Not only do they have to assess if someone’s really unable to subsist without care, they also have to decide who gets to take the option for which relatives. I have a second cousin some number of times removed who’s very disabled; can I quit my job and get paid a reasonable salary to take care of him? What if I tell you I’ve never met him or even talked to him on the phone, and just have my grandmother’s word for it that he exists and is sick? What exactly counts as caretaking? If I go visit my second cousin once a day for an hour to make sure he hasn’t gotten any sicker than usual, should the government pay me a full salary? What if actually doing that is 100% vital to my second cousin’s continued survival and I wouldn’t be able to do it consistently while holding down a job? You are never going to be able to make a bureaucracy that can address all these issues fairly.
Basic income cuts the knot again, giving everyone enough money that they can take care of sick or aging friends or relatives if they so choose. You don’t have to justify your choice to provide this level of care (but not that level) to the government. You can just do what needs to be done.
Basic jobs once again drops the ball on this problem. If your mother is dying, you can’t be there to help her, because the government is going to make you dig ditches and fill them in again all day to satisfy people’s worry that somebody somewhere might be getting money without doing enough make-work to “deserve” it.
3. Basic jobs don’t help parents
Everything above, except this time you’re a single parent (or a double parent whose spouse also works) and you want to take care of your child. If you could afford daycare, you probably wouldn’t be the sort of person who needs to apply for a guaranteed basic job. What do you do?
I know what the basic jobs people’s solution to this is going to be: free daycare for all! Okay. So in addition to proposing the most expensive government program ever invented, you want to supplement it by passing the second most expensive government program ever invented, at the same time? Good luck.
But even aside from this, I want us to step back and think about what we’re doing. I have met people – mostly mothers, but some fathers too – who are heartbroken at the thought of missing the best years of their children’s lives grinding away at a 9 to 5 job, stuck in traffic commuting to their job, or being too tired to spend time with them after they get home from their job. These people miss their kids’ first steps, outsource watching their first words to underpaid daycare employees, and have to choose between attending their kids’ school plays and putting food on the table.
And if we check the Treasury and decide that we, as a society, don’t have enough money to solve this problem – then whatever, we don’t have enough money to solve this problem.
But I worry we’re going to check and find we have more than enough money. But somebody is going to be so excited about making poor people do busy-work to justify their existence, that we’re going to insist on perpetuating the problem anyway. And if that forces us to pay for universal free daycare, we’re going to be spending extra money just to make sure we can perpetuate the problem as effectively as possible. We’re going to be saying “We could give basic income for $800 billion, or basic jobs plus universal daycare for $900 billion. And that extra $100 billion? That’s the money we spend to make sure you’re digging ditches and filling them in all day, instead of getting to be at home spending time with your kids.”
4. Jobs are actually a big cause of poverty
Poor people’s two largest expenses are housing and transportation.
Guaranteed jobs have to be somewhere. Most of them will be in big cities, because that’s where everybody is. The ones in the country will be few and far between.
That means to get to your government-mandated job, you’ll either need to live in the big city or have a car. Living in the big city means tripling your monthly rent. Having a car means car payments, insurance payments, repair payments, gas payments, and incidentals.
When I first started working with poor patients, I was shocked how many of the problems in their lives were car-related. For well-off people like me, having a car is background noise; you buy or lease it for a reasonable price, then never worry about it again. Poor people can’t afford to buy and don’t always have good enough credit to lease. They tend to get older, sketchier cars that constantly break down. A constant complaint I heard: “My car broke, I can’t afford repairs, and I’m going to get fired if I can’t make it to my job”. Some of them can’t afford insurance and take their chances without it. Others have had various incidents with the police that cost them their license, but they can’t just not show up to work, so they drive anyway and hope they don’t get arrested.
Then there are the little things. Your work doesn’t have a break room, so you’ve got to eat out for lunch, and there goes a big part of your food budget. Your work demands a whole new set of business clothes, so there’s double your clothing budget. You can’t attend things during normal business hours, so you have to pay extra for out-of-hours services.
And then there’s all of the problems above. You can’t take care of your children anymore, so you’ve got to pay for daycare or a nanny or an Uber to take them to their grandparents’ house. You can’t take care of your sick parents anymore, so you’ve got to pay for a home health aide to come in and look after them. You get job-related strain or stress, and there’s the cost of a doctor’s appointment.
And then there are the fuzzier things. If you’ve just spent the entire day at work, and you’re really exhausted, and you never get any time to yourself, maybe you don’t have the energy left to drive to the cheaper supermarket on the other end of town. Maybe you don’t have the time to search for the absolute best deal on the new computer you’re getting. Maybe you don’t have the willpower to resist splurging and giving yourself one nice thing in your life of wage slavery. All of this sounds kind of shameful, but they’re all things that my patients have told me and things that I do myself sometimes despite my perfectly nice well-paying job.
5. Basic jobs may not pay for themselves by doing useful work
I once read an economist discussing why unemployment exists at all. That is, there are always people who would like to have someone clean their house, take care of their children, or come to their house and cook them food. And there are always businesses that would like their floors a little cleaner, or their customers served a little faster, or one more security guard to keep everything safe. Surely they would pay some amount of money to get these jobs done? And surely some homeless person would rather take that small amount than starve on the streets? So why are there still unemployed people?
One answer must be the minimum wage, but how come this happens even in times and places where minimum wages are absent or easy to evade?
The economist suggested that not all employees are net positive. Employees can steal from you, offend your customers, or be generally weird and smelly and ruin the atmosphere. They can be late or not show up at all – and if you made plans depending on their presence, that can be worse than your never hiring them in the first place. A bad nanny can traumatize your kid. A bad maid can break your priceless vase. A litigious employee can take you to court on false charges. Somebody who’s loud and curses at you and constantly smells of marijuana can just make you a little more stressed and unhappy all the time.
So if you have a job that only produces 1 utility, but a bad employee in that job will cost you 10 utility, and there’s a 10% chance any employee you get will be bad – then you’re not going to fill that job no matter how low a salary people are willing to work for.
How bad can employees get? Please read these AskReddit links. They’re slightly off-topic, but they’re going to give you information you can’t get any other way:
— AskReddit: Bosses of Reddit, what was your worst employee like?
— Managers of Reddit, who was your worst employee?
— What is the worst employee you have had to put up with?
— Who’s the worst coworker you ever had?
It’s safe to say they can get pretty bad.
I know many unemployed people who are amazing virtuous hard-working folks. But I also know the unemployed guy who lives in a cardboard box by the BART station, is surrounded by a protective shell of discarded beer cans, and shouts “GRAAAAGH” at passers-by for inscrutable reasons. And the amazing virtuous hard-working folks have a decent shot at getting a job in the private sector eventually, but the guy who shouts “GRAAAAGH” never will. Your population of basic-job-needers is going to be disproportionately composed of people who don’t fit into the regular workforce. How do you think that will turn out?
I worry some people think choosing basic jobs over basic income means free labor. Like, if you were going to pay someone a basic income of $10K/year, but the market value of their labor is $8K/year, you could employ them running a soup kitchen, get that $8K of value, and then you’re really only “losing” $2K/year.
I am less sanguine. If you pay people $10K/year, you’re only losing $10K/year. If you employ them to run a soup kitchen, and the soup kitchen has to keep closing because of hygiene violations, or gets hit with a sexual harassment lawsuit because someone groped a customer, or burns down because someone left the stove on, or loses all its customers because the manager shouts “GRAAAAGH” at everybody who asks for soup – then you’re losing more.
6. Private industry deals with bad workers by firing them; nobody has a good plan for how basic jobs would replace this
Suppose someone does accidentally leave a stove on and burn down the soup kitchen. You transfer them to an agricultural commune and they crash the tractor into a tree. You transfer them to some kind of low-risk paper-pushing job, but they’re late to work every day and skip it entirely once or twice a week, and important papers end up tragically un-pushed. After a while, you decide they are too incompetent to add non-negative value to any of the programs on offer. What do you do with them?
If you fire them, then you’re not a basic jobs guarantee. You’re a basic-jobs-for-skilled-workers-whom-bosses-like guarantee. We already have one of those – it’s called capitalism, maybe you’ve heard of it. But a real solution to poverty would have to encompass everybody, not just people who are good at working within the system.
And if you don’t fire them, what’s your plan? Accept a certain level of burning-things-down, customer complaints, coworker complaints, and unexcused absences? Let them make everybody around them miserable? Turn your soup kitchen into some kind of federal disaster area because you’re absolutely committed to letting every single human being in the United States work there?
Or transfer them to a job in a padded room putting blocks in stacks and knocking them down again, in a way that inconveniences nobody because nobody cares about it? Abandon all pretense at creating anything other than busy-work for poor people out of an all-consuming desire to make sure nobody can live comfortably unless they have spent forty hours of every week in boredom and misery?
Or offer these people a basic income, and let all your other employees hate you for giving incompetent people leisure time at home with their family while the hard workers dig ditches all day?
This isn’t speculation about some vague future. These questions get played out all around the country in our existing “government must take everyone no matter how little they want to be there” institution, ie public school. Here’s a quote from a reader the last time we discussed the public school system.
I was friends with a guy who briefly worked as a teacher at a public high school in central DC (I’m 80% sure it was Cardozo High). He had an education background thanks to spending several years working as a youth camp counselor and as an after-school program counselor, and that was sufficient to qualify him for DCPS’ abbreviated teacher training program (such a thing existed in 2009 when he did it; I’m unsure if it is still around). During the training program, I remember him speaking about his enthusiasm for the teaching skills he was learning and about his eagerness to put them to use (in retrospect, I think some of this was a nervous attempt to convince himself the job wouldn’t be bad). After a break of several months, we spoke again, and he was almost totally disillusioned with the job and was already thinking of quitting. This is what I remember him saying:
1) On the first day of classes, there was no orientation for new teachers, no brief meeting where the Principal shook his hand and said “Welcome Aboard,” nothing. He had to go to the front office and ask a secretary what classroom was his and walk there by himself.
2) Unexcused absences were chronic and undermined his ability to teach anything. At the start of each of his classes, he had a written roster of students, and he had to check off which students were there. For any class, typically 20-30% of students would be missing, without explanation (This is a very important point to remember whenever anyone tries to blame DCPS’ poor outcomes on large class sizes–on paper, each class might have 35 students, but typically, only 23 are actually showing up). Additionally, the 20-30% of students who were absent each class varied from day-to-day, meaning one student didn’t know what was taught on Monday, the one next to him was there Monday but not Tuesday, the third was there the first two days but not Wednesday, etc.
3) Student misbehavior was atrocious. For example, out of the students who showed up to class, it was common for some to walk into the classroom late, again without any explanation and often behaving disruptively. As a rule, whenever a student did that, he was obligated to sign his name on a clipboard for the teacher’s attendance records (there was no punishment for tardiness–late students merely had to write their names down). Some late students would chronically resist doing this, either ignoring him and just going to their desks or yelling curses at him. My friend described an incident where one student–who was physically bigger than he was–yelled out he was a “FAGGOT” when asked to sign the clipboard, provoking laughs from all the other students, before sitting down without signing it. After seeing he could get away with that, the student started calling my friend “FAGGOT” all the time. Other examples of misbehavior included near-constant talking among the students during lessons and fooling around with cell phones.
4) Teachers received almost no support from the school administration. Had sane rules been followed at this high school, students would have been immediately sent to the office for formal punishment for these sorts of offenses I’ve described. However, under such a policy, the office would have been overwhelmed with misbehaving students and probably some of their enraged parents, so the administration solved the problem by forbidding teachers from sending students to the office for anything other than physical violence in the classroom. My friend had no ability to formally punish the student who liked to call him “FAGGOT” other than to use stern verbal warnings.
5) Most of the students were unwilling and in some cases unable to learn. During class sessions, the students were clearly disengaged from what he was teaching. Homework completion rates were abysmal. As the end of the academic semester neared, he saw that a huge fraction of them were on track to fail, so he resorted to pitiful cajoling, pizza parties, reward schemes, and deals involving large curves to everyone’s grades if they could only, for once do a little work, and it didn’t work. Some of his students were Latino and understood little or even no English, meaning they learned (almost) nothing, even when they tried. He resorted to seating the students who knew no English next to bilingual Latinos who could translate for them. That was the best he could do. In fairness, he spoke glowingly of some of his students, who actually put in some effort and were surprisingly smart […]
I’ll never forget how crestfallen and stressed out he was when he described these things to me. Having never taught in American public schools, I didn’t realize just how bad it was, and the detailed nature of his anecdotes really had an impact on me. I advised him to finish his year at the high school and then to transfer to ANY non-urban school in the area, even if it meant lower pay or a longer commute. We lost touch after that, but I can’t imagine he still works in DCPS.
The education system remains popular because they can always hold up glossy posters of smiling upper-class children at Rich Oaks Magnet High School and claim the system works. But basic jobs are going to be selecting primarily from the very poor demographic and they’re going to get hit with the same problem as the poorest public schools – a need for people to behave, combined with inability to credibly disincentivize misbehavior.
Basic income avoids this problem. It provides money to everyone, good employees and bad employees alike, without forcing any workplace to keep people it finds unproductive or threatening, and without having to find humiliating make-work jobs for anybody.
7. Private employees deal with bad workplaces by quitting them; nobody has a good plan for how basic jobs would replace this
And if you think this is a problem for the managers, just wait until you see what the employees have to put up with.
Some bosses are incompetent. Some are greedy. Some are downright abusive. Some don’t have any obvious flaw you can put your finger on, they just turn every single day into a miserable emotional grind. Sometimes the boss is fine, but the coworkers are creeps, or bullies, or don’t do their fair share. Sometimes the boss and the coworkers are both okay, but the job itself just isn’t suited to your personality and what you can manage.
In private industry, people cope by leaving their job and finding a better one. It’s not a perfect system. A lot of people are stuck in jobs they don’t like because they’re not sure they can find another, or because they don’t have enough money to last them through the interim. And this is one reason why poor people who can’t easily change jobs have worse working conditions than wealthier people who can. But everyone at least has the option in principle if their job becomes unbearable.
What about the people who can’t get any jobs besides the guaranteed basic ones? How do they deal with abusive working conditions?
Probably somebody will set up some system to let you quit one basic job and go to a different one in the same city. But probably it will end up being much more complicated than that. How do you deal with the guy who quits every job after a week or two, looking for the perfect cushy position? How do you deal with the case where there’s only one basic job available within a hundred miles? How do you deal with the case where everyone wants the same few really good jobs, and nobody wants to work at the awful abusive soup kitchen down the road?
People will set up systems to solve these problems, and the systems will be unwieldy and ineffective, just like the systems for switching public schools today, and just like all the other clever top-down socialist systems people invent to replace exit rights. Probably they’ll take the edge off some of these problems, but probably nobody will be truly satisfied with the results.
Basic income solves this problem. It doesn’t make anybody stay at a workplace they don’t like.
8. Basic income could fix private industry; basic jobs could destroy it
In my dreams, the government finds a way to provide a basic income at somewhere above subsistence level. The next day, every single person working an awful McJob quits, because there’s no reason to work there except not being able to subsist otherwise.
After that, one of two things happens. First, maybe McDonald’s makes a desperate effort to invent awesome robots that can serve food without human support. Society and Ronald McDonald share a drink together – McDonald’s has managed to remain a profitable company providing a valuable service, and poor people live comfortable lives without having to flip burgers eight hours a day.
Or maybe inventing robots is hard, and McDonald’s has to lure some people back. They raise pay and improve working conditions, until the prospect of working for McDonald’s and getting luxuries is better than the prospect of living off basic income and getting subsistence. Maybe McDonald’s has to raise prices; maybe they even have to close some stores. But again, something like McDonald’s continues to exist and workers are relatively well-off.
A poorly-planned basic jobs guarantee could make the problem worse. Suppose that the government decided to use its free labor to farm cows. This puts various private cow-farming companies out of business; after all, the government can pay its employees out of the welfare budget, but private companies have to pay employees out of revenue. Some of the unemployed cow-farmers go get a guaranteed basic job, putting further private companies out of work. And other unemployed cow-farmers go work at McDonald’s, driving up the supply of McDonald’s employees and so ensuring lower wages and worse conditions.
This isn’t to deny that a well-planned basic jobs guarantee could have the same effect as basic income; if the government jobs were better than McDonald’s’s, McDonald’s might have to raise wages and improve conditions to lure people back. The direction of the effect would depend on how good the government jobs are and how much they compete with private industry. I predict the government jobs will be very bad, and compete with private industry a lot, which makes me expect the effect will be negative.
9. Basic income supports personal development; basic jobs prevent it
I have a friend who was stuck on a dead-end career path. His job paid a decent amount, he just didn’t really like where it was going. So he saved up enough money to live on for a year, spent a year teaching himself coding, applied to a programming job, got it, and felt a lot more comfortable with his financial situation.
And I had a patient in a similar situation. Hated her job, really wanted to leave it, didn’t have enough skills to get anything else. So she went to night school, and – she found she couldn’t do it. After working 8 to 6 every day, her ability to go straight from a long day’s work to a long night’s studying just wasn’t in the cards. And her income didn’t give her the same opportunity to save up some money and take a year off. So she gave up and she still works at the job she hates. The end.
Basic income would give everyone who wants to work the same opportunity as my friend – the ability to take a year off, cultivate yourself, learn stuff, go to school, build your resume – without it being a financial disaster.
Basic jobs would leave everyone in the same position as my patient – forced to work 40+ hours a week, commute however many hours a week, good luck finding time to earn yourself a ticket out of that lifestyle while still staying sane.
There are more creative things you can do with time off work. Entrepreneurs like to talk about “runway” – how long can you keep burning through money before you run out and have to declare your new business a failure? Sometimes your runway is costs like renting an office or paying employees, but for small one-person businesses the question is usually “how long can I continue to live and feed myself working on this not-yet-profitable company?”
And poor people have runway issues of their own. One of the most common reasons poor people end up in crappy jobs is because they don’t have the luxury of a long job search. If your savings will only last you a month before you can’t make rent, you’re going to accept the first job that will take you and feel grateful for it. If you have a guaranteed income source, you can wait until somebody presents you with a better fit.
Basic income is unlimited runway. Entrepreneurs can feel free to try out crazy ideas without the constant pressure of losing their shirt; people in between jobs can feel free to spend time looking for options they can tolerate.
Basic jobs solves none of these problems, and maintains the time pressures that prevent people from exploring interesting ideas or realizing their full potential.
10. Basic income puts everyone on the same side; basic jobs preserve the poor-vs-the-rest-of-us dichotomy
Welfare users often talk about the stigma involved in getting welfare. Either other people make them feel like a parasite, or they just worry about it themselves. Basic jobs would be little different. There will be the well-off people with jobs producing useful goods and services. And there will be the people on guaranteed basic jobs, who know their paychecks are being subsidized by Society. In the worst case scenario, people complaining about workplace abuses at their guaranteed basic job will be told how lucky they are to have work at all.
Basic income breaks through that dichotomy. Everybody, from Warren Buffett to the lowliest beggar on the street, gets the same basic income. We assume Warren Buffett pays enough taxes that the program is a net negative for him, but taxes are complicated and this is hard to notice. Rich people are well aware they contribute more to the system than they get out. But they don’t think of it on the level of “I pay $340 in taxes to support my local police station, but only get $154.50 of police services. Meanwhile, Joe over there pays $80 in police taxes and gets $190 in police services. I hate him so much!”
There will be people on basic income who have no other source of money. There will be people who supplement it with odd jobs now and then. There will be people who work part-time but who plausibly still get more than they pay in taxes. There will be people who work full-time and maybe pay more than they get but aren’t really sure. At no point does a clear dichotomy between “those people getting welfare” and “the rest of us who support them” ever kick in.
11. Work sucks
Amidst all of these very specific complaints, I worry we’re losing site of the bigger picture, which is that work sucks. I have my dream job, the job I’ve been lusting after since I was ten years old, it’s going exactly as well as I expected – but I still Thank God It’s Friday just like everyone else.
And other people have it almost arbitrarily worse. Here are some of the cases you hear about several times a week doing psychiatry:
“I work really long days at my job. I have to deal with angry clients, bosses who don’t appreciate me, and coworkers who try to dump their work on me. By the time I get home after my hour-long commute, I’m too wiped to do anything other than make a microwave dinner and watch TV for an hour or two until I pass out. Then on the weekends I take care of business like grocery shopping, cleaning, and paying my bills. Then Monday comes around and I have to do it all over again. I feel like work drains all my energy and doesn’t leave me any time to be me. I used to play in a band, and we had dreams of making it big, but I had to quit because I don’t feel like I have time for it any more. It’s just work, go home, sleep, repeat.”
“I can’t stand the new open office plan. I feel like I’ve got to do work in the middle of a loud bar where everyone’s trying to talk over each other. Sometimes I hide in the janitorial closet just so I can concentrate for a couple of hours while I finish sometimes important. I’m afraid if anyone ever catches me doing that they’ll say I’m ‘not a team player’ and I’ll get written up, but I just can’t take being crammed together with all those people. Maybe if you gave me some Adderall I could focus better?”
“Sorry I haven’t seen you in a few months. My workplace says it gives time off for doctor’s appointments, but you still get in trouble for missing targets, and I just couldn’t find any time that works. I ran out of my medication a month ago and am having constant panic attacks, so if you could refill that right away it would be nice. And sorry, I need to go now, I’m actually calling you from the bathroom. I wanted to call you from the janitorial closet, but when I went in, there was a woman inside who mumbled something about the open office plan and accused me of distracting her.”
And the people with the worst jobs don’t have good enough time or money to see psychiatrists; I just never meet them. But I understand it gets pretty bad:
Amazon employee here. The post [The Undercover Author Who Discovered Amazon Warehouse Workers Were Peeing In Bottles Tells Us The Culture Was Like A Prison] is pretty spot on. They don’t monitor bathroom breaks, but your individual rate (or production goal) doesn’t account for bathroom breaks. Or let’s say there is a problem like you need two of something and there’s only one left, well you have to put on your “andon”, wait for someone to come “fix” for you, all the while your rate is dropping. The two most common reasons pepole get fired are not hitting rate, and attendance. They don’t really try to help you hit rate, they just fire and replace.
My first week there two pepole collapsed from dehydration. It’s so common place to see someone collapse that nobody is even shocked anymore. You’ll just hear a manager complain that he has to do some report now, while a couple of new pepole try to help the guy (veterans won’t risk helping becuse it drips rate). No sitting allowed, and there’s nowhere to sit anywhere except the break rooms. Before the robots (they call them kivas) pickers would regularly walk 10-15 miles a day, now it’s just stand for 10-12 hours a day.
People complain about the heat all the time but we just get told 80 degrees (Fahrenheit obviously) is a safe working temp. Sometimes they will pull out a thermometer, but even when it hits 85 they just say it’s fine.
There’s been deaths, at least one in my building… Amazon likes to keep it all hush hush. Heard about others, you can find the stories if you search for it, but Amazon does a good job burying it.
Every now and we have an inspection, where stuff like this should be caught and changed. But they just pretty it up. If the people doing the inspection looked at numbers on inspection day vs normal operation, they would see a massive difference… but no fucks given.
The truth is the warehouses operate at a loss most the time, Amazon literally can’t afford to pay the workers decent pay, and can’t afford to not work them to death. The entire business model is dependent on cheap (easily replacable) labor, which is why tier 1s are the bulk of the Amazon work force. My building has like 3-5k workers most the time and around 10-30k on the holiday (what they call peak). Almost all of that is tier 1, most states have 4-7 of these warehouses, and some like Texas and Arizona have tons more.
Next time you order something off Amazon, remember it was put in that box buy a guy sweating his ass off trying to put 100-250 things in a box per hour, for 10 hours a day or he will be fired, making about a dollar more than minimum wage. Might have even been a night shift guy, who goes to work at 630pm and gets off at 5am.
I 100% understand that advocates of basic jobs insist that they’ll be better than that, that they guarantee really good jobs in clean sunny offices where everybody has a smile in their face and is well-paid. I also understand they said the same thing about those DC public schools before throwing huge amounts of money at them. Forget promises; I care about incentives.
Either one of basic jobs or basic income could be potentially the costliest project the US government has ever attempted. Government projects usually end up cash-constrained, and the costliest one ever won’t be the exception. The pressure to cut corners will get overwhelming. It’s hard to cut corners on basic income – either citizens get their checks or they don’t. It’s simple to cut corners on basic jobs. You do it the same way Amazon does – you let working conditions degrade to intolerable levels. What are your workers going to do do? Quit? Neither Amazon nor government-guaranteed basic jobs need to worry about that – both know that their employees have no good alternatives.
Gathering a bunch of disempowered poor people in a place they’re not allowed to opt out of, with budget constraints on the whole enterprise, is basically the perfect recipe for ensuring miserable conditions. I refuse to believe that they will be much better than private industry; the best we can hope for is that they end up no worse. But the conditions in private industry are miserable, even for people with better resources and coping opportunities than basic jobs recipients are likely to have.
I grudgingly forgive capitalism the misery it causes, because it’s the engine that lifts countries out of poverty. It’s a precondition for a free and prosperous society; attempts to overthrow it have so consistently led to poverty, tyranny, or genocide that we no longer believe its proponents’ earnest oaths that this time they’ve got it right. For right now, there’s no good alternative.
But if we have a basic jobs guarantee, it will cause all the same misery, and I won’t forgive it. The flimsy justifications we can think up won’t be up to the task of justifying the vast suffering it will cause. We can’t excuse it as necessary to produce the goods and services we rely on. We can’t excuse it as a necessary condition for political freedom. If a worker asks “why?”, our only answer will be “because Cory Booker thought a basic jobs guarantee would play better among the electorate than basic income, now get back to packing boxes and collapsing from dehydration”. There will be an alternative: a basic income guarantee. We will have rejected it.
I feel like as a quasi-libertarian, I sometimes downplay how awful private industry, capitalism, and the modern workplace are. If so, I apologize. The only possible excuse for defending such a flood of misery is what inevitably happens when people meddle with it. But the price of such morally tenuous greater-good style reasoning is that you need to stay hyper-aware of times when you don’t need to defend the system, when there is a chance to do better without destroying everything. I think basic income is such a chance. And I think basic jobs are a tiny modification to the idea, which destroys its potential and perpetuates all the worst parts of the existing system.
It would be unfair to make this argument without responding to jobs’ proponents points, so I want to explain why I don’t think they provide a strong enough argument against. These will be from the Sarris piece. I don’t want to knock it too much, because it’s a really fair and well-written piece that presents the case for jobs about as well as it can be presented, and any snark I might give it below is totally undeserved and due to personal viciousness. But it argues:
i) Studies of UBI haven’t been very good, so we can’t know if it works.
Studying a UBI pilot with an end date is not studying UBI at all: It is instead studying a misnamed temporary cash payment. By the nature of pilots, the cohort’s behavior cannot reliably change to depend on UBI’s long term existence. No study yet has guaranteed a cohort money forever, and even if it did it would be difficult for a pilot to study the long term effects, some of which may be generations out. What pilot can tell us what its like for kids to grow up with parents who have never worked?[…]
Basic Job programs are more amenable to piloting and a gradual roll-out, since new clusters of jobs appear (and end) all the time. Piloting Basic Jobs can be tried in different communities with varying magnitudes. The legislation to justify such a pilot may already be in place[1], and even a pilot may have lasting benefits. What we learn from the pilot will be more applicable than studying temporary cash transfers in a community and expecting that knowledge to translate into society-wide UBI. If a pilot is successful, one can imagine a kind of National Civil Service, organized like existing federal programs such as the National Park Service, which can hire professionals to train and supervise projects.
I have some minor caveats – Alaska has had a (very small) universal basic income for some time, which seems to have worked relatively well. And basic job studies will also have trouble scaling; smaller trials might preferentially select the most functional unemployed people, would have less impact on private industry, and can always just dismiss people back to the general pool of the unemployed. But overall I agree with the point that basic income is a bigger change and we should be more suspicious of bigger changes.
But at some point you’re arguing against testing something because it’s untested. If we can’t 100% believe the results of small studies – and I agree that we can’t – our two options are to give up and never do anything that hasn’t already been done, or to occasionally take the leap towards larger studies. I think basic income is promising enough that we need to pursue the second. Sarris has already suggested he won’t trust anything that’s less than permanent and widespread, so let’s do an experiment that’s permanent and widespread.
ii) UBI gives everyone the same amount, but some people need more (for example, diabetics need more money to pay for insulin). Existing social programs like medical aid take this into account; UBI wouldn’t.
This seems like exactly the problem that insurance exists to solve. Bringing insurance into the picture, “everybody has to get this” switches from a negative to a positive.
I won’t speculate on how this will look, except to note that it would work well with some kind of mandate where the cost of a Medicare-like state insurance gets auto-deducted from your UBI. Since I’m quasi-libertarian, I would support people’s right to opt out of this, after signing and notarizing a bunch of forms with “I UNDERSTAND I AM AN IDIOT AND MIGHT DIE” on them in big red letters, but I understand other people might prefer to avoid the chance of moral hazard. It still seems like this problem is solvable.
iii) Somehow even if everyone has more money they won’t be better off
One of the biggest assumptions people make with UBI is that the problems of today and the near future are primarily ones of money. I don’t think the data supports this. [link to various charts showing that people generally have food and access to health care]
On some level, if you’re tempted to believe this you should find a poor person and ask them how they feel about being poor. I predict they will say it is bad. They will not agree that our society has basically solved all of its money-related problems. They will say there is a very real sense in which their money-related problems remain unsolved. I guarantee you they will have very strong feelings about this.
But that’s overly pat. A steelman of Sarris’ point might go something like this: it definitely seems true that there is some complicated way in which a family of eight living in a tiny farmhouse in the Kansas prairie in 1870 was happy and felt financially secure even though they probably only earned a few hundred dollars a year by today’s measures. So isn’t it weird that people earning twenty thousand dollars a year still think of material goods as their barrier to happiness?
I think explaining that effectively would require a book-length treatment. But I think the book would end with “even though it’s weird and complicated, poor people today who make $10,000 or $20,000 are often unhappy, in a way that richer people today aren’t, and this involves money in a real sense.”
I am not the person to write this book (though see the post on cost disease); I can only relay what poor people tell me. Sometimes it’s “my rent-controlled apartment is underneath noisy frat boys who keep me awake every night with their parties, but I can never leave because it’s the only apartment I can afford in this town.” Sometimes it’s “I hate my boss but I can’t leave because if I go a month without getting a paycheck I won’t have enough money for rent.” Sometimes it’s “I couldn’t afford good birth control, got pregnant, and now I can’t afford to support the child, what do I do?” Sometimes it’s “Obamacare mandates me to buy health insurance, but I can’t afford it, I guess I am going to have to pay a fee I can’t afford on tax day instead.” Sometimes it’s any of a thousand versions of “my car broke down and I can’t afford to get it fixed but I need to get to work somehow”. Sometimes it’s “I am sick but if I miss a day of work my company will fire me, because when you’re poor enough legally-enshrined workplace protections somehow fail to exist in real life”. And sometimes it’s “I work eighty hours a week driving for Uber because it’s the only way to make ends meet, I hate everything.” A lot of times it involves the same crappy job-centered lifestyle I worry a basic jobs guarantee would perpetuate forever.
Trying to steelman the “it’s not money” point further takes us to Sarris’ other essay on UBI, where he writes:
Rent is currently eating the world. Rental income just hit an all-time high. If everyone is given a very predictable amount of money, it may be seen as a system that can be gamed by landlords and maybe other essentials producers. Implementing UBI without reforming land use and zoning regulations may end up as nothing more than a slow transfer to landlords. What are the odds of that happening? Well, it seems like it already did happen with healthcare and college tuition (loans) in the US, and if those are our guide, the “money” part and the “meaningful reforms” part should be done in a very particular order.
Since housing does work well in some places (Japan and Montreal come to mind) I think this is a problem that can be fixed. But without the fix first, UBI may be punting real political problems while giving the appearance of solving them (until years later), and making the price inflation obvious for landlords, just like it was for healthcare companies and colleges getting guaranteed loans.
Payments as a solution to a broken system is not the same as fixing the system. If UBI punts this real problem, we’ll be creating a financial time bomb.
This is basically how I think about any request for giving more money to education or health care, so I guess I have to take it seriously. Maybe the situations aren’t exactly the same – education and health care seem to eat up money by hiring administrators, which doesn’t have an obvious analogy to ordinary individuals. But the Kansas farmhouse example suggests that something like this must go on even at the personal level.
It looks like probably what’s being described is that – absent some magical ability to create new houses out of thin air (a task known to be beyond the limits of modern technology) – housing is a positional good and so raising the position of everyone equally will just give extra cash to landlords. The best that can be said here is that insofar as these goods aren’t perfectly inelastic, basic income will help a little. And insofar as other goods used by poor people (cars? furniture? generic medications?) are decently elastic, basic income will help a lot. I do agree the problem exists.
But I think this is one case where basic income is clearly better than basic jobs. All basic jobs can do is give you money, which can get eaten by rent-seekers. Basic income gives you freedom. Somebody works 50 hours a week at two McJobs to afford an apartment, gets basic income, and then they work 20 hours a week at one McJob and afford their apartment. The price of an apartment doesn’t change, but their life has improved.
And by lowering the demand for jobs, basic income provides the seed of a solution to the housing problem. The reason rent costs so much in the Bay Area is because everyone wants to live in the Bay Area because it has so many great jobs. You can buy a house in the country (or in an unpopular city) for cheap; people don’t because the jobs aren’t as good, or the good jobs take longer to find. Freed from the need to live right in city center (or right next to the subway stop leading to city center), people can spread out again. If rent is $2000 in San Francisco and $500 in Walnut Creek, they can live in Walnut Creek (and still go to San Francisco whenever they want – cities are very accessible from suburbs, for every purpose except commuting during rush hour five days a week).
Go to the suburbs and people are building new housing tracts all the time. Supply is elastic and everyone’s backyards are so far away from one another that NIMBYs mostly stay quiet. It’s only when our job-centered culture forces everybody into historic San Francisco city center that we start having problems.
There’s still going to have to be a hard battle against cost disease. But much of the cost disease comes from overregulation and creeping socialism, and much of overregulation and creeping socialism come from well-intentioned concerns about the poor. Witness how California’s recent housing bill was opposed by socialists making vague warnings about “greedy developers”. If we can solve the non cost-disease-related parts of poverty first, maybe the socialists will lose some power and we can start fighting the cost disease problem in earnest.
iv) Without work, people will gradually lose meaning from their lives and become miserable
After claiming that money isn’t really a problem for most people, Sarris continues:
The biggest societal ill today is not that people don’t have enough money to survive, it is that to survive and thrive people need things beyond food and rent: Social responsibility, sense of purpose, community, meaningful ways to spend their time, nutrition education, and so on. If we fixate merely on the money aspect, we may be misdiagnosing what is making our 21st century so miserable for so many people.
From some psychologists’ points of view, one of the worst things you can do to someone who is suffering from addiction or loss of hope is to give them no-strings-attached money, when what they really need is regularity and the responsibility that comes from having a purpose, even if its simply a job or a station. Basic Jobs have a chance of making the opioid crisis better, UBI risks making it worse…the at-risk population in the US need functions and responsibility more than just a check.
Social responsibility. Sense of purpose. Community. Meaningful ways to spend your time. This is some big talk for promoting jobs that in real life are probably going to involve a lot of “Do you want fries with that?” Getting a sense of purpose from your job is a crapshoot at best. Getting a sense of purpose outside your job is a natural part of the human condition. The old joke goes that nobody says on their deathbed “I wish I’d spent more time at the office”, but the basic jobs argument seems to worry about exactly that.
And let’s make the hidden step in this argument explicit. Everyone on basic income will have the opportunity to work if they want. In fact, they’ll have more opportunity, since people who hate working will have dropped out of the workforce and demand for labor will rise. So the basic jobs argument isn’t just that people need and enjoy work. The argument is that people need and enjoy work, but also, they are too unaware to realize this, and will never get the work they secretly crave unless we force them into it.
That doesn’t seem right. I don’t know enough hopeless opiate addicts to contradict an apparent psychological consensus on them, but it seems to me a lot of people do perfectly well finding meaning on their own time.
What about the retired? The graph of happiness vs. age looks like this:
This is not the shape we would expect if stopping work suddenly made you miserable and deprived you of purpose. Retired people seem to avoid work just fine and have lots of fun golfing, watching golf tournaments, going on golf vacations, arguing about golf, and whatever else it is retired people do.
Sarris says that “If you think UBI would not make the opioid crisis worse, the onus is on UBI proponents to show how writing ‘UBI’ on the top of the check instead of ‘disability’ would do that.” I would counter-argue that the onus is on opponents to explain why writing ‘UBI’ on the check works so much worse than writing ‘Social Security’.
What about homemakers? Yes, homemaker is a full-time job. But it’s the full-time job a lot of people would do if they didn’t have to do their regular full-time job, which makes it fair game when we’re talking about basic income. Here’s a graph of male vs. female happiness over time:
If we assume most women in 1970 were homemakers, and most women in 2000 are working, their shift from homemaking to working doesn’t correspond to any improvement in happiness, either absolutely or relative to men.
There is some debate over whether modern-day homemakers are happier than modern-day workers or vice versa, with the most careful takes usually coming down to “people who prefer to stay home are happier staying home, people who prefer to work are happier working”. But there is no sign of the collapse in meaning and happiness we would expect in homemakers if not having an outside-the-house job reduces you to purposeless nihilism.
When I bring this up to people, they always have the same objection: “Didn’t women back then use lots of tranquilizers because of how stressed and upset they were? Didn’t they even call Valium ‘Mother’s Little Helper?'” Yes. But take it from a psychiatrist who prescribes them: people still use lots of tranquilizers. Nobody cares anymore, because it’s no longer surprising or ironic.
Sure glad that tranquilizer overuse problem got nipped in the bud in the 1970s when we cancelled stay-at-home parenting.
What about aristocrats? History presents us with many examples of entire classes who managed to live off other people’s work and avoid working themselves. These people seem to have not only have been pretty happy with the deal, but often used their free time to contribute in less purely economic ways. Lord Byron and Warner von Braun were hereditary barons, Bertrand Russell a hereditary earl, de Broglie a hereditary Duke, Condorcet and de Sade hereditary Marquises. Von Neumann’s family was some kind of nouveau riche Austro-Hungarian nobility; Wittgenstein’s family was something similar. Winston Churchill was grandson of a Duke and son of a Lord. None of them ever had to worry about money: society gave them a giant basic income check from their ancestral estates.
Yet Churchill found meaning by saving the UK. Von Braun found meaning by shooting missiles at the UK. Condorcet found meaning by becoming one of the foremost defenders of human rights. De Sade found meaning by becoming one of the foremost violators of human rights. De Broglie and von Neumann found meaning by contributing to fundamental physics. Russell and Wittgenstein found meaning by literally figuring out what meaning was. Overall they seem like a pretty flourishing bunch.
What about college students? Technically they have to go to classes, but a lot of them get away with ten hours or less of class per week, and even more of them just never attend. Some, like Mark Zuckerberg and Bill Gates, use the extra time to found startups. Others, like everyone else, use the extra time to party and take lots of drugs. Either way, they seem pretty happy.
What about the self-employed? Being self-employed costs you a lot of the supposed psychological benefits of work. You might not be leaving the house. You might not be interacting with other people. But studies find that the self-employed are happier than the other-employed, even though they work longer hours and have less job security.
What about hunter-gatherers? Hunting-gathering in a fertile area is a pretty good gig, and usually lets people support themselves with only a few hours’ work per day. Most evidence suggests they’re pretty happy despite their lack of material goods.
What about schoolchildren? Every year, I would complain that I hated school. Every year, my mother would repeat some platitude like “Oh, when summer comes around you’re going to be so bored that you’ll be begging to go back”. And every year, summer vacation would be amazing, and I would love it, and I would hate going back to school with every fiber of my being. I understand this is pretty much a consensus position among schoolchildren. This has left me forever skeptical of arguments of the form “Oh, if you had freedom you would hate it”.
What about me? When I graduated medical school, I applied to residency and was rejected. That left me with a year open before I could try again. Thanks to some odd jobs, a little savings, and charity from friends and family, I was able to subsist. I spent the year meeting new people, hiking around California, falling in love, studying philosophy, and starting this blog. At the end of the year I applied to residency again and was accepted. I’m glad I got the job I wanted, but I also remember that year fondly as maybe the best I’ve ever had, and the one that set the stage for a lot of the good things in my life that happened since. I think this is pretty common for well-off people. We call it a “gap year” or a “sabbatical” or “going off to find yourself” or any of a bunch of other terms that disguise how it’s about doing exactly what people say you can’t do – being happy without a 9 to 5 job.
When I bring these points up, basic jobs advocates usually find reasons to dismiss all of them. Schoolchildren and college students are at a special part of their life that doesn’t generalize. Homemakers like being with their kids. Aristocrats get the world as their oyster. Retirees are mysteriously and permanently mesmerized by golf, which becomes an ur-need subsuming all other human desires. Hunter-gatherers are evolutionarily adapted to their lifestyles. I am just weird. They dismiss all of these as irrelevant and go back to their core example: in the US, right now, unemployed and disabled people are terribly unhappy.
I accept the very many studies that show this, but I do wonder if this has more to do with contingent features of unemployment than with work being necessary to human flourishing. For example, unemployed people are chronically low on money. Unemployed people face stigma and constant social pressure to get employment. Unemployed people live in a society built around and emphasizing jobs. Unemployed people may have pre-existing problems in their lives that led to their unemployment. Unemployed people sometimes suffer from disabilities or chronic pain. Unemployed people have no friends to hang out with during business hours because everyone else is working.
If you compared gay vs. straight happiness in 1980, you probably would have found gay people were much less happy. Now some studies suggest that in liberal and accepting areas, they are as happy or happier. The relative happiness of different groups isn’t necessarily a human universal; it can also depend on how society treats them.
Given all this, I lean in favor of thinking most people would tolerate financially secure leisure time just fine. I might be wrong. But I am still more comfortable letting people decide for themselves. People who try leisure and like it – or who prefer homemaking, or taking care of elderly parents, or anything else – will stay out of the workforce. People who try leisure and don’t like it will apply for the new, better class of jobs that will exist once increased demand for labor has forced employers to up their standards. Or they’ll go volunteer at their church. Or they’ll start a nonprofit. Or they’ll do something ridiculous like try to be the first person to unicycle around the world.
Or maybe the meaninglessness of modern life will start to recede. Why don’t we have strong communities anymore? One reason I keep hearing from my patients is that they had lots of friends and family back home in Illinois or Virginia or wherever – but all the good jobs are in the Bay Area so now they live here and don’t know anybody. My own friends have managed to set up a halfway-decent semi-intentional community in California, but only because by a happy coincidence they all work in computers and all the good computer jobs are in the Bay. Freeing people from needing to orient their entire life around where they can get a job might lead to a lot more intentional communities like mine. Or it might lead to other things we can’t think of right now. A bunch of people with a lot of leisure time to throw at problems, and a bunch of people with money and a problem of meaningless, seems like a pretty good combination if you’re looking for meaning-as-a-service.
The best studies on homemakers find that women who want to be homemakers are happier as homemakers and sadder if forced to work, and women who want to work are happier as workers and sadder if forced to stay at home. I would not be surprised if there are some people who are happiest working, and others who are happiest pursuing leisure activities. A basic income would make it easier for both groups to get what they want.
v) If something went wrong, basic jobs programs could be more gracefully wound down.
What if it doesn’t work? What if we run out of jobs? Suppose a Basic Job program fails 20–30 years into the future. Maybe there’s too much corruption or not enough oversight, or the political will is no longer there, or the money itself is no longer there. Contingency planning is good: No matter how much you trust the pilot, you still want an airplane with emergency exits.
If this happens, the side effects seem less severe (or even mildly positive) when contrasted with a UBI failure. So what if we accidentally fund farms, and bakeries, and furniture production, and house construction, and all sorts of small scale crafts across the country? Even in pessimistic scenarios we can expect some of the businesses and functions built to continue serving their communities after an official program is gone, in the same way that the Hoover dam is still there. A Basic Job program can plan for contingencies and the divvying up of what’s been created, democratically, by community. Sheep farmers that are no longer supported by the government have at least got their flocks. If things ever go south, Basic Jobs better position us to try something else.
“So what if we accidentally fund farms?” asked Stalin, creating the kolkhozes. Maybe I am being mean here, but “let’s guarantee full employment by sticking poor laborers on a government farm somewhere and teaching them to till the earth” is a plan that ought to set off as many historical alarm bells as “let’s do something about all the Jews around here” or “let’s murder the Mongol trade delegation”.
True, nobody is proposing the other prong of socialist agricultural policy, which is crushing the private farms. But it’s important to remember that what’s being proposed is basically socializing large parts of the economy in ways that history tells us lead not only to agricultural catastrophe when being set up, but to economic ruin when being wound down:
In the 1990s, the GDP of Russia declined by 50%. Fifty percent! I don’t know if that’s ever happened before in history outside of a civil war or foreign invasion. The Iraqi economy survived the Iraq War and subsequent sectarian conflict better than the Russian economy survived winding down its basic jobs program.
Maybe I’m being unfair. Socializing part of the economy is probably safer than socializing all of it. And not crushing the private farms really does provide a safety valve that previous collectivization efforts lacked (though if the government farms are more subsidized than they are inefficient, you’ll crush the private farms whether you want to or not).
But I’m still not sure if unsocializing the economy is as easy as winding down a basic income. If you want to wind down a basic income, you decrease it by 5% per year, and each year more people go to work in the private sector or start training to do so. If you want to wind down a nationwide system of collective farms, you – well, empirically you flail about for a while, collapse into a set of breakaway republics, and end up getting ruled by Vladimir Putin.
vi) Basic jobs could be used to create useful infrastructure
Have the imagination to consider all of the work that is not being done, and FDR-style public works programs can be found almost everywhere. Building bicycle lane networks. Creating and maintaining public parks, flowerbeds, sidewalks. Demolition and recycling and re-urbanization (or re-forestation) of derelict factory grounds. There are so many things that would make parts of the US better places to live. As long as swaths of America are in disrepair and also where the jobs aren’t, Basic Jobs has a mission to fulfill.
Some of my concern here comes from my concern (mentioned above) that basic-job-havers would not be very good employees, and that you would probably save money by handing needy people a check and separately hiring some super-efficient megacorporation to make your flowerbeds.
But another part comes from asking myself – which would I rather have? More flowerbeds and sidewalks? Or forty extra hours a week to spend seeing friends and family, or pursuing hobbies that I love? Framed this way, the answer is super-obvious – and remember, I love my job.
vii) Capitalism seems to have historically worked pretty well, and basic jobs guarantees preserve the best features of capitalism
We want to try and keep [the] positive effect of capitalist economic transactions. UBI creates paychecks, Basic Jobs programs do too, but Basic Jobs also create transactions, incentives, and products, fulfilling secondary needs for society.
Basic Jobs can be thought of as a program that is paying people to make other people’s lives better in addition to their own. We are paying people to produce local food and crafts, in a subsidized fashion that gives communities an alternative to the WalMart-esque globalized marketplaces. If the government subsidizes the workers so that their goods can be competitive, it will foster local economies while putting money in the pockets of local worker who themselves have more power. Hopefully, the second-order effects of such commerce are large enough to notice. Maybe the benefits will stay. One could argue that the strong Swiss and other European agricultural subsidies are already a soft form of Basic Jobs.
“Capitalism” is a Rorschach test that means many things to many people. Some people think it means oppression, discrimination, and exploitation. Other people think it means any level of freedom better than you get in Maoist China. Still other people identify it with corporations, or banks, or barter, or any of a thousand other things. But to me, if capitalism means anything at all, it means…
Well, remember argument iv above? About how maybe poor people’s lives will be meaningless without work, and maybe they’re not sufficiently self-aware to realize that on their own, so the government should make them work for their own good, in whatever industry most needs their help?
To me, capitalism means shouting “FUCK YOU” at that argument, at the intuitions behind that argument, and at the whole social structure that makes those intuitions possible, then sterilizing the entire terrain with high-quality low-cost American-made salt so that no other argument like it can ever grow again. There are other parts of capitalism, like the stuff about stock exchanges, but they all flow from that basic urge.
Capitalism certainly doesn’t mean you should never get money without working. Heck, some leftists would define a capitalist as a person who gets money without working. The part where you get money without working is the fun part of capitalism. The thing where most people don’t get that is the part that could do with some fixing. That’s why a lot of history’s greatest capitalists (in both senses of the word) – from Friedrich Hayek and Milton Friedman to Mark Zuckerberg and Elon Musk – have supported basic income.
My intuitions are basically Georgist (note to self: read Henry George before saying this too many more times). Capitalists deserve to keep the value they create, but they also owe rent on common resources which they enclose and monopolize (eg land, raw materials). That rent gets paid to the State (as representative of the people who are denied use of the commons) in the form of taxes. The State then redistributes it to all the people who would otherwise be able to enjoy the monopolized resources – eg everybody. I think this process where businesses pay off the government for their raw materials is pretty similar to the process where they pay off the investors for their seed money, and that the whole thing fits within capitalism pretty nicely.
I don’t think the government taking a big role in the economy for Your Own Good can ever really fit within capitalism, at least not the parts of it that I consider valuable. I would consider a basic jobs guarantee, if it lasted, to be a victory for socialism over the parts of capitalism I hold dear – the final triumph of the old Soviet joke about how “We pretend to work, they pretend to pay us”. If you want an image of the future, imagine a glassy-eyed DMV employee staring at a clock, counting down the hours until she can go home – forever.
And that’s what we’re debating here – an image of the future. These basic guarantees always get brought up in the context of technological unemployment. I’ve looked into this before, and although I don’t think jobs are being destroyed per se, I think it’s definitely possible they’re getting worse for complicated reasons. So as more and more people start getting worse and worse jobs, we can choose one of two paths.
First, we can force more and more people into make-work low-paying government jobs. Extrapolate to the very far future, and 99% of the population will spend their time sending their kids off to daycare before a long day of digging ditches that a machine could have dug better, while 1% of people have amazing robot empires.
Second, we can try to break the link between toiling for someone else and being able to live. We can set some tax rate and promise that all revenue above some amount necessary to fund state functions will be redistributed as basic income. It’ll be pretty puny at first. But as GDP grows, more and more people will opt out of work. As the payments increase, we can gradually transfer various forms of welfare into insurance, and use the gains to grow the payments further. There will be plenty of well-paying jobs for whoever wants to keep working, and lives of leisure and enjoyment for the people who don’t. Robots will pick up the slack and keep the big corporations generating the value that gets siphoned off. Extrapolate to the very far future, and 99% of people live in constantly-improving comfort and freedom, while 1% of people have that plus amazing robot empires.
Both of these are kind of tame shock-level-zero visions. But they set the stage for whatever comes next. If we have genetically enhanced superchildren, or Hansonian em overlords, they’re going to inherit the same social structures that were on the scene when they got here. Whatever institutions we create to contain today’s disadvantaged will one day be used to contain us, when we’re disadvantaged in a much more fundamental way. I want those structures to be as autonomy-promoting as possible, for my own protection.
I grudgingly admit basic jobs would be an improvement over the status quo. But I’m really scared that it becomes so entrenched that we can never move on to anything better. Can anyone honestly look at the DC education system and say “Yeah, I’m glad we designed things that way”? Doesn’t matter; we’re never going to get rid of it; at this point complaining about it too much would send all the wrong tribal signals. Nothing short of a civil war is going to change it in any way beyond giving it more funding. I dread waking up in fifty years and finding the same is true of basic jobs.
This is what I mean by hijacking utopia. Basic income is a real shot at utopia. Basic jobs takes that energy and idealism, and redirects it to perpetuate some of the worst parts of the current system. It’s better than nothing. But not by much.
[EDIT: Sarris’ response, where he argues that I am comparing the most utopian formulation of basic income to a very practical ‘let’s get a few unemployed people back to work’ version of basic jobs.]
You could have written the same thing about Obamacare, so maybe taking the energy and idealism of radical proposals and redirecting them to perpetuate some of the worst parts of the current system is exactly the role of the center-left in American politics. And I say that as someone who is constitutionally wary of radical proposals.
The thing that you’re doing in this post is the very thing that our political system does so poorly: take a policy proposal and look at all the ways it might fail and consider whether that leaves us better or worse off than the status quo. That kind of thoughtful deliberation has become just plain passé. This won’t end well.
I think “something like McDonalds continues to exist” is a bit blasé, depending on the level of basic income “something like McDonalds” could easily mean all the McDonalds that serve areas with below-average incomes close and the rest turn into chipotle knockoffs without dollar menus, and all the people who normally eat there have to choose from worse or more expensive options. Maybe it doesn’t matter because their basic incomes leave them with enough spoons at the end of the day to eat something healthier, but it could also mean a dearth of services in low-income areas.
Yeah, I think this is an important point. A lot of what low income people consume is produced by other low income people. Ten thousand dollars a year erodes pretty rapidly if the people who make the market for entry-level commodities moves to the country and spend more time with their families.
What ends up happening is you get a lot of micro-business. Not even ‘small business “Jeanie finally opened that little restaurant she’s always wanted to run” small business’, but fruit stand small business that can be run on a shoe-string operational budget that trades almost entirely on cash cheap but time kind-of expensive specialization.
The big actors will sink fortunes into automation, because expensive labor requires highly productive capital to complement the labor and justify the cost, but it won’t be an instant or perfect transition and that’ll open space for Mulberry Street style ultra-small scale capitalism.
However, the problem is that such micro-businesses are currently illegal.
Edit: And not just “illegal de jure but this is not enforced”—actually really illegal, as in “the cops will absolutely come to your back yard and shut down your kid’s lemonade stand” (yes, really; click the links).
The other problem – and the reason they’re currently illegal – is that micro-businesses lead to micro-scale variations in quality and micro-scale food poisoning outbreaks. Before fast food brought uniform standards in quality, and before the modern regulatory state, we had “travelers’ diarrhea” where travelers would eat at unsanitary restaurants they weren’t used to, and travel guidebooks listing the types of sandwiches that were most likely to be clean.
Nowadays, we can handle it with local restaurants. We can’t handle it with backyard restaurants, because… well, do you know how clean your neighbors keep their kitchen? Do you want the health department to inspect it, and the hundreds of others across the city?
What percentage of all lemonade stands in the country do you believe are shut down by cops?
Is this actually true, though? I think food poisoning comes either from the supply chain or from people doing commercial food handling poorly. I’ve never gotten food poisoning from home cooked meals anywhere. The idea of getting food poisoning from lemonade or cookies seems laughable.
My very vague memory is that minor food poisoning is most common from home cooking. Which makes sense really. People probably cook more at home than eat out, and like you said no one inspects home kitchens. It doesn’t make the news though.
But I still eat at home anyways despite the elevated risk compared to restaurants. And on average, it seems unlikely that the typical meal I cook at home is doing much better on sanitation than when I buy cookies from some kid. There are limits; I’m not going to buy raw fish in the middle of summer from a street vendor, but lots of things are probably safe enough.
The risk is minor enough that I don’t think it’s the state’s business to prevent the harm here. Sure, don’t let people sell fugu on the street or set up a complete restaurant on the side of the road, but…
Lemonade seems like a relatively safe thing to me. Somewhat acidic and full of sugar. Of the things I could buy from random strangers with a roadside stand in the U.S., I’d only avoid meat and maybe a few other obvious items I’m forgetting even if I was being cautious.
I think that’s probably just because food poisoning is rare. If humans were seriously that vulnerable, we never would’ve made it to civilization in the first place.
The term “food poisoning” is somewhat ambiguous. It sounds as though it means something that can kill you, or close. But as I believe it is usually used, it includes something that gives you diarrhea for a day or so, which is a pretty minor adverse effect.
And one you might not actually link to the meal that caused it.
But McDonalds sacrifices money for time, because the poor are deprived even more of the time to make cheaper meal decision than they are of the money it’d save them.
The time UBI would afford the poor means they wouldn’t need the “cheap” fast food option.
Eating at McDonalds is actually associatedwith a middle class income (like $40-$60k/ year) as those are the people with enough money but no time.
“Poor people were actually less likely to eat fast food—and do so less frequently—than those in the middle class, and only a little more likely than the rich.”
Do the current unemployed cook at home rather than eating fast food–much more so than the currently employed?
McDonalds is, as I understand it, a kind of analgesic for a crappy life; you’re tired and strung out and don’t feel like cooking so you shove down this wad of salt, sugar, fat, and heavily processed things that might be slightly more nutritional than carcinogenic. Buying your own raw food and cooking it is always going to be cheaper than buying stuff somebody else has prepared and packaged, assuming ingredients of a similar quality and no goofy subsidies, and if you’re getting paid without working you might have the energy to do some minimal cookery. Or get a part-time job that isn’t back-breaking and using the little extra money plus your UBI to treat yourself to terrible McDonalds food now and then when you feel like perpetuating atrocities on your metabolism. If you’re not so stressed out that you feel the need to compulsively self-medicate via overeating, that could drive down your expenses as well. Honestly, “poor people will eat less McDonalds” sounds like a feature, not a bug.
It’s also road food for people who have decided to go out and do something, but didn’t plan ahead enough to pack a cooler, and are now hungry and crabby. Possibly it’s cold and windy, and there’s no close, cheap, open soup and sandwich place. Possibly they took public transport, and food was kind of heavy. But I expect that if fast food places ceased to exist those people (I’m one of them, as it happens) would adjust accordingly with packaged foodstuffs pre-stashed in the car, or buying cheese and sausages, or actually remembering to freeze the ice packs and assemble the sandwiches ahead of time. Possibly we will re-acquire a taste for room temperature pasteys, or have machines with toaster ovens inside, as in other places.
Just came back from a looooong road trip. We subsisted mostly off prepacked snacks, which are cheaper and waste less time. Stopped for dinner each night just because we got tired of snacks and we’d reached our hotel so the time waste didn’t matter. One of those meals was Chick-fil-A, but the rest of the time experimenting with local cuisine worked out fine. My youngest discovered he likes seaweed salad, and I now wish I’d tried bain mi earlier.
But, when I go on road trips, I often don’t want to waste a half-hour or hour at a sit-down restaurant for lunch. Yes, local cuisine can be a good thing – but fast food fills a real market nitch.
I’m really not sure how giving people in poor areas a ton of extra free money to spend could result in there being less services provided in their areas.
If people only work if the job is cushy and pays well, that would increase the price of the services to a point where people who live on basic income only can’t afford them.
There’s some confusion here between UBI and jobs guarantee.
In the first case: you give people lots of extra money for free, and (based on Scott’s hypothesis) many of them respond by stopping working in crappy jobs. Crappy jobs make up a lot of the labour associated with providing cheap products, so the price of those products goes up and/or their supply goes down.
It’s possible that the withdrawal of labour effects are small enough that the extra demand from the extra money offsets the quantity effects of reduced labour supply, but that can only happen if prices rise by a lot.
In the second case, it depends what the jobs are. If they are doing the same things as existing crappy jobs then they ought only to siphon of existing unemployed (or gray market) labour and to boost demand while leaving supply of inferior goods unaffected. If the jobs are appealing enough that they displace labour from crappy jobs then the outcome is similar to UBI as outlined above.
For a very small definition of “lots”, at least as a pre-singularity UBI is concerned. Below the poverty level in most versions, well below minimum wage for full-time employment.
Overall, there is no extra money–the UBI is coming from additional taxes or is money that would otherwise have gone to the federal programs that the UBI is supposed to replace.
Is your point that there is now more money for the sorts of people who eat at McDonalds, or buy other goods produced with low cost labor and sold largely to low income people?
Yes. The changes in demand may be sectoral (roughly speaking, they will disproportionately effect the demand for inferior goods), as may the changes in labour supply.
I think that if you sent each US citizen a check for $200 each week, most people would continue to work. In fact I think if you do such a UBI and eliminated the minimum wage and taxed away the UBI at a 50% rate men would still work. http://un-thought.blogspot.com/2014/08/basic-income-guarantee-again.html
The problems he missed with a job guarantee is that the feds would need to hire a lot of managers.
Now if you did something like biblical gleeing laws it might work. IE Putting a deposit of cans and bottles and encourage people to just drop them every where would NOT work but something along that line where no skill and very little discipline is required but you do have to do some work, might work.
Leviticus 23:22 22″‘When you reap the harvest of your land, do not reap to the very edges of your field or gather the gleanings of your harvest. Leave them for the poor and for the foreigner residing among you. I am the LORD your God.'”
Deuteronomy 24:19 19When you are harvesting in your field and you overlook a sheaf, do not go back to get it. Leave it for the foreigner, the fatherless and the widow, so that the LORD your God may bless you in all the work of your hands.
Technically speaking, what Milton Friedman advocated was a negative income tax, which (he thought, and I think) would be much more efficient than basic income – I don’t remember if these are his arguments, but the arguments I know for it are that the IRS can administer it with the resources it has without you needing a new bureaucracy, it doesn’t have the same distortionary effects that lump sum payment + percentage tax does, and it’s probably easier to pass through congress, since it looks as though it costs less and doesn’t have the words ‘increasing taxes’ in it.
Every time this comes up I think that they sound like exactly the same thing. Or, more precisely, “negative income tax” sounds like a way to implement and/or frame a basic income. What do you see as the difference? Aren’t they both just different ways of saying you that on an income of x you get to keep y = mx + b dollars and b is allowed to be positive?
I used to have this confusion too. Speaking at a high level, they are pretty much the same, and the equations you provided are a concise way to phrase the effect of both.
The main difference is that discussing it in terms of NIT neatly skips over a lot of the objections that people raise to flat UBIs that are abstractly and
mathematically (but not logistically or politically) trivial. Many of these focus on how to get to the new policy position from where we are now. For example, people ask both about how a flat UBI would be funded and why rich people should receive a UBI. Given that the tax load to fund a basic income plan would likely fall on the upper percentiles or deciles, a flat UBI + an increase in marginal tax rates works out to a lump sum tax cut for high-earners and a marginal tax increase. Adding negative tax brackets at the bottom of the existing system and modifying top marginal rates is a simpler way to handle this and extends gracefully from the current system instead of having to work awkwardly alongside it.
In the example above, the NIT approach has the logistical advantage of the bureaucracy and systems we already have handling it more easily. And the political advantage of the net cost of the basic income guarantee looking far smaller than for flat UBI, since we’re not including the lump sum payments to upper-income people (that are more than offset by their marginal tax increases).
Practically maybe, but the elegance of a lump sum plus a flat marginal tax (or at least fairly flat) is likely the better design. With the lump sum and the flat marginal tax, average tax paid will be increasing with income which conforms to a lot of people’s sense of fairness. At the same time there are no cliffs in the disincentives to work either coming from the increase in marginal rates you mentioned or the necessary phase out of the negative income tax. For practical purposes a reduction of a benefit that is tied to income is a marginal tax increase. For examples see here
https://johnhcochrane.blogspot.com/2012/11/taxes-and-cliffs.html
What you’re describing (that it’s easier to sell to people if you frame it that way, and that we get to reuse existing bureaucracies) still sounds to me like an implementation detail of a concept rather than a distinction between two distinct concepts. In fact, several of your arguments explicitly compare a NIT to a vague something else, claiming that the NIT works better, but my position which you’re ostensibly trying to debate is that a NIT is a form of basic income. I’m left still confused about why people are saying it isn’t.
One key difference is how it scales. You can write a law that redistributes all tax revenue above $2tr equally to all US citizens, but you’re going to have a harder time writing a law that does the equivalent by modifying tax rates. (And yes, I can do the algebra. Now try writing it as a law in a way that doesn’t have everyone unsure what their tax rate will be next year.)
>. What you’re describing (that it’s easier to sell to people if you frame it that way, and that we get to reuse existing bureaucracies) still sounds to me like an implementation detail of a concept rather than a distinction between two distinct concepts.
Yes, this was effectively the whole point of my comment. As I said, this distinction used to confuse me too, until I realized that people who raised it were simply discussing it at a different level than I, that of implementation details.
The NIT vs flat UBI distinction bores me to tears, mainly because we’re not yet discussing it in contexts where having any basic income at all is taken for granted as the right course of action. Picking out the color of the bikeshed seems premature to me when we haven’t yet decided to build the plant or not. My comment was just intended to help you understand what people mean by bringing it up, since understanding it was useful for me.
> In fact, several of your arguments explicitly compare a NIT to a vague something else, claiming that the NIT works better
This is incorrect. I explicitly mention a flat UBI multiple times in my comment. That is, a lumpsum payment to all people vs negative income tax brackets (which means payments to only those who make a certain amount). As I’ve said a couple times, at the high-level, these are mathematically the same, and the difference lies in the implementation and political details.
> my position which you’re ostensibly trying to debate
Wrong again. I wasn’t trying to debate your position, since I hold pretty much the same position. I was trying to help you understand where those people are coming from and what they’re focusing on.
>. is that a NIT is a form of basic income.
This is certainly how I and much of what I’ve read use the term. But UBI is commonly understood as a _universal_ flat income, provided to all, regardless of income[1]. People saying “NIT, not UBI” could probably be a little more precise and say “NIT, not a flat UBI”, but it’s not terribly difficult to understand what they mean when they don’t.
[1] Yes I know this is an implementation detail, since it hinges on refusing to net taxes and transfers for those with positive income. But the whole point is that impl details is what these people are focusing on.
I see. I mean, I already understood that though, and the part I don’t understand is saying stuff like “Milton Friedman advocated a NIT and definitely not UBI”. Nevertheless I appreciate the explanation and I’m sorry for misinterpreting your point.
We already have the IRS sending some people more money than they put in (mostly through the Earned Income Tax Credit), and it’s not a great way of doing it. A large portion of the money goes to the private companies that people have to hire to help them with all the forms. I know this because I worked for one of those companies a few years ago. Many of our clients couldn’t afford the fee up front (a couple hundred dollars if you’re claiming the EITC because it requires more forms) so the IRS would send us the client’s “refund” and we’d send the client a check minus our fee. The fee ate a huge part of the benefit, but they were willing to pay it because without hiring the company they’d get nothing.
One of the benefits of UBI is simplification, so if people are still hiring third parties to help them, it is being done wrong.
That’s my point; if we’re going to do UBI, it shouldn’t be NIT because it shouldn’t be plugged into the existing tax system.
Because? It’s unfixable?
I volunteer with the VITA program, and I agree. I was shocked to see how many of our clients were lost on relatively simple tax situations – just a W2, the Earned Income Tax Credit, and maybe a Child Tax Credit. We always try to walk the client through the form at the end, but I’m afraid too much of it just goes over their heads.
Part of the reason for all the forms is that the tax code as a whole is excessively complicated; this is theoretically fixable (though neither party seems interested). The other reason is that EITC comes with a requirement to prove you’re eligible, which means additional forms. I figure NIT would come with similar requirements. The simpler “mail everyone the same check” version of UBI would give you less to prove.
I had this issue for a while too. I reached the conclusion that it’s a purely a symbolic/PR difference.
In this instance, how you call it may matter politically, though. Say, you call it negative income tax, or something like “unconditional benefits”. If it turns out that it’s a bad idea, and means-tested benefits work better, it can be phased out relatively easily. Call it universal basic income, and before long, people will get used to the notion that they have a right to an unconditional income, and it will be politically unfeasible to phase it out.
For a comparison, until the early 20th century, there was no such thing as income tax, corporate tax or sales tax/VAT, government spending was minimal, and there was no income redistribution. The US was already democratic in the 19th century (modulo black people and women). So why didn’t the poor (who outnumbered the rich) vote to have government services and benefits for them from the pockets of the rich? I guess it simply didn’t occur to anyone that it would be right to take part of someone’s income, and give it to others. Everyone, including the poor, assumed that if one person made a little money, and another made a lot, each of them would get to spend whatever they made.
Then once an income tax was introduced, within decades it reached sky high levels (even higher than today). Most people would now consider zero redistribution to be unfair. Many people consider various government services that require taxation and redistribution to be rights; several human rights treaties and many countries’ constitutions endorse this view.
Today most people don’t think that UBI is a basic right. But I’m afraid that a basic income (assuming it’s fiscally feasible at all, which I doubt it is) would run a similar course, leading to a second explosion of redistribution. Politicians would compete to increase it, and (particularly as the next generation grows up used to it) it would become entrenched and impossible to undo, even if it turns out to be very damaging to the economy.
If I recall, the vote in the 19th century was limited to landowners. The poor people didn’t own land, hence wouldn’t have a vote, so they couldn’t vote to redistribute wealth.
Not really for most of the nineteenth century. By the 1830’s, pretty much every state had expanded the vote to all white men over age 21. I have to agree with 10240: they just didn’t think it was right.
I guess it simply didn’t occur to anyone that it would be right to take part of someone’s income, and give it to others.
Except that Great Britain had instituted it before the Americas were discovered. Certainly the 19th century America heard enough of the “poor rates” and the like to get the concept.
I don’t think so. The Old Poor Law was passed under Elizabeth, and the Wiki article traces its origins back only to 1536.
I will cheerfully point out that it’s certainly within the ballpark and far close than the claim it was not until after the 19th century. 0:)
UBI is giving every citizen, say, $1500/month out of tax money, no questions asked, no bureaucracy.
Negative income tax means that if your income is 0, your tax is -$1500/month. If it’s $1000/month it might be -$1200/month (30% marginal tax), and at some income level, your tax rate becomes positive and things are more recognizable. This requires IRS type bureaucracy and enforcement, but so does UBI, since the money has to come from somewhere.
Now, you can argue, as I think scmccarthy does, that this is just an accounting difference. In the UBI scenario, if you consider the UBI and the income tax as one system, it’s pretty much a negative income tax system with a different terminology.
I think that’s a good point, but there are also substantial differences between the two systems that makes them not really interchangeable. I’ll leave exploring those as an exercise for my readers 🙂
no questions asked, no bureaucracy
Here’s the problem. A UBI might make sense as long as it is a completely flat-rate amount with no special carve-outs etc. In the real world, the ink would scarcely be dry on the Universal Basic Income Act before the media began finding hard cases (THE VICTIMS OF UBI). Those hard cases would then become a political cause. Within a few years (if not months) there would be special rules, and additional forms, and carve-outs for favoured groups, etc. Result – within 5 years, the UBI will become as complex, frustrating, time-wasting and perverse as the existing tax-and-benefits system.
I don’t think this scenario is escapable. Nice idea, wrong species.
Let’s say to solve healthcare, so that no one has to face an unexpected bill. What other
inequalities of need would be
left?
Right. One serious problem with UBI is that it’s politically impossible. The current system exists because it reflects the political strength of the various groups it benefits.
Those groups will be as strong the day after UBI is magically decreed into existence.
One big difference between UBI and a negative income tax is that UBI probably arrives as a biweekly or even weekly payment, and a negative income tax payment probably arrives once a year in April.
Many people don’t seem to have sufficient executive function – or other skills – to make a yearly payment last the full 12 months.
I think this would matter a lot for how these worked out in practice.
(My apologies for not having statistics or studies to cite. It’s based on personal observation.)
>Many people don’t seem to have sufficient executive function – or other skills – to make a yearly payment last the full 12 months.
Or predictability in their lives and finances, which is worth mentioning.
| Or predictability in their lives and finances, which is worth mentioning.
The two are somewhat related. When budgetting, you need to avoid the trap of imagining a perfect month, when nothing goes wrong – that month essentially never happens in practice. No matter how impossibly tight the budget, the only way to make money last is to plan on a large proportion (e.g. 10%) going to savings/contingency. This is apparantly very hard to do.
FWIW, I once found myself living on less $ per month than a (Canadian) welfare payment. Perhaps unsurprisingly, many of my neighbours/social connections were on welfare. They all thought I was living on notably more than they were, because I didn’t have a lean week at the end of the month, and they always did. (Or perhaps it was because I had more possessions, or a higher class style; always hard to tell what signals people are really responding to.)
At the time, I thought this made me better (or at least smarter, or more skilled) than them. I’ve since changed my mind – I had *different* rather than *more* cultural capital, and also the common belief that the skills emphasized in one’s own upbringing are more important than those not so emphasized.
I think this is a point worth pushing. It’s not just that many people wouldn’t be able to handle getting a year’s salary all at once and making it last a full year, almost no one would be able to handle this. I couldn’t find a decent (read: not an internet poll) source for this in a few minutes and I no longer have journal access, but some tremendous amount of Americans live paycheck to paycheck, going through cycles of riches after payday and poverty for the rest of the money. This isn’t just the poor, it’s the middle class and upper-middle class as well. It’s most people reading this blog, most college graduates, most engineers and managers. If you drop a year’s salary on someone, they will spend it long before the year is up.
I mean, we could just send people their refunds in 12 checks instead of one. But people would hate that because it would feel like having money withheld from them.
The EITC is your tax return distributed to you paycheck-by-paycheck. While there are all sorts of bad ideas on this thread, we know how to give people money in a piecemeal format successfully.
Yes, distribution throughout the year is important. It can also be done through the tax code. Milton Friedman’s NIT incorporated such a plan.
The biggest problem is for people with uneven incomes (which would likely be a greater percentage of the population in the future with a UBI and with the gig economy). Milton’s idea was to have people submit a tax form monthly for expected income. The government would then distribute a NIT check if needed, and any over/under payment would be figured into the next month’s estimate.
That sounds like a bureaucratic nightmare to me (even as a tax accountant). Far easier in my mind to simply cut everyone a same-size check, then collect taxes as per our established methods.
Sounds almost exactly like the ACA exchange subsidy system, except that here the overpayments are only demanded back at income tax time every year. From my experience volunteering with the VITA income tax prep program, the users see it as fairly opaque. Only a few expressed frustration with it on the front end, but a lot more must’ve underestimated their income up front because they were shocked to have to pay back some of the subsidy at tax time.
Yes, and if there ever is a UBI, I would want it to trickle into an account at $1.50 every hour for as long as you are alive. That way, even if someone blew all of their money, they could wait an hour and pay for the bus ride home or a burrito at Taco Bell. When an income is perfectly predictable, there is no longer any good technological reason to release it in big, irregular lumps.
Indeed. Implement postal banking, give everyone a debit card for their postal bank account, and made deposits into the postal bank account more or less continuously as you suggest. Linking it to postal banking also solves the various problems of the unbanked population in the same move (if it is the way to get access to the basic income, nobody is going to fail to sign up for their postal bank account).
The additional benefit includes close to 100% government transaction tracking for large swathes of the population.
There’s also the fact that collecting UBI likely requires filling out at most one very simple form, while collecting benefits implemented through the tax system involves all the complexities and middle men discussed upthread. Taken together, these two arguments are in my view the strongest reasons to choose UBI over NIT, but I’m still not sure which to prefer.
I don’t think you argued this well enough. Why do you think it would be an improvement over the status quo?
No, that is not how Marxists define capitalists. Can you quote Marx (or any Marxists) as saying this?
I think that he is referring to something like this: https://en.wikipedia.org/wiki/Rentier_capitalism
The article contains this quote from Lenin:
That’s a description of rent and the role of finance capital in imperialism, not a definition of capitalists.
I can’t tell if I’m missing something or if you’re just playing some strange word game.
What you’re missing is that Lenin is describing just one stratum of the capitalist class – finance capital. This is extremely obvious if you’ve actually read the piece (have you?)
If Scott is using a Marxist definition of rentiers to generalize to capitalism as a whole then he is sadly mistaken. A closer reading of Lenin, or knowing the basics of Marxism, would have prevented people from making this error.
It might be worth outlining the significance of this distinction for Scott’s argument.
If your point is simply “I have read Marx in much more detail than you”, then I’m happy to stipulate to that on behalf of the commentariat and to offer the appropriate level of congratulations.
I haven’t read the piece. And I’m not claiming any expertise on Marxism. I legitimately trying to understand your objection.
If your point that rentier capitalism only describes one discrete class of capitalist, then I take your point. Honestly, though, it seems pedantic.
@ pd barnsley
It is only significant in that Scott Alexander consistently misrepresents Marxism on his blog and seems to have very little idea what Marxism is. When giving a Marxist definition of “capitalists”, he should probably have some idea what the Marxist definition of a capitalist is. This does not seem unreasonable to me. In fact, it seems like a fairly standard requirement if one is ever going to have a good faith discussion with Marxists.
@ jr
It’s not pedantic… the Marxist definition of capitalist is fairly central to the Marxist critique of capitalism. Scott Alexander, by giving a faulty definition, has basically admitted that he either does not understand Marxism or is deliberately misrepresenting Marxism.
I’ve noticed that Scott Alexander has edited his post on the basis of my critique to now read:
To which I can ask, which leftists? Scott Alexander has changed from “Marxists” to the weasel words “some leftists”. Who is that? Is Scott Alexander approaching leftist philosophy and political economy in good faith? Who is he referring to here? Does he have a particular quote in mind from “some leftists”?
@marxbro
What is the marxist definition of a capitalist? You seem to know or have expertise on it, but instead have spent your time trying to belittle and demean everyone else who has put forth their idea.
I don’t have a good idea of what a marxist defines as a capitalist, let me know.
@marxbro
It would probably have been more accurate to say that receiving rents without working is part of the definition of one segment of the capitalist class.
If this post was actually trying to engage with Marxism, “have a good faith discussion with Marxists” as you put it, that would be a crucial distinction. As it is, though, it’s a tangent of a tangent of the actual point being made.
The correction itself would still be welcome in any case – precision is good – but the aggressive condescension seems pointless. I’m not saying this just to be a dick. I’m saying it because I want Marxism to get a fair hearing, and the tendency of many Marxists to default to performatively aggressive “correction” of perceived errors is a frustrating impediment to that goal.
(This fault is obviously not peculiar to Marxists. Some SJWs display the same tendency; so, in my unfortunate experience, do many traditionalist Catholics.)
But also, Scott’s definition of capitalists doesn’t seem too far off from Wiki’s: “The owners of the means of production (capitalists) are the dominant class (bourgeoisie) who derive their income from the surplus product produced by the workers and appropriated freely by the capitalists.”
@marxbro
I’m kind of a Marxist (and definitely a leftist) and I think Scott’s description works pretty well as a not-totally-distorting simplification of my definition of the capitalist class. I agree with Scott’s edit; the initial statement was too strong, but I think it’s fine now.
Vol 1, ch. 4 of “Capital” has an explicit definition of what Marx meant by “capitalist.”
[My bolding and bracketed editorial comments.]
My interpretation:
1. Marx is constructing a very abstract and pure definition of a capitalist that few concrete human beings could live up to. That’s Marx’s method. He sets up the abstract, ideal forms first, and then evaluates the extent to which messy concrete reality measures up to these ideal forms, and he discovers what sorts of qualifications and complications he needs to introduce to make these ideal forms more representative of empirical reality.
Most modern Americans are probably used to the opposite process of observing many concrete examples and using induction to form abstract principles that connect and explain those messy concrete examples. The way modern Americans think, their mental flow chart would look like:
1. Identify which people are colloquially called “capitalists” (i.e. take the received social definition of these people as a given).
2. Identify which characteristics these people share.
3. Use these shared characteristics to generalize about which properties of capitalists and capitalism are incidental and variable, and which properties of capitalists and capitalism are abstractly essential and consistent.
Marx worked in the opposite direction, from the abstract to the concrete. Marx does not take received social definitions of people, things, or systems as a given or as necessarily illuminating or accurate. It is these very understandings that Marx wants to interrogate, based on his default suspicion that these understandings are conveniently molded by pre-existing material interests.
When Marx says, “Use-values must therefore never be looked upon as the real aim of the capitalist…The restless never-ending process of profit-making alone is what he aims at.” Marx is not claiming anything about the motives of any real, concrete human beings. If you assume that Marx is, then it becomes very easy to misread Marx as someone making moral complaints about “greedy capitalists being too greedy,” which verges on anti-Semitism by pinning the problem on the subjective intentions of a group of people rather than the structural constraints of capital, under which even the capitalists must work and which the capitalists must serve and personify if they want capital to reward them. Capital, that algorithm that optimizes for the endless increase of exchange-value in the abstract, is what is in control, not any flesh-and-blood people.
Marx is unconcerned here about helping people to identify who is a capitalist and who is not. He’s not looking to help people win the blame game or the victim/oppressor Olympics. None of that idpol crap. Marx here is specifying his definition, his ideal form of a capitalist in order to understand which factors about capitalism are essential, unchanging, unchangeable, and fundamental…so much so that he basically rules out the possibility that any real human being would perfectly fit this definition of a capitalist. After all, even the most thrifty, penny-pinching capitalist probably buys and consumes some use-values for him/herself from time to time that are not strictly necessary for either his/her own maintenance or the expansion of the exchange-value under his/her own control. Insofar as they buy in order to consume use-values for themselves, they are not a capitalist. Likewise, insofar as they do not buy anything at all, but rather just hoard their exchange-value as misers, they are not capitalists in this case either, regardless of how much exchange-value they might be hoarding. So, neither Smaug nor lottery winners who piddle away their winnings on the consumption of use-values are capitalists. A capitalist is simply someone who uses a given sum of money M to obtain more money M’.
Elsewhere, as marxbro has helpfully pointed out, Marx further distinguishes between three sub-types of capitalist: money/finance capitalists, whose circuit of capital looks like M–>M’, merchant capitalists whose circuit of capital looks like M–>C–>M’, and industrial capitalists, whose circuit of capital looks like M–>C–>P–>C’–>M’.
Industrial capitalists are important because they supervise the creation of surplus value, whereas on their own finance capitalists and merchant capitalists merely re-arrange value. Holding M constant in aggregate, a finance capitalist can only achieve M–>M’ if the debtor or someone else loses M. The same with the merchant capitalist. For every person buying low and selling high, there must be a counterpart buying high and someone selling low. Whereas industrial capitalists, in production, supervise the creation of new M (concretely so in the case of gold mining capitalists) or supervise the creation of new value that is exchangeable for M.
@orgodaud
I would say a good definition of a capitalist is a person who owns the means of production, who buys labour-power (and can therefore expropriate surplus value), who puts capital in motion (the M to M’ circuits citizencokane wrote about). Importantly for Marx, these economic roles are simply social relations – a capitalist can easily fall into the ranks of the proletariat.
One slight disagreement with cokane I have is the formulation of merchant capital. If we look at Marx’s contention, the only commodity that can produce surplus value is labour-power, a merchant is only really shifting value around and in a perfect capitalist world there would be no profit in this. Of course, in the real world there are plenty of powerful merchants that make plenty of profit (siphoning off value), so this is really a very minor quibble. I’m not as familiar with Marx’s statements on merchant capital so I could be wrong though.
Here’s a few short pieces that might help you understand the Marxist way of thinking about capitalists (and proletarians!)
The first five sections of Engels’ Principles of Communism
https://www.marxists.org/archive/marx/works/1847/11/prin-com.htm
The first chapter of Marx & Engels’ Communist Manifesto, “Bourgeois and Proletarians”
https://www.marxists.org/archive/marx/works/1848/communist-manifesto/ch01.htm#007
Sorry if I came off as cranky, it’s just simple definition stuff that annoys me. Marx’s point was not that capitalists never work. It’s just irrelevant his larger analysis.
@Marxbro
I don’t think we are in disagreement here. I think if you re-read my previous comment, you’ll notice I say that only the full circuit of M–>C–>P–>C’–>M’ produces surplus value. This also happens to be the only circuit in which labor-power is purchased by the capitalist and put to work.
You make a great point, Marxbro, about how individuals can fulfill multiple roles at the same time. Many capitalists also happen to be active foremen, managers, etc., and so some of their earnings come from that and would be lessened to the extent that they hired someone else to perform those functions (thus becoming more of a pure capitalist living off profit).
Likewise, great point that nobody is permanently a capitalist forever. We should not essentialize these identities as saying anything profound about the individuals themselves. Social roles come and go. Failure to understand this leads to the type of thinking that imagines “Jewish bankers” as being malevolent in some essentialist way even when they have long ceased to perform the role of a capitalist and have instead been starving in a concentration camp for several years. Likewise with Kulaks. They do not remain forever tainted with some essence of “Kulakism” once they stop performing that social role. For example, the various legal disadvantages placed on kulaks were lifted in the 1936 Stalin Constitution under the theory that all of the kulaks who could learn to be ordinary workers had done so, and all who couldn’t had been imprisoned. The book “Another View of Stalin” talks about other ways in which kulaks who initially disobeyed the law were given second chances. This is in stark contrast to what I hear about the North Korean legal system, which (allegedly) imprisons multiple generations for a crime.
It’s actually funny. He thought that’s what Marx said about Capitalists… It’s actually what Adam Smith said about Rentier’s (landlords). But then again Smith would probably be a socialist compared to this version of crony capitalism we have.
Not a socialist. A moderate libertarian.
The page you link to is correct in quoting Smith as arguing that land rent was the most suitable thing to tax–but that’s part of a very long discussion of taxation, in which the first maxim is that the incidence of taxation should be proportional to income:
Not a socialist maxim.
And he was not, as the page seems to be claiming, a follower of the physiocrats:
Hunter-gatherers and schoolchildren aside, the rest of those groups are cognitively and culturally above-average – high-IQ, relatively good impulse control, know how to behave socially acceptably and not come off as a lout, etc, so they can think of ways to amuse themselves, and even when they don’t, we’re not worried that they’ll become a problem for their neighbors. People closer to the “GRAAAAGH” end of the spectrum are less good at directing themselves towards flourishing, and past a certain point, idle hands might be the devil’s plaything. Of course, there’s not much job-specific dignity in “Do you want fries with that?”, but there is some to having a job in general – “I support myself by being productive”. (What matters is the intuitive feeling of productivity, not whether the job is actually productive, so that job-guarantee jobs would fail the market test doesn’t matter much.) If nothing else, jobs would make people follow a regular sleeping schedule, which is itself good.
I’m not sure how decisive these concerns are. Though ultimately I’m against both, I’d still prefer a UBI over a jobs guarantee, because it’s a less heavy-handed intervention, jobs are a stressor, etc. First, it’s best not to appease demands for dignity, for the same reason one shouldn’t give into claims of offense. Second, even if it’s not a demand, it’s a bad idea to make policies based on dignity – it makes sense to say that if you’re hungry or lacking other necessities, we’ll help, but if you’re generically emotionally dissatisfied and feel low-status, that’s a personal psychological problem. Also, it’s a rather amorphous target – one day unemployment is a source of indignity, another it’s human genetic modification, and so on. Third, we should avoid restricting people who choose rightly for the sake of those who choose wrongly, sacrificing the relatively virtuous to the relatively vicious, etc – e.g. “if you can’t handle being free, that’s your problem, not mine”.
People on the “GRAAAAGH” end of the spectrum are already unemployed, they’re on disability or even homeless. So any problems arising from idle hands is likely to already exist; but UBI would mean they can at least have a more comfortable unemployment and just maybe a chance to better themselves.
Or at least more efficiently keep them out of sight and earshot.
That seems true to why the large family in the tiny Kansas farmhouse might be happier than a materially better off single mom and kids in the projects. The Kansas farmers get to construct their own tiny social order of man, then woman, then children, then animals to their satisfaction, with perhaps a couple of other families who are in a free and equal social relationship, and the satisfaction of being the conquering people enjoying their manifest destiny. If others in their tiny church keep trying to shame them, they can just split off and form an even tinier Second Church of the True Faith. But that doesn’t transfer very well to high density societies.
It’s possible to imagine more of the “yurt on a mesa” unsocial people with their one dog under them situations (I’ve encountered some earth ships for grumpy old veterans projects, for instance), though it wouldn’t be great to have human waste and garbage all over the place and plants getting indiscriminately burned for fuel, as might happen.
I read “Doing the Best I Can” and that’s not what I came away with. I would have said ( and IIRC the authors say near the beginning of the book) that in the absence of a culture of steady work, these fathers have redefined “being a good father” not as “being a good provider” but as someone who stays in their kids’ lives, regardless of how much money they have or their relationship with the child’s mother. The book was about how difficult even that low bar is to clear, given the (often self-inflicted) instability of their lives.
I guess in that regard it’s a good study of a sub-culture that has found meaning without work.
Fantastic article, I only have one small quibble. Amazon is relentless with their employees because they’re so competitive. Jobs guarantee programs would be anticompetitive so we probabaly wouldn’t see anything like that. In fact it would probably be the opposite where there is too little to do and a lot of it is pointless busy work, like in high school. I think that actually makes your argument more poignant.
Amazon is bitchy to all their workers for essentially ideological reasons. – that is, management believes being maximally exploitative is the way to succeed, and the facts can go hang.
Its not good labor management by any standard – it causes immense turnover and loyalty problems from hell, but since Amazon is safely ensconced at a shelling point for internet commerce, the fact that their labor practices are sub-optimal does not matter, you cant start up “Nile.com” and out compete amazon by having slightly more humane HR practices and consequently a more productive workforce, because work-force productivity is not Amazons competitive advantage – Being the shelling point for buying stuff from the net is.
Maybe they are aiming to go full robot.
Almost every business is, whether they know it or not. Every business that uses computers is aiming to reduce human labor. As soon as a computer or robot can do the same work a human can do for less cost, the human is out, and once a job is gone that way, it’s gone for good. Companies that don’t operate that way and have to face competition from companies that do are going to go extinct, sooner or later.
I’d argue that’s most, not every. Some people are using computers to augment human ability to do what isn’t possible otherwise. Things like CGI that can do stuff that practical effects can’t, large computational simulations of whether patterns that simply couldn’t be done by all the humans on earth spending 24/7 doing it, instantaneous international communications, HD video streaming, etc.
But your point stands for almost everything.
I think what 1Z meant was that maybe Amazon is explicitly planning to replace human laborers with robots in the medium-term future. Thus they:
1) Are treating their human laborers more like they plan to treat robots, that is to say with brutal unconcern and high replaceability, and
2) Have little or no interest in long-term retention of a labor force they’re hoping they won’t actually need in ten years.
By way of comparison, this also appears to basically be Uber’s business model. Uber is tripping up over the fact that the “cut legal corners to grow quickly” business model gets more people upset when you do it as a robot car manufacturer than when you do it as a glorified taxi company. Amazon may be able to get away with it.
Now, lots of companies are willing to automate tasks robots can do better than human beings- but not all companies design their entire business model around “we’re only using meatbags to do this job until we don’t need them any more, and as a way to temporarily work some of the bugs out of our distribution system that’s intended to accommodate our future robot minions.”
I don’t think this follows from “planning to replace human workers with robots”. You could be the best boss in the world and still be willing to buy robots if they were cheaper or did a better job.
Little or no interest in long-term retention, okay, that follows. But good luck finding a company that is interested, these days.
There’s a weak version of what Cecil is talking about even in more traditional office jobs- most of what I use computer automation for *could* theoretically be done by humans, but would take prohibitively long- I’d need a workforce of 60, which is nowhere near profitable, so in pre-automation companies that work simply doesn’t get done.
Another thing to consider is that virtually all of Uber’s vehicles are visible in public, which is kind of necessary to have a taxi-like business. In contrast, most of the Amazon workers we are talking about here work behind the scenes in a warehouse.
If you’re driving down the road and see a large warehouse you have little idea if it’s full of thousands of soon-to-be-replaced human workers, or if it’s a long-term storage facility with 2 security guards and a forklift driver. Making substantial changes out of the public eye is much less likely to result in political backlash.
Nornagest, it’s a matter of degree.
Firstly, I’m trying hard to draw a distinction, or rather a continuum, between “company that will replace workers with robots when the math supports doing so” and “company whose entire business model is built around preparing, pioneering, and implementing the transition from human to robot labor.”
Just about every corporation matches the first description. Not a lot of corporations match the second. McDonald’s, for instance, has been operating on essentially the same business model since the 1970s or so; it is not specifically set up to pioneer the transition from human-staffed restaurants to automatic restaurants. And yet, some time in the next 10-15 years we WILL see a fully automatic McDonald’s.
By contrast, Uber’s business model is explicitly built around automating one side of the taxi industry (dispatching taxis) and given the focus they’ve put into self-driving cars it’s fairly clear that they’ve been planning all along to automate the other (driving people around). Uber isn’t a normal taxi company that “ascended” into a partially automated one the way McDonalds might “ascend” into having automated kiosks take your orders while human beings prepare the food. Uber was designed to automate the taxi industry all along.
What I’m getting at is that while no company is strongly interested in retention these days, there is an extra-double-plus-low incentive towards retention and good working conditions in cases where the company is explicitly planning to automate just as soon as their own R&D branch works the bugs out, and has been more or less since they were founded. If Amazon plans to automate its warehouses within the next five years, it matters even less than normal whether their warehouses get a reputation as the worst sweatshop hellholes since the Triangle Shirtwaist Factory, because by the time that reputation impacts their bottom line the robots have already taken over the job.
None of this negates the reality that normal companies can, do, and will employ automation wherever they see fit. Or the reality that corporations have been valuing retention less and less.
In certain countries they already have such kiosks.
There’s no actual need for a Schelling point to buy things, because it is very rare that two people need to purchase something from the same online store but can’t communicate about which online store to buy it from. If there’s a big pile of money Amazon is leaving on the ground, you should expect WalMart or Alibaba to pick it up.
Agreed. It doesn’t look like Amazon is significantly losing market share so I doubt this is the case. It would be nice to believe that being too exploitative is actually against the corporations interest but the world doesn’t work like that. Retail is incredibly competitive and while Amazon has market power, they don’t have the kind of network effects that Facebook does. Being exploitative is part of how they are so efficient and make the service better for customers.
It seems like the big problem that Amazon faces is that there’s not really anything keeping me locked into Amazon–I can decide I want to shop online somewhere else, and it costs me basically nothing to do so. So a competitor could take away its business very quickly. It wouldn’t be the least bit surprising for Wal-Mart to take half of Amazon’s current market share in non-book products in a couple years, for example.
By contrast, when you’re dealing with physical stores, you have a built-in advantage. Amazon can eat some of Wal-Mart’s market share, but actually taking away all their business would probably require building local stores (or getting *really fast* delivery, like a couple hours from ordering to arrival).
That’s what Prime is for. If you’re going to buy even a few things from Amazon—whether that’s physical products or Amazon Video-exclusive shows—it makes sense to get a Prime membership. But once you have a Prime membership, it makes sense to make as many of your purchases as possible through Amazon, because if you went anywhere else you’d have to pay more.
What about a seller and a dozen buyers? I’m an author who might be self-publishing something next year. I don’t want to manage three dozen separate E-book vendors, so I’m probably just going to go with Amazon and rest secure that the vast majority of interested readers will be able to find it there.
Or, what about a buyer with limited energy? Last month, my grandma was looking for some books. She didn’t want to spend the time to browse a dozen websites looking for the best deals – she probably doesn’t know the internet well enough to do that even if she wanted to, or well enough to tell which websites are trustworthy. So, she just went to Amazon (technically, asked me to go to Amazon using her account when I was over for dinner) and bought them there.
Multiply that by three hundred million Americans; Amazon has a huge advantage.
That’s what Booko is for. (But I agree with your general point.)
It takes all of five minutes to set up a Walmart account. There’s no more significant barrier to entry there than to Amazon. If Amazon was a worse deal then it would be extremely easy for the average person to switch.
@Wrong Species, that’s the case if the average person knew Amazon to be a worse deal in general. How often does the average person even check Walmart before buying something from Amazon?
If Walmart had consistently lower online prices than Amazon they would advertise this fact.
There is some inelasticity to a known vs unknown brand but it’s not as much as you’re making it out to be. If it was, then no one would ever switch retailers. If Amazon was consistently worse than the alternatives, people would find out and defect. There’s no sign at all that’s happening.
Amazon is a middleman between suppliers and customers. As such, it acts as a Schelling point: if you are a supplier you will sell your products at Amazon rather than UnknownStore.com because UnknownStore.com hardly has any customers, if you are a customer you will buy things at Amazon rather than UnknownStore.com because UnknownStore.com hardly has any products.
Moreover Amazon has economies of scale which make it more productive just by being bigger. Even if its practices are suboptimal compared to those of a theoretical competitor of equal size, that competitor can’t arise.
Alibaba dominates the online retail market in China; taking over Amazon’s position in the US would probably involve some pretty impressive hijinks to overcome the “all our infrastructure is on the wrong continental landmass” barrier to entry. Conversely, I bet Amazon would have a hard time becoming China’s leading online retailer by now.
Walmart might be able to outcompete Amazon with better worker treatment, but we’ll probably never know because Walmart ALSO has bad worker treatment. If, hypothetically, better treatment would benefit them, that doesn’t mean they’ll do enough of it to detect the effect.
Oligopoly and oligopsony are fairly stable conditions for a market, in an environment where small startups are at a disadvantage compared to the first few big names to move in on an industry. And the set of competing corporations in an oligopoly aren’t necessarily going to span the full vector space of “ways to run a corporation in this industry” well enough to check up on all the possible ways to outcompete whoever’s in the head of the pack.
1. Worker treatment has nothing to do with why Walmart is falling behind. I’m not sure why you think it is.
2. Walmart has been raising their wages fairly dramatically the last couple years. Whether that is helping is ambiguous.
3. If the stories about Amazon are representative, working conditions at Amazon are far worse. No one at Walmart is peeing in a bottle.
Unless the bureaucrats running the government job sites are incentivized to make them productive, especially if ‘productivity’ is measured with dumb, easily-gamed metrics.
I think Scott’s argument here is basically that basic job workers are easily exploitable because they have no alternative, and any worker that is exploitable should expect to get exploited as long as their bosses have any incentive at all to do so (and that incentive could be as simple as sheer sadism).
Well they have the alternative of getting another job or, you know, since the job is guaranteed, just not doing anything or doing a horrible job.
All the other guaranteed jobs are subject to the same incentive structure.
By happy coincidence some of them will be nice places to work, and these places will be much sought-after among the small minority of unemployed people who are able-bodied and able to join the program rather than, say, look after aging grannies.
Others… will not be such nice places to work. It’s not that ALL the “universal basic job” worksites will be horrible. It’s that ENOUGH of them will that the program will be responsible for a large amount of human misery that could be productively avoided by just writing the poor bastards a check for the money you’d have paid them anyway.
I mean, the concept of a place where you toil at a makework job because you cannot otherwise support yourself isn’t actually new. And those old British workhouses were infamous for poor labor conditions (“Please sir, I want some more”).
Free daycare for everyone is such a terrible idea. It’s basically screaming at parents to institutionalize your children from birth and get back to work.
I think that you’re right but in the opposite direction. It’s mostly parents (or a certain class of parents) screaming at the state to institutionalize their kids, so that those parents can get back to subsuming their identities into their jobs.
That certain class of parents is rather small. On the way to my office every day I pass the cube farm where a hundred people, 90% women, sit on the phone all day yelling at insurance companies. These women are not subsuming their identities into their jobs. They’ve all got pictures of their kids on their desks. I’m pretty sure I know where they would rather be.
Really, my experience is the opposite. Lots of moms stay home longer than they want because they don’t want to look like a bad mother, then come back to work and make some comments feigning missing their kids, then behind close doors they say what a relief it is to be back because they aren’t one of *those* kind of women that loves changing diapers and talking nonsense to an infant. And they insist that their live-in nanny *is* one of those kind of women, and their child is better off with a woman like that.
Given, I live in the NY metro area, and salaries are high here, and families on two incomes even with minimal skills can do well in office work. The corollary is that families like mine struggle quite a bit to just keep two cars running, because my wife stays home with the kids, and though I’m well paid, I’m competing for housing with families that have double our income or more.
Live-in nanny is significantly different from day care. I used to drop my kids off at day care for 10 hours a day and it didn’t feel good. I told myself the science said it was fine but subsequently I have seen some stuff that raises doubts about that.
@Cecil
I don’t have a problem with nannies. The idea that you need to spend every non-working moment with your child is a bizarrely modern one. I have a strong distaste for the nanny state apparatus and free daycare strongly disincentives people who choose other options, whether it’s them or a nanny looking after the kid.
My question is what do those women do? I bet it’s not something as menial as call center work.
Ok, but what socioeconomic bracket does this put people in? Top 1%? I’ve rarely met people with this arrangement, and I’m upper middle class.
And most people have an infant for what? A couple years if they have one kid, twice that if they have two. Kids live for decades you know. Just because a few women in the throes of the worst part of dealing with children don’t like it doesn’t mean much about how they’ll feel about their children after their kids stop shitting themselves.
I don’t think this group or this time period of life is very representative overall of how much people love jobs vs kids. Anyone know any surveys?
I hate it when men come back to work after their children are born and talk about how they “like their careers” or “don’t want to be stay-at-home dads” or “are grateful that someone else is taking on primary childcare duties”. Clearly they don’t care about their children.
What do you think primary school is?
Wait, we think that stops at primary school?
What’s the difference between automatically deducting some of people’s UBI to pay for government health insurance that will then support the disabled, and paying people a lower UBI and using the savings to pay for a disability-benefits program?
How does that differ from a fully taxpayer funded system?
Ability to opt out.
You can do the equivalent of “opting out” of health insurance even in the latter case by betting someone that you will never be diabetic etc.
Hiding the costs for those of us who aren’t relying on UBI and so aren’t looking at the exact number we get, sort of like Social Security and Medicaid taxes are currently hidden in salary figures. “UBI is X, and oh by the way we’ve also got disability insurance” sounds better than “UBI is (X-N), and we’re also funding this disability insurance program.”
For the same reason, I prefer to not deduct it. Let us face the costs up front.
I think the insurance will cover all types of medical emergencies and costs, not just disabilities. So they both solve the disabilities problem but the insurance has other benefits.
People see it and have the ability to know what is happening. Better would be to end payroll deductions and make EVERYONE write quarterly payments to the IRS.
To quote Ronaldus Magnus: “Taxes should hurt”. By which he meant you should have to actually write the check for them come tax time (not have them automatically deducted), not that they should be high enough to be painful.
I think basic jobs for unemployable people is going to end up just like in USSR, many workers who are not even expected to turn up (probably lying in a ditch while drunk) but still working “on paper” and manager doesn’t care about that because they are more effort than worth.
Which reduces to the case of “Basically a UBI, unless you’re scrupulous”. Honestly not the worst outcome IMO, and maybe even a promising approach to backdooring in a UBI.
That’s a really really awful way to get to UBI. You’re spending tons of money and creating a system that rewards slackers and liars and locks honest people into hellish jobs under managers with perverse incentives.
Plus, people will keep pointing at the slackers as a reason you should shut the system down because why are we giving these people money again?
***Slow clap***
Most compelling piece of the year on SSC.
There’s also some extra catastrophic risk insurance from UBI (but not jobs guarantee) as follows:
Have you ever been to a medieval re-enactment? You have some people doing actual blacksmithing, some people making oaken barrels, etc. One feature these people have in common is that they tend to be in early retirement, and presumably learned to smith and stave in their abundant free time. Of course, these are worthless skills *now*, but in a hypothetical future where everything goes to shit I’ll be glad that there is someone out there who can make a barrel without an integrated global supply chain. And a world with UBI is a world where a lot more people learn obsolete but apocalypse-proof crafts in their spare time.
I feel like this is probably a benefit for a UBI, but at the same time I don’t think it would hold much weight in a policy debate. If anything it’s the kind of thing that would be likely to get you dismissed as loony and out-of-touch, which is a shame. Interest in apocalypse-proofing the species tends to vary wildly depending on how you’re proposing to do it.
Aside: This is a premise of SM Stirling’s excellent Change series (where all technology past about 1300 AD stops working due to the operation of a Plot Device). First-world countries are likely to have more people who maintain the old skills out of their excess resources than third-world countries, where people are surviving on thinner margins.
Basic income cuts the Gordian knot by proposing that everyone is entitled to support
But it isn’t true that everyone is entitled to support. What basic income is really saying is that, even though not everyone is entitled to support, we’re going to give it to them anyway, because it’s easier than trying to sort out who is and who isn’t. I think at least a considerable part of the resistance to basic income comes from its proponents being unwilling to acknowledge this rather unpleasant fact.
I think I mean “legally entitled” in that sentence. Maybe I’ll make that clearer.
That just changes the description to “we’re going to declare that everyone is legally entitled to support, whether they are morally entitled to it or not”. It doesn’t change the substance of what’s happening.
The substance of what’s happening is that, after taxes, poor people get money from the system and non-poor people pay into the system. Which is similar to other welfare schemes such as food stamps or unemployment benefits, with some more flexibility. The main difference is how exactly the accounting is being done.
The main difference is how exactly the accounting is being done.
No, the main difference is the justification. If welfare is based on some conception of need, that’s one thing. If it’s based on everybody just getting a payment regardless of any other factors, that’s a very different thing.
What is “need”?
God I wish people would get the stupid idea that federal taxes pay for anything out of their heads. We left the gold standard in the 70’s and with it that sad justification. The Federal government can print as many bonds or as many dollars as it wants to with the only limit being real resources (oil, labor, ect). Every dollar in taxes you pay ceases to exist. Every time the federal government spends money, that is brand new money it just created. The national debt is just how much money the government has given to the private sector.
Do not mistake the ramblings of a bored, ideologically crazed billionaire for actual fact. MMT is a fringe theory and one that fails to rise above the level of ‘everything that is original is not true, and everything that is true is not original’.
Now you have piqued my curiousity. What billionaire is a believer in the version of MMT being proclaimed here?
Mosler himself, although it seems I mis-remembered — He is ‘merely’ a multi-millionaire.
They always resort to ad hominem when they don’t want to admit you are right.
A multimillionaire who just happened to make his money on the principles of MMT. He made money knowing that Italy wouldn’t default on bonds denominated in Lira. (before they joined the Euro).
Also, it’s insulting to act like I’m incapable of independent thought and I’m just being led around by some rich guy. The mainstream models of Econ are horribly wrong and everyone knows it. The model MMT operates on is the only one that is internally consistent.
If the mainstream models of Econ are horribly wrong and everyone knows it, then they wouldn’t be mainstream. Or perhaps everyone but mainstream economists knows it and they are all very very stupid, or perhaps everybody knows it and the mainstream economists are all lying, but those would be exceedingly insulting things to say or even imply.
Given a choice between insulting you, and going along with you insulting most of the world’s economists, plan A seems simplest and also least likely to cause unjust injury, and you really haven’t met the burden of convincing any of us on plan B.
@John Schilling
Yes, because the mainstream of a field has never been wrong and stayed mainstream due to institutional inertia or the fact that they happen to be wrong in ways that keeps certain people rich or prominent. After all, we know ulcers are caused by stress and there is adult neurogenesis right?
Here are people inside the mainstream pointing out the emperor has no clothes:
Kocherlakota
Blanchard
Roamer.
Paul Romer, former World Bank president, is the one most accessible to the layperson and also the most damning.
@userfriendlyy
>Paul Romer, former World Bank president, is the one most accessible to the layperson and also the most damning.
As a layperson: the link isn’t very accessible, therefore I have no idea how damning it is.
I feel like if these people are so clever to see through the economic system, they should also be clever enough to communicate what they see more simply.
Whether people are entitled to support or not is a question entirely separate from the question of “how do we decide who starves?”
When someone spends their UBI on [something besides food] and has no money left to spend on food for their family, what do you do?
I evaluate whether there is an unmet need more basic than food, whether there is, in fact, food available on the markets accessible to the person, and whether they even qualify as an agent to begin with.
Confusion is not the same thing as moral hazard.
Presumably what we do currently. Provide temporary assistance through charity services. If there is a repeated pattern resulting in a nutritional deficit for dependents the state would presumably get involved through child or adult protective services to intervene on their behalf. If an adult without dependents squanders their funds to such a degree that they are at risk of starvation they will almost certainly come into contact with the medical system, which would likely deem them gravely impaired at which point the state would probably get involved and assign a case manager or gaurdian.
Calling a complex moral judgment unpleasant doesn’t make it a “fact”. I think everyone is entitled to support. It’s a thing about human dignity. This is one basis for a moral argument for UBI (and also “living wages”).
(Though yes it is clear in context SSC meant legal entitlement.)
You might think everyone is morally entitled to support. But not everyone does. I don’t. I’m not even confident that a majority of voters in the US do. So if the law ends up declaring by fiat that everyone is legally entitled to support, that’s just one more reason for people who disagree with that moral judgment to lose confidence in the political process that produced that law. We have far too much of that in the US as it is.
My awareness of the existence of moral disagreement was precisely my basis for objecting to your use of the term “fact”. The relationship between legal and moral norms is itself a complex subject (for one view see here) and many of the arguments for UBI do not stem from a sense of moral entitlement. In general I agree it is good practical politics for law not to appear to express moral judgements with which most people disagree, and a strain of liberalism attempts to get law out of the business of morals entirely by being neutral with respect to moral judgements apart from those which seem to follow from certain minimal premisses about free and equal people. It’s not clear to me that either side of that sentence applies to a UBI. That is, I believe a lot of people think everyone deserves support (it’s a basic tenet of Christianity for one thing); and I am not sure that the most minimal premisses do not require something like a UBI (consider its popularity among libertarians).
I did not use the term “fact” to refer to my own, or anyone’s moral judgment. I used it to refer to the fact that the people who are pushing basic income are not being explicit about what they are doing: *they* are trying to make statements like “everyone is entitled to support” as though they were facts, instead of their own opinions that they are trying to get translated into laws that everyone has to obey.
The opinions in question don’t have to be moral judgments, btw. Scott’s own justification for basic income doesn’t look like a moral judgment as much as a pragmatic one: basically, as I said in my original response to him, that it’s easier to just give everybody a basic income without asking whether they’re entitled to it, than to try to figure out who’s entitled and who isn’t. But phrasing that as “everyone is entitled to support” obfuscates that. (That’s true even if we interpret “entitled” in a legal rather than a moral sense, as I said in my response to Scott responding to me.)
I think that you are probably trolling me.
I think that you are probably trolling me.
No, I’m clearing up your misunderstanding of what I was referring to as a “fact” in the post of mine that you originally responded to. You said I was calling a complex moral judgment a fact. That’s not what I was calling a fact. I completely agree that there is a lot of moral disagreement in this area, and you appear to agree that the law should not try to legislate a particular position in an area where there is a lot of moral disagreement.
I am not sure that the most minimal premisses do not require something like a UBI (consider its popularity among libertarians).
This would certainly be a more interesting discussion. Are there particular libertarian arguments you can provide links to?
By the principle of relevance, you were saying this about Scott. But Scott didn’t present it as a fact, he presented it as a proposition, which he attributed to supporters of UBI. He did imply that he agreed with this proposition, but that’s not the same thing as presenting it as a fact.
If you google libertarian basic income you will find many arguments for (and against) it from libertarian perspectives.
I think everyone is entitled to support.
Then you believe in slavery.
Some of us have a thing about human dignity. The idea that an adult human being of sound mind and body has the right to live off the labor of others without their consent denies dignity to both sides.
In turn, the resistance to the resistance to basic income comes from two points.
One is that armchair types have been overestimating the number of able-bodied willfully idle layabouts in the general population for a LONG time. Most people who aren’t working, or who would be likely to be useless layabouts* under UBI, are already not working as it stands. People who are so marginally motivated that only the fear of starvation
Which is a higher priority: taking care of all the people who can’t work or desperately want to do something more fulfilling and more socially useful than a menial job**, and giving them a way out? Or making sure that no matter what else is horrible about our society, by God we’re sure no undeserving lazy jackass is getting any of our hard-earned money?
How much human suffering should we accept, as the price of being absolutely certain that none of our charity falls into the hands of a person who could conceivably be working their ass off?
I feel like this entire ethical system is based around the assumption that if we don’t all work our asses off, we’re doomed, so we have to build up a huge engine of social enforcement to force everyone to work super-hard to avoid total annihilation by famine or disaster. And that really isn’t true anymore. On the one hand, automation means that we really, really should be able to sustain a comfortable population on the labor of a fraction of that population- or that we soon will be. And on the other, advancing technology and tighter legal requirements mean that more and more people simply cannot contribute usefully to the economy. Making them work their asses off doesn’t benefit us; we can either hand them UBI checks or take them out back and have them shot for the crime of insufficient productivity.
Defining our priorities matters here.
___________________
*(as opposed to stay-at-home parents, caretakers for relatives, or artists and scholars whose work doesn’t make a profit but has value even if not cash value)
**(such as stay-at-home parenting, caretaking for relatives, art and scholarship
Most people who aren’t working, or who would be likely to be useless layabouts* under UBI, are already not working as it stands.
This is an extremely strong claim for which I would need to see extremely strong evidence. I personally think it’s false; I think there are many people currently working who would choose not to work if they had their basic needs met without working. (For a similar opinion, see aphyer’s post elsewhere in this thread.)
automation means that we really, really should be able to sustain a comfortable population on the labor of a fraction of that population
We are already doing that. Only a very small fraction of the working population is working on providing the minimal basic needs: food, clothing, and shelter. If you throw in health care, then yes, a substantially larger fraction is working on it, but at least in the US, that’s a product of extremely perverse incentives that are very difficult politically to dislodge. And health care is much, much less automated than, for example, food or clothing production. Housing, in the US, is also much less automated than it could be, again because of a combination of extremely perverse incentives that are very difficult politically to dislodge.
The more important point, though, is that neither basic income nor basic jobs fixes any of those perverse incentives; in fact they are likely to make them worse.
advancing technology and tighter legal requirements mean that more and more people simply cannot contribute usefully to the economy
It seems to me that you are shifting your definition of “usefully”. If, as you claim in your footnotes, stay-at-home parenting, caretaking for relatives, artistic expression, and scholarship have value, then people doing those things are contributing usefully to the economy. Economic value does not have to mean cash value; it’s whatever is of value to us humans. And advancing technology, at least, *helps* people to do those things more effectively. Ask anyone who has had to caretake a relative how much they would value a robot that could reliably take care of all the repetitive and unpleasant tasks involved, leaving the human with more time and energy to do the things that matter, like emotional support and connection.
As for tighter legal requirements, if those are preventing people from adding value, they are costing more than they are worth and should be removed. Legal requirements aren’t laws of physics; we humans can change them.
Defining our priorities matters here.
Yes, it certainly does. And just accepting that advancing technology and legal requirements are inevitable and oh, well, we’ll just have to accept that people are becoming less and less useful, does not strike me as a good definition of priorities.
Most people are working and still can’t meet their basic needs because we live in a corrupt oligarchy. Because Obama was just as far right as Reagan, he specifically opted out of public finance for his campaign so wall street could throw more money at him and all he did was prop them right back up and refused to write down any of mainstreet debt. We don’t have a functioning economy because the FIRE sector ate it..
Almost Half Of US Families Can’t Afford Basics Like Rent And Food
You are being very deceptive. Your link shows that some people have defined a ‘survival budget’ that is fairly high and then they argue that many people earn less.
However, this budget includes a lot more than just rent and food (which is where you are being quite deceptive). It’s pretty obvious that half of the US is neither homeless or starving, so this kind of deceptiveness seems rather dumb, because the persuasiveness of your deception is presumably quite low.
Wow, you totally owned me. Some people are doing slightly better than homeless and starving. Why don’t these poor people just admit their lives are perfect already.
Doubling down on emotional manipulation doesn’t make you more persuasive.
Less like this, please.
userfriendlyyy is banned
Okay, may I amend the claim? I have a more fundamental argument here.
Consider the people who, given a UBI, would stop working entirely, and be useless layabouts, as opposed to contributing to society in someway not accurately measured by GDP such as “be a stay-at-home parent.”
I submit that by and large, these are not very productive members of our society as it stands. They include the unmotivated,
These are not groups of people who add much value to society. They are working at crappy McJobs to avoid starvation, or by sitting at a DMV counter for twenty years making the life hell for everyone who needs a driver’s license. As Scott pointed out, it is entirely possible for the marginal value of a worker’s labor to be much lower than their salary would suggest. Even if the marginal value of their labor isn’t a net negative to the employer, it can be a net negative to society at large through externalities. Think of every obstructionist bureaucrat you’ve ever narrowly avoided a coronary dealing with. Think of employees who make shoddy products that break easily because they don’t care, relying on the mass of other, competent workers to hide the poor quality of their own output.
We’re talking about people who not only aren’t motivated enough to value their jobs for their own sake, but who also aren’t even motivated by “I need this job to make MORE THAN subsistence wages,” and who would rather just sit on their butts with their subsistence UBI all day.
These are not, to put it mildly, the cornerstone of our economy. Having them quit their jobs and live on UBI for the rest of their lives might cost the rest of us a little money. But it wouldn’t hurt our collective productivity as much as the number of people involved might suggest, and in some ways it might actively improve the average person’s life experience. Because a bunch of selfish lazy jerks would be sitting at home on subsistence money instead of actively moving around in the workforce making us miserable, or committing crimes and making us miserable.
Now, obviously, this is irrelevant if the main goal of charity is to make sure no undeserving soul gets something for free.
If the point is to punish undeserving souls, then clearly what we need to do is make sure that all the lazy unmotivated people get
taken out and shotgiven Sisyphean jobs that they will predictably be terrible at, to ensure that we are forever exposed to their lazy, unmotivated behavior as they numbly go through the motions of the Sisyphean jobs they don’t want. Which is basically the status quo.But I’m not proceeding from that premise. I’m thinking it’s more important to make sure no deserving person goes hungry or miserable. And that it would be desirable to reshape society along lines that allow people freedom to experiment, cultivate themselves, and evolve as multi-dimensional people, rather than defining all humans by where we slot them into the labor market.
If it turns out that a bunch of people don’t self-cultivate and turn into useless slacker loner-drones, well, we can work on that from the standpoint of giving future generations better upbringings and more options. It’s no worse than plenty of the problems we already have, and that UBI might well help with.
…
For purposes of this conversation I have been referring to economic value measured in dollars, simply because UBI is itself measured in dollars.
UBI consists of a way of taxing everyone’s dollars, reinvesting the dollars, getting some dollar return on investment from increased spending and from people being able to get out of Vimes Boot traps and “spend money to make money,” and (this last is important) also accrue non-dollar value.
While we could theoretically put a dollar value on “one of the child’s parents is present to hear the child speak their first word,” in practice our society does not do so, and it would be hard to put a price on it that accurately reflects the average parent’s desire for it.
…
In any case, my point here is that UBI will definitely cause a bunch of people to withdraw from the “labor for an employer to produce dollar-value commodities” part of the economy. Some of them will become useless layabouts, but many of those were already borderline useless to begin with and the loss will be small. And a large fraction will withdraw from the ‘dollar’ economy to participate in the ‘non-dollar’ part of the economy, such as stay-at-home parenting or creating art for purposes other than resale.
In light of my explanation of the way I was using a term, and that I am now using more precise terms, I hope my meaning here becomes more clear. Technology is rapidly squeezing employees out of the ‘dollar economy.’ It may ALSO improve the efficiency of the ‘non-dollar economy,’ and that’s great, but it doesn’t negate anything I’m saying.
In many cases we wouldn’t want to change them.
For example, the legal safety requirements for operating a piece of heavy machinery are such that you really, really should not hand over that heavy machinery to an impulsive drug addict with an IQ of 75. If you do such a thing, then when the predictable accident happens, even if no direct financial costs accrue to you as you repair the damages, society suffers.
A hundred years ago, it was probably safe to hand that same impulsive drug addict moron a shovel or a pickaxe, because odds were the person they’d predictably injure would be themselves (minimal cost to employer) or another highly expendable laborer (minimal cost to employer). Now you’re looking at worker’s comp costs, lawsuits, and so on.
Scott made this point earlier: the liabilities associated with certain human beings’ labor can make the marginal value of their labor negative. And as our society becomes more complex, the number of people whose marginal value to dollar-producing economic enterprises is likely to grow, not shrink.
Having such people turn into idle layabouts on UBI may be actively less bad for society than having them turn into criminals, or having them constantly rattling around in the workforce messing up everything theytouch.
At the same time, it’s not at all clear that we should want to reshape our economy to make sure that impulsive drug addicts with an IQ of 75 remain ‘valuable’ members of the workforce by providing them with jobs they can’t screw up badly enough to justify firing them as a profit-increasing measure.
When I was at the university, some students didn’t have discipline (yet) and played computer games all day. Yet they were obviously fairly intelligent or they wouldn’t be there. In the current system, these kids usually get a dose of reality, sooner or later.
I don’t believe that people emerge from the womb fully formed. Incentives matter and push people to develop themselves (or not). With broken incentives, you get broken people.
1) Yes, slackers are shaped by incentive structures. By the time a person reaches the age of majority, they are already shaped pretty heavily. Whether they then become a slacker is a measure of what shape they were put in, mostly by their parents and to an extent by society at large. You were seeing slacker college students in large part because those students, while capable of putting in enough sustained effort to land in the Xth percentile on a college placement test when under adult supervision, were unwilling or unable to sustain the effort without that supervision. This isn’t a problem UBI created.
2) For feasible UBI levels in the foreseeable future, anyone who has the skills and motivation of a typical college graduate will be very, very strongly motivated to make more money than UBI can provide. If the difference between making $60000 a year and $6000 a year isn’t enough to motivate Slacker Joe to get off his butt and start doing real work, then I fail to see how the difference between $54000 a year and $0 a year would have done the job in a satisfactory manner. Again, this won’t be a problem UBI created. It might be slightly exacerbated at the margin, but that’s offset by the huge number of problems UBI ameliorates at the margins.
3) More generally, I think we may be putting a bit too much stock in intelligence here, and not quite enough in motivation/determination/grit. Very intelligent but chronically unmotivated people are not necessarily capable of contributing to the economy on a scale commensurate with what someone of their intelligence but average motivation could do. This becomes intuitively obvious if we talk about, say, manual labor and physical strength (a lazy giant won’t necessarily get more farm work done than a stooped peasant grandmother), and I can’t see a reason why the result wouldn’t generalize to intellectual labor.
desperately want to do something more fulfilling and more socially useful than a menial job**, and giving them a way out? Or making sure that no matter what else is horrible about our society, by God we’re sure no undeserving lazy jackass is getting any of our hard-earned money?
Why are people doing menial jobs so much more special that they can make it harder for other people to spend their free time doing something more fulfilling and more socially useful than their job, by taking their money — which actually is hard to earn — and so limiting their options?
>Which is a higher priority: taking care of all the people who can’t work or desperately want to do something more fulfilling and more socially useful than a menial job**, and giving them a way out? Or making sure that no matter what else is horrible about our society, by God we’re sure no undeserving lazy jackass is getting any of our hard-earned money?
I feel like this is the wrong question to ask because it makes the assumption that we (i.e. the state) have the responsibility to distribute other people’s resources as we see fit. There are lots of problems we could try to solve if we had access to everybody’s money, the question is to what extent it is reasonable to use everybody (else)’s money.
As it seems like nobody has mentioned it here so far, I’d like to refer to Peter Sloterdijk’s (in)famous essay on the matter:
https://www.forbes.com/2010/01/27/free-market-democracy-modern-opinions-contributors-peter-sloterdijk.html#3f2fabc42fd1
Peter Sloterdijk is a german philosopher, the essay compares the German/European welfare state to the Left’s slogan “property is theft”.
I worry about hitting a discontinuity point: If UBI is below subsistence level, it doesn’t achieve its purpose. But what if once you hit subsistence level and living on UBI without a job suddenly becomes doable, people quit sucky jobs by the million, and the economy collapses?
There is some wriggle room – maybe “subsisting” can only be done in low-rent places no one wants to live, and some people like extra money. But you made some pretty compelling arguments about how awful jobs are. How sure are you that you can make UBI good enough to live off without the economy collapsing because of all the people going on them?
Job guarantees at least avoid this by not having a sudden cutoff point (which UBI gives in that work to no work is a sudden jump – part time work isn’t a big hit for many reasons).
(Overall I still think you made enough arguments that UBI is better than jobs guarantees to be convincing. But in terms of low-hanging fruit of improving things, I’d still put it below implementing Japanese zoning and mandatory health insurance).
Given that some people get by with 20k while others can’t make ends meet with 60k I’d say transition between minimal subsistence and comfortable living is wide enough that there isn’t some dollar amount where everyone will suddenly quit work.
UBI is at least better than means tested welfare (where only those below a certain income threshold get benefits) on this front. In our current system there exist cases where a person getting a job or getting a raise could actually lead to them being poorer overall because they receive benefits from multiple different programs (food stamps, subsidized housing, medicaid etc) and the sum of the benefits they would lose is more than the extra money they would make. With UBI every extra dollar you earn is a whole extra dollar in your pocket (minus taxes of course). So while there might be an incentive to quit your lousy job because you don’t need it to live anymore there would still be a large incentive to get a more pleasant job at least part time for some spending money.
Also any UBI that is large enough to make people start quitting their jobs is very unaffordable in our current state. Even a measly $500/month for every adult in america would be $1.5 Trillion/year. It likely won’t be feasible to have a subsistence level UBI until automation vastly increases the amount we can produce with less labor.
This raises the question of the effect of below-subsistence levels of UBI on lifestyles. I really have no idea what the average unemployed / disabled person does with supplementary income $500/month, I would expect critics to say drugs/waste like they do with the existing welfare systems.
I’m not saying the prior that ‘just improve their life a bit’ is wrong, it seems fine to me, but realistically that is a very relevant question if UBI/NIT is ever introduced at scale.
Well,
If you replace existing programs with UBI, you won’t have to fund them and can give more. I have no idea how the math works out.
However, if you cancel those programs then the guy with the disability will get way *less*.
One option I heard was making getting UBI annoying, like waiting in line for 2 hours a day annoying. Then only people who really need it would get it, and you could give more (or cost less), but you would still solve a lot of the problems of mean testing.
So, not universal then. And in fact only aimed at those with no job. Hmmmmm…
If you replace existing programs with UBI, you won’t have to fund them and can give more. I have no idea how the math works out.
But can we really cut all the other programs? If someone doesn’t spend their UBI in housing and is homeless, you will regrow all the old welfare systems.
I do like the fact that UBI deals with the negative motivations from cutoffs. But that benefit doesn’t make it work.
I’m sure there will still be private charity supporting homeless shelters, but will government really be willing to spend a lot of money on shelters when they know every homeless person is getting $500/mo?
Then this is not UBI. It’s a basic job program, where everyone’s job is to spend two hours a day waiting in the paycheck line.
“Then this is not UBI. It’s a basic job program, where everyone’s job is to spend two hours a day waiting in the paycheck line.”
Not really. Jobs you expect to generate goods or services. Lines, not so much. So this idea is not “Waiting Jobs”. This is deterrent on receiving UBI to make the system cheaper.
But it is Universal – everyone can do this. Job doesn’t exclude you, if you go on a day off, after hours, on weekend, etc. You just need to spend some time on it.
Anyway, this is an idea I am not sure what the implications of, and I understand why you are all dismissing it – you all want to play video games on the dole, and standing in line is unpleasant –
but:
1) it could reduce the cost of the program by a lot – let’s say 70%?
2) It solves the issue of mean testing
3) You don’t need extra consumption
4) Solves the cutoff issue of current benefits.
5) No problems with disability, etc. that GJ have.
You had originally said two hours a day. So then these horrible places full of dispirited public beureaurocrots are going to be open more or less continually (since poor people are often on call and work odd hours), and probably full of screaming children (since poor people can’t afford after hours child care), as well as guys yelling GRAAGH?
People are very adaptable. Before it happened, I probably wouldn’t have believed there would have been millions of people able and willing to organize their lives around two hour commutes. They (we?) would doubtless adapt to an eternal DMV system as well.
If you’re trying to maximize kafkaesqueness, it would be a good plan. It sounds like something that was probably tested at some point in Russia.
“If you’re trying to maximize kafkaesqueness, it would be a good plan”
If you are talking kafkaesqueness, what about our current state of affairs? Putting the weakest members of society through all kind of hoops to get some money, is pretty kafkaesque.
You have a problem with UBI.
You can’t afford to give everyone enough money to live.
You can’t give too little and still drop all existing welfare programs, which is kind of the goal (or a big part of it – getting rid of mean testing).
So you want poor people to get the money, and rich people to not get the money, but you can’t test for it (otherwise this is not UBI).
So you put a cost on UBI money, in time. Time is worth more to rich people who can and would rather spend their time in something else than waiting in line for 2 hours with screaming babies and people who go GRAAGH.
So all (or enough) the rich people go away willingly, and the poor people wait in line and get their money.
If you have supplementary income of $500/month, you probably can’t afford to live alone, but you CAN move in with someone and defray a lot of the extra costs they incur by having a roommate. You can combine that income with a minimum wage job that pays $7.50 an hour for 24 hours a week and be making as much as you would otherwise make working two such jobs for a combined 40 hours a week plus added transportation time and disrupted sleep opportunity costs.
I mean, there’s a huge number of people for whom the extra $6000/yr would make a life-altering difference. We shouldn’t be modeling this as “but how will they live on $6000/yr only,” because if that’s all they’ll have after UBI, it’s because they had literally $0/yr before UBI. In which case either they’ll find living on $6000/yr relatively easy, or they’re already dead and not under consideration.
A Basic Job has the same incentive benefits and no welfare trap. Your choices are:
a) work the Basic Job, net cost of 40 hours/week for $7.00/hour x 40 hours/week of benefits.
b) work a private sector job, net cost 40 hours/week for $7.25/hour x 40 hours/week of benefits.
The key point is to make the Basic Job worse than every single private sector job. The ideal Basic Job is one that everyone refuses because they have better private sector options, and is only used by people who really need it.
And we have just re-invented the Victorian Workhouse!
As Michael Handy points out, this has already been tried.
https://en.wikipedia.org/wiki/Workhouse
Workhouses were explicitly founded on the assumption that there were lots of idle, able-bodied vagrants wandering around who should be rounded up and given crappy jobs paid for by the government. In practice, they turned into dumping grounds for stray children, the disabled, and the elderly. Conditions ranged from bad to “this is the place Oliver Twist was in when he famously asked “Please sir, I want some more.” ”
The workhouses were not, on the whole, a success story, to put it mildly. Modern welfare programs (British-style) replaced them.
Because it turns out that taking everyone who can’t get a private-sector job, without regard to the reason for their failure to do so, and shoving them into a job and living conditions that are explicitly designed by sadistic jerks to be worse than the worst private-sector job in the world… Turns out about as inhumanely as one would expect.
It’s a big if. There’s at least some suspicion that a lot of modern jobs are either make work or not fully utilising people. It is also possible that all you do is remove the ulta-cheep labour from the marketplace and slightly more expensive automation or better utilisation replaces it. In that instance, UBI is working exactly as intended.
One thing that’s overlooked is that the level of guaranteed income is very scalable; on the margin, everything helps. Lower levels of guaranteed income might mean working one fewer part time job becomes viable in a family, or that poor relatives can contribute something when they couldn’t before. And this might be more politically viable to start.
This is a very interesting point that I somehow have never considered. Of course small payments could help on the margins. Other possible gains that could happen far below a level where you can live off the UBI payments:
1. Might change the economics for working parents so one of them can stay home and do child-care full time, living on 1 salary + 2 UBI payments.
2. Acts like unemployment payments but without all the hoops you have to jump through, allowing people to quit jobs where they’re abused easier (impossible now, you don’t get unemployment if you quit), letting people spend more time unemployed between jobs so they can search for a better job (this should lead to better fits between workers and jobs, leading to some amount of increased productivity overall, although I of course have no idea if it’s a net gain for the economy).
Which is why I’d like to see the UBI proponents get universal food stamps implemented first. Everyone gets $100/month through EBT. If they can’t manage to accomplish that, there’s no need to bother with bigger pies in the sky.
$100 extra food money isn’t as useful as $100 extra cash money for those already receiving food benefits, though. There’s only so much non restaurant, non-alcohol food that’s reasonable to consume in a month. They could easily increase the EITC, though, and may.
If the first objection to giving people free money is “no that’s not enough” then I’m out.
This is just a microcosm of what would play out with replacing existing social programs with a UBI.
It’s not that it’s not enough, it’s that it’s in the wrong form. For instance, Michigan (for reasons that are beyond me) gives single people some $300 in SNAP benefits (or at least did last I heard). Cost of living is such that it’s reasonable to eat about $200 of normal food. This resulted in even well meaning, honest people just using the extra food credits for gifts or steak and lobster, even if it would have been much more useful for rent or transport. I suppose the dishonest ones traded the food for about half its value in cash, as happens in the Appalachian food benefit economy.
“Czy się stoi, czy się leży,
dwa tysiące się należy.”
Translation requested? Google Translate doesn’t provide anything evocative.
Dammit. Spamfilter ate my post. >:(
Basically, “whether you are standing or lying down, two thousand [moneys] is due”.
The People’s Republic of Poland had a bunch of anti-unemployment legislation. They dealt with it by forcibly conscripting people to work certain jobs, and criminalizing extended unemployment. And due to the corrupt nature of a typical communist system, discipline was rather lax, and money was not worth much (since there was little to buy with it). So you got people assigned to jobs slacking off and collecting “money”.
This sounds like the punchline to a joke, but Googling can’t pull up the full thing if that’s the case. Is that the source? (It’s similar to the few Soviet jokes I know)
It’s a folk saying, I have no particular source. I would link you to the legal acts for the mentioned laws, but something about the links spamfilters that.
I think the Soviet joke is, “we pretend to work and they pretend to pay us”.
We had/have a similar thing to basic jobs in Germany and it worked about as well as you would expect. Companies could hire workers for 1€/hour and the state would pay social security on top of that. The idea was that long-term unemployed people would find their way back to employment this way, but companies just replaced them with new 1€-workers when their contract was over and reduced fully-paid employment because duh!
Plus people on social security can be forced to take jobs or education. As a result a lot of our homeless are depressed people who stopped responding to social security demands because that’s what caused their depression.
(Links are to German Wikipedia, maybe Google translate helps)
I agree that it doesn’t work as expected in Germany, but I think it it important to point out that not everyone is allowed is to hire workers for 1€. The work has to be neutral to the competition and in the public interest. So people are hired at a lot of public institutions (e.g. schools, universities, cleaning up the city).
Additionally these jobs improved the unemployment statistics at a low cost for the government, as people who are working in these jobs count as employed although most of these jobs are only part time jobs.
“neutral to the competition and in the public interest”?
Does that, in practice, end up benefiting the companies best at convincing the person who decides if the work is ‘in the public interest’ or not?
In the end courts decide if it is in the public interest. But due to this requirements hardly any private run companies are employing people in that way.
As nameless1 (see below) states so eloquently: If the government or the municipality want to give out jobs why should private companies do this?
In Germany there are a still a lot of institution run by directly by the government (e.g. most of education and a lot of child care) so there are more then enough opportunities for jobs in the public interest.
But as it doesn’t work very well to get people ready for “real” jobs in the private sector, people are less often forced in theses jobs and therefore the numbers are shrinking.
“The work has to be neutral to the competition and in the public interest.”
Similar regulation would probably be applied to an equivalent American program, so the German example is relevant in this area.
“these jobs improved the unemployment statistics”
Alas without actually improving unemployment or dependence on government support.
“so the German example is relevant in this area.”
Probably not to relevant, as it was never designed as a job guarantee, but as a measure to force / prepare long-term unemployed people for the job market. So only a smaller part of the the unemployed that are able to work is put in these jobs.
“without actually improving unemployment”
My use of italic for improved was probably not enough to give it the right sarcastic tone I intended. Of course there is no real improvement there but the numbers are lower.
The way Scott describes it it’s “Basic Job or no money” which is pretty much exactly how it works in Germany (maybe except you get money when no suitable job is available).
So I just had to Google it and obviously it’s only the worst examples that make it into the news but apparently 1€-jobbers were ordered to put second-hand puzzles together to check if they were complete.
It seems to me that many people whose lives suffer due to lack of money are in significant debt and that debt payments are a large fraction of their income. If a UBI is given to everyone, how are people prevented from borrowing $100,000 against it, blowing it quickly, and then having $0 income because their UBI is all spent on interest? Solving this problem also seems full of opaque bureaucracies and Kafkaesque rituals. Unless we just ban loaning money with interest for consumptive goods at the same time(a policy I might just favor).
Ban collections of any kind from attaching to the UBI.
Which means nobody will lend against it, so there you go, problem solved.
Incidentally, it may also make it harder to get a loan when you work, because much more people would have the option (and perhaps plan) to going back to UBI only (making the debt impossible to collect), than have the option today to go without income. This is not an issue, though, if it’s possible to garnish part of the UBI, just not the whole.
Garnishing a part of the UBI not needed for basic subsistence defeats the entire program.
Having the ungarnished UBI be more than needed for basic subsistence is also harmful.
Ability to get a loan currently depends on credit rating, right? And as non-payment on a loan drops your credit rating dramatically, those people would only be able to get those new loans a few times, and only if their credit rating had previously been built by making timely payments on previous loans in the first place. What I’m getting at is that an un-garnishable UBI would provide bad actors with slightly better opportunities, but not by a lot.
+1
We’re using this to replace existing welfare programs, and also to ensure that everyone has a safety net below which they can’t fall. So it’s really important to make it impossible for anyone to garnish it. Specifically, we need to ensure future UBI payments can’t be garnished for:
a. Debts, including student loan debts and fines/fees.
b. Lawsuits (even when it’s a *really unsympathetic* plaintiff and everybody wants the bastard to starve on the streets as punishment for his evil deeds).
c. Child support payments.
d. Any kind of clever local-government “service fees” that might be used to either suck a little extra cash from the UBI checks or to drive all the UBI-dependent people somewhere else.
etc.
What happens to your UBI when you’re in jail/prison? Given the way a lot of local governments use their police departments to raise revenue, the worst choice would be to have it go to the prison. IMO, the best would be for it to either accumulate till the prisoner gets out, or go to the prisoner while he’s inside.
But see @10240’s excellent point above.
Does child support even exist in a UBI world?
If you give UBI to children you have a world of trouble, so I think yes
@Cliff, are you talking about literally giving it to the children instead of their parents? If not, what world of trouble are you thinking of?
I would expect child support to continue to exist, like alimony or other private judgments.
The really critical thing is not to allow local governments to take a big chunk of the UBI money via strategic arrests and fines, or there will absolutely be local governments who run their entire budget on finding some poor people to arrest/fine/jail, and extracting their UBI for awhile.
@evan: Absolutely massive incentivization of having more kids. If I can take my basic income from $20,000 a year to $60,000 by having four kids, I’m doing it. If I can take it to $100,000 by having four more, I’m quitting my day job.
Replace child support with creches. Why is it okay to randomly decide that some children get below-standard upbringing?
I would not expect a child’s UBI to be the same as an adult’s—it would be calibrated to cover the additional cost of raising a child and no more. An adult’s might cover a studio apartment; a child’s might cover the difference between that and a one-bedroom.
It would be like having a kid with someone so you could get child support. The costs of taking care of the kid will at least cancel out the extra money in your pocket.
Don’t western countries need more kids?
Definitely not true, because the child is entitled to “share in the success” of the father, they don’t just get the money they need to survive. That is why gold-diggers exist
Don’t western countries need more kids?
They need more tax payers to keep retirement programs afloat.
ZPG goes from silly to required if every new citizen is someone you have to take care of, not someone who takes care of themselves.
What would you do if a person on UBI does commit a fineable misdemeanor though? You can’t extract the money from them, so do you put them in jail instead?
What would you do if a person on UBI does commit a fineable misdemeanor though? You can’t extract the money from them, so do you put them in jail instead?
If you look at a place like Ferguson, that’s pretty much exactly what they do.
Suspending UBI for people while they are incarcerated seems like a small compromise; I’m not sure how slippery that slope is, but I don’t think that’s the right hill to die on.
Totally agree that it doesn’t go to anyone who has influence in deciding who goes to prison. (Which means it doesn’t go to anyone, since money will breed influence)
> If a UBI is given to everyone, how are people prevented from borrowing $100,000 against it, blowing it quickly, and then having $0 income because their UBI is all spent on interest?
In the policy steady-state[1], why would a lender loan $100k to someone who has the exact amount of money that allows them to deduce that the prospective borrower has a pulse, but no more? I don’t see why the credit markets wouldn’t shift around this.
The broader point here is that I think “gov’t makes it so that no one can ever mess up their lives ever” is a substantially higher bar than where we are now or what BI aims to solve. (IMO, it’s unsolvable)
[1] i.e., excluding the case where lenders are expecting the government to make a shift in policy to infinitely bail out profligate UBI-wasters
They’ll lend it because (in a world without laws against garnishing UBI) they know the borrower will have a stream of income that’ll allow them to collect a hefty sum in return.
Bankrupts will still be entitled to UBI. Assuming (not unreasonably) that bankruptcy laws won’t allow garnishment of UBI to pay debts, anyone with only UBI as income and more debts than assets could declare bankruptcy, surrender their assets to their creditors, and walk free from their debt.
The risk of loaning to someone with nothing but UBI would be huge, so no lender would lend.
(incidentally, the problem with this may be in the housing market, landlords will be demanding rent up-front rather than in arrears and being very aggressive about evicting people who fall behind)
There are two main policy tools:
(1) Restricting the amount of UBI from which debt can be collected
(2) Making it easier for people to get rid of debt by declaring bankruptcy.
Huge debt burden are much more of problem in the US where the legislation is pro-bank than in a country like Germany where the policy makers care about solving the problem.
(1) and (2) + UBI will create a huge market for loan sharks for people with low future orientedness.
Is Germany much more liberal on this that the US? My general knowledge is that Europe is extremely creditor-friendly in bankruptcy provisions compared to the US. I recall reading about the situation in Scandinavian countries and in France where it was nearly impossible to get your debts discharged from e.g., a failed small business, where the US is relatively simple (it got harder after our last major bankruptcy reform in 2005, but it’s still way easier than in those countries) However maybe Germany is exceptional compared to those countries?
People are protected from 100% of their income going to debt because they can go bankrupt, and therefore businesses will not lend to people they think might go bankrupt. (Student loans are non-dischargeable in bankruptcy, which is a stupid policy that we should get rid of.)
People are too reluctant to go bankrupt, which is part of the reason this system doesn’t work, but AFAICT we haven’t even tried ads where smiling people of various races talk about how they went bankrupt and now they’re so happy while their kids play joyfully around them, which is a pleasantly non-Kafkaesque solution.
The thing about student loans and bankruptcy is, you get situations like this:
“I’m a broke 18 year old. If you lend me a bunch of money, I can go to college, then medical school, and become a doctor. Then I’ll make lots of money and pay you back.”
“Okay.”
“Hey, I’m a new doctor now, but I still don’t have any assets yet. I’m going to declare bankruptcy now, instead of paying you. Then I’m going to make lots of money and keep it all for myself.”
“Crap.”
“I’m a different broke 18 year old. If you lend me a bunch of money, I can go to college, then medical school, and become a doctor. Then I’ll make lots of money and pay you back.”
“Hell no! I’m not falling for that again!”
I’m going to declare bankruptcy now, instead of paying you.
I challenge you to find me one case of this happening.
As Ozy just pointed out, student loans at present are not dischargeable in bankruptcy.
They were made dischargeable in BK in the 1970s. (And private loans in the aughts). There was a fear that people would react with strategic defaults right after med school. But it was just a fear, reacted to irrationally, and very very very few people actually ever did it in the real world.
Witness that people, when challenged, cannot produce an example from the 1970s or before where it actually happened.
Ozy said that we should get rid of this stupid feature, and I agree, because the thing it’s supposed to protect us against is nil. You still need to stand before a bankruptcy judge and convince him that you really aren’t planning to become a doctor.
Do you also think we should get rid of student loans?
If you lend someone money to build a factory and he stops paying, you can claim the factory. You can’t do that with human capital. So someone most of whose assets consist of human capital bought with borrowed money can reneg on the debt at little cost to himself, which means that no ordinary lender will lend to him. You are then left with student loans only going to people with enough other assets so they can be trusted not to declare bankruptcy.
You can still have government student loans, of course, but they are then gifts, not loans, to anyone who doesn’t have substantial assets or strong moral objections to going bankrupt.
Not everyone in debt is a gibbering irresponsible idiot.
There are a lot of people in debt who started out with limited resources and therefore limited means to manage crises. Once that happens, it’s very easy for one crisis to chain into others. It’s easy to run into a situation that costs you five thousand dollars, at a time when you simply do not have five thousand dollars in savings, because of things that genuinely looked obligatory at the time (say, trying to make it through community college). Once that happens, you can easily spend the rest of your life trying to stay out of debt with variable success, even though the total amounts of money involved are pretty small in absolute terms by middle-class standards.
I’m sure there’d be someone who would just end up settling into a new equilibrium state of living in which the UBI payments do nothing but pay interest on another maxed-out credit card. But bluntly, if society doesn’t care enough to track these people down and stage interventions to get them out of debt now, I don’t see why we should worry about it that much in a hypothetical future state.
I wonder what the percentage of aftertax income of people in the lowest quintile of income in the US is used to pay interest on debt? Goggling around I could find data for all households (about 10% now with the split about even between mortgage and consumer debt, https://fred.stlouisfed.org/series/TDSP), but not broken down into income brackets. My worry would be that UBI could just end up being a system of wealth redistribution from people who pay taxes to people who loan money at high interest rates to broke people. We definitely don’t need more of that kind of wealth transfer in the US. Some idea of what percentage of UBI is likely to end up paying interest payments would be needed before I would support the idea.
To me I like the idea of Basic Equity much better. People can get a big chunk of money at say 20. After high school, have the option of a two year enrollment in national service (military or other systems like elder care) and then you get a chunk of capital ($100k?) to enter society. Use it for college, start a business, start a family, buy a house, etc. If young people got a big chunk of money at age 20 (this could also be set as the age for being an adult with all its privileges and responsibilities) I think parents, schools, and other institutions would be more motivated to educate people about financial matters.
If giving people a steady trickle of free money every two weeks isn’t going to stop them from recklessly racking up debts and turning their free money trickle into an ongoing string of interest payments..
…Why, exactly, would we expect good results from just giving people a lump sum pile of cash? It is if anything easier to recklessly blow off a pile of cash, than to recklessly incur debts that turn your whole UBI into debt service.
I think that if most human actions (jobs) are replaced by machines and human labor becomes almost worthless, then only the owners of the machines(capital) will have economic freedom. Hopefully most people could be responsible for enough capital to give them a reasonable income and we should focus on that type of training. I see almost nothing along those lines in the educational system today. Giving everyone a bit of capital at the start of their adult lives seems a good way to help people have a successful life, however that person defines it. Being forced onto the dole (UBI), might not a good thing for most people. Maybe you could give people the choice of one or the other?
Good post. One or two things I think are missing:
0. Although you mentioned it repeatedly in the text, somehow you never made a heading for the basic argument that, you know, a hell of a lot of basic jobs would not be productive work at all but rather pure make-work, destroying value rather than creating it. ((5) kind of covers this but is mostly focused on other things.)
1. Sarris’s (viii) is just wrong. It does not preserve the best features of capitalism, because of your (6) and (7) above. Why would adding a whole bunch of involuntary transactions preserve the best features of capitalism?
2. There’s a fundamental argument why UBI is better than a jobs guarantee that you’ve missed: Separation of concerns! Let’s think this through — what exactly is the point of a jobs guarantee? To get money to poor people? The simplest way to accomplish that is to just give them money. The entire idea of a jobs guarantee makes absolutely no sense unless you have the ideas of “income” and “work” bundled in your head. But once you perform a bit of unbundling, of deconflation, once you hug the query, enforce separation of concerns, and allow distinct things to be distinct, the whole idea just becomes kind of clearly dumb.
Indeed a number of the points you do point out above are basically consequences of the above. Like, if “jobs” and “income” are conflated, and the intended purpose of the program is income but the stated purpose (and implementation) is jobs, then you can expect it to become corrupted over time, as the intended purpose and stated purpose fight with one another. And that results in a lot of wasted value, and a lot of bullshit, trying to keep up appearances.
Better idea: Don’t do one thing by means of a different thing when you can just do the thing. Seriously, separation of concerns.
I think this does a bit to address Sarris’s (iv) as well. Suppose for a moment that Sarris is right that lots of people will just have no clue what to do with their time and are as a result horribly unhappy when not forced by circumstance to work. Then perhaps… that can be addressed separately with a separate government program? Say, an office which goes around to people and aggressively offers them projects (paying or not) that they can work on, without anyone being forced into it? Or if this is a particular problem for drug addicts, have some special program just for drug addicts? Again: Whenever possible, unbundle.
(Remember — and this is something you kind of mentioned implicitly above — is that part of the point of UBI is to free people to work on what they want, without worrying if it pays. You can just spend your time on your own projects without having to worry so much whether they can support you! Maybe I should have made this a separate #3. Whatever.)
A Basic Job is completely voluntary. If you don’t want it, don’t do it. If you want money, you have every right to exchange something of value with other people in return for money.
The separation of concerns completely ignores the benefit of the Basic Job. The goal is to give money to people who are deserving while not giving it to those who aren’t. A person who wants to serve others but can’t find the right job is deserving. A person who refuses to create value for others is not.
Current welfare and other programs make halfhearted attempts to make these distinctions via administrative procedure. The Basic Job just measures it directly.
Basic income doesn’t solve this problem at all. It gives money to the deserving and undeserving alike.
“Basic income doesn’t solve this problem at all. It gives money to the deserving and undeserving alike.”
Yes. That’s a feature, not a bug.
So lets be clear that paying people to sit around playing video games is the main reason people like the BI, and stop pretending the other arguments are anything besides a rationalization for this.
Uh… argument needed?
No, not forcing the deserving needy to do pointless, value destroying makework to get the support we all agree they need so they can take care of their grandma or kids or make cute Etsy knickknacks or whatever is the main reason people like the BI. Plus all the other stuff Scott listed like not forcing the disabled through Kafkaesque bureaucratic hellscapes.
Some fraction of people using BI to sit around, smoke weed, and play video games is a negative price we’re willing to pay for that. And anyway getting those people out of the workforce makes things more pleasant and lucrative for the industrious video game artists and weed cultivators.
Honestly I’m not sure it’s such a negative price. What’s so great about working? What’s so bad about sitting around smoking weed and playing video games?
That being said, I don’t think enabling people to do so is the point of a BI. It’s a consequence of one, and in my view a largely neutral one.
Gbdub, if you believe there is no useful labor these folks can provide, I take it you do not favor creating any new government programs that require labor?
E.g. no building new infrastructure, no free Scandinavia style child care, etc?
This is not a useful method of argumentation. It’s a pointless gotcha, and the connection between the first and second clauses is not only opaque, I actually have no idea what you think it is. Honest request: try to be a huge amount more charitable.
Because if the government doesn’t employ everybody, it can’t employ anybody.
Andrew, no one proposes having the government employ everybody. The Basic Job is supposed to be the worst possible job, and something people will leave as soon as they find a private sector job.
Enkidum, gbdub claimed that the job guarantee folks would be doing “pointless, value destroying makework”. If the only labor available to government workers is “pointless, value destroying makework”, then we should not hire more of them.
There’s either useful work to be done, or there isn’t. I’m not aware of any particular left wing proposals for new government services that involve only high skill labor.
The government already employs, directly, a ton of people, to do everything from running the EPA to humping rifles through Afghan mountain ranges. Indirectly, through contracting private companies to do things like build roads and aircraft carriers, it employs a ton more.
Some of these are more valuable than others, and we can argue about whether there are more value-added projects that the government ought to be doing or contracting for, presumably adding some number of jobs. Regardless, most of these pay much more than minimum wage, and most have job requirements not really suitable for “employment of last resort”.
But a guaranteed job for every person in America is a whole ‘nother ball of wax. No way that ends up net positive, for all the reasons Scott discussed.
For some reason the edit window didn’t come up. My last paragraph should start “a guaranteed job for everyone not otherwise employed”.
Remember, the “Basic Job” people are, give or take, the people nobody in the private sector can find a use for that’s worth the wage+overhead+hassle.
@original comment
I think the blog SlateStarCodex has a good recent article about why UBJ would be worse than UBI, maybe you should read it.
Desirability aside, this will never happen. There would be a massive outcry if the government created jobs that are intentionally worse than Amazon warehouse pickers.
Have there been any mass shootings at Amazon warehouses yet?
Because mass shootings generally used to be called “going postal”, and there’s a reason for that. One involving jobs created by the government, and IIRC often as quasi-guaranteed jobs for disabled(ish) veterans and the like.
Except it doesn’t measure that directly. The Basic Job gives money to people who want to serve others in a way the government has decided to measure and put a stamp of approval on. If I decide I want to serve others by playing my violin on the street corner, or by writing a novel, or by staying home to teach my hypothetical kids – that doesn’t count as a Basic Job, so I wouldn’t get paid.
That’s sometimes an advantage, because there are people who’ll say they’re serving others – and might even believe it – when they’re negative-value if anything. (E.g. if someone’s playing the fist-on-windowglass instead of the violin, or staying home to play computer games while their kids are crying.) But it’s sometimes a disadvantage too.
The Basic Job gives money to people who want to serve others in a way the government has decided to measure and put a stamp of approval on
Imagine [worst politician you can think of] being in charge of this assessment.
Not even that. A committee of a dozen politicians who you hate, and who all hate each other, for good measure.
How is it any worse than [worst politician you can think of] being in charge of medical care, 2.5 million men with tanks and nuclear bombs and the federal reserve?
1. “This is already bad, what’s the problem with making it worse” is never a good look.
2. Posse Comitatus stops the army from being deployed domestically. I’ve see no inclination that the “basic job” would exclude political canvassing for “socially approved” causes.
Yes, if you want to play the violin or be a gigolo for money, you’ll need to find someone in the private sector to pay you for that.
The basic job is a job of last resort, it’s not supposed to be your dream job. If you refuse to work unless you get your dream job, that falls into “undeserving” in my book.
So what do you imagine the basic jobs will be? Given that no one in the private sector in what are currently reasonably good economic times is apparently willing to pay for them on terms that are legal and amenable to the currently unemployed?
For the sympathetic poor folks who need work and are just unable to find it that you usually hear about, child care, elder care, delivering mail, rote office work.
For the more unpleasant folks Scott describes, picking up trash in the park/by the side of roads, construction, janitorial work at government facilities, that kind of thing.
For the truly awful and destructive folks who will sabotage any attempt at work, making gravel the hard way, mowing lawns with a scythe, that kind of thing. They get paid by the rock, not by the hour.
I realize that most of these jobs/wages are not amenable to the currently poor. That’s because they currently retain the option to live a life of leisure at the taxpayer’s expense. A major benefit of the Basic Job is to take the life of leisure out of that equation, in order to encourage people to take the taxpayer’s expense part out as well.
Is there a mail carrier, rote office worker, or child care shortage in most areas? Those are fairly competitive, as far as I’m aware. Many are also government jobs already. Elder care may be a bit less competitive, and may be in more need of workers as baby boomers enter nursing homes. The government could probably make more such jobs, though looking at the way they’ve been running veteran’s healthcare, it would probably not only be a job of last resort, but also an elder care situation of last resort.
Government facilities already have people with disabilities as janitors, so that fruit has already been plucked. Construction is a competitive skilled trade, as has been mentioned elsewhere. Road clean up might be an option, like for those who have court ordered community service, but probably not enough to be a full time job for a bunch of people.
And then for each one of those people, another person from the first category going over their work rock by rock to make sure they did it? Yay, more jobs.
Most of the work you list is, to the extent that it is useful, already being done and paid for. You’re going to render all the people currently doing them, presumably “better” people by your reckoning, unemployed or at least much worse off when their wages are reduced to Basic Job level.
Maybe not child and elder care, but Scott already talks about those, and his argument that we might as well just subsidize people caring for their own kids / grandmas and save the overhead, I find compelling.
Rock-breaking? We have rock-breaking machines driven by reasonably well compensated rock-breaking professionals for that. How the hell is laying off all the rock-breaking machine drivers and people at the rock-breaking machine manufacturer just to give makework to antisocial jagoffs a net gain to society?
As for a “life of leisure” – wait, I thought we had dispelled the “welfare queen” myth already? But anyway, as others have already noted, if we had the political will to let people starve we’d be doing it already. This is just going to lead to a lot of people pretending to work so we can actually pay them.
Really your whole premise in this thread seems to be “Better to make 10 innocent people more miserable, than to let a single lazy bastard get a free lunch”.
Laughingagave, construction in the United States is a skilled trade. That’s necessary because of the economics of highly paid unionized construction workers. In India it is minimally skilled and construction sites will have far more people doing far less productive (but still useful) things.
On the flip side, the US has an extreme construction cost problem. I’m happy to throw labor that we’re already paying for at the problem.
Similarly, child care is too scarce. There are huge numbers of moderately skilled working women who simply stop working because child care is unavailable.
And having walked around San Francisco and NY, the roads are simply not as clean as they could be if we cleaned them more reliably.
Come visit me in India. I can point out huge amounts of useful, unskilled labor that can be performed. Since we’re already paying for it, I see no reason not to receive it.
Gbdub, when was this myth dispelled? I know left wing types sneer at anyone who states the facts, but that’s not the same as “dispelled”.
The fact is that the American poor currently refuse to work, and consume more leisure than anyone else. About 10% of poor adults age 18-64 actually work full time, and about 40% work at all. (In contrast about 60% of non-poor adults work full time.) The non workers are mostly not looking for work.
https://www.bls.gov/webapps/legacy/tustab11a.htm
https://www.census.gov/content/dam/Census/library/publications/2015/demo/p60-252.pdf (Table 3, page 13)
https://www.bls.gov/opub/reports/working-poor/2015/home.htm
What does “dispelled” mean to you?
In India or the US?
We could do with knowing how many of these poor non-workers are able bodied.
60% of poor adults don’t work, and 90% of poor adults don’t work full time. From this we conclude that if you’re a poor person, your moral inferiority means you don’t want to work full time, or at all.
In other news, 90% of dense patches of acorns on the ground are found under oak trees. From this we conclude that there’s something magical about acorn patches that causes oak trees to uproot themselves and fly through the air to replant themselves in an acorn patch.
Seriously, you’re getting cause and effect backwards. It’s not that the poor adults are all lazy and therefore don’t find jobs that are readily available. It’s that people who can’t find jobs wind up poor, and not coincidentally don’t have jobs. They may be
1) Be physically crippled and unable to work, or worksteadily
2) Have mental disorders or disabilities that make them undesirable employees no one wants to hire.
3) Have obligations like “care for relatives” that interfere with their ability to work, but which MUST be met or their relatives die.
4) Have behavioral issues that, while in no way preventing them from doing a useful job, make others reluctant to hire them for social reasons.
5) Have committed some Big Mistake in their childhood (teen pregnancy, being a member of a criminal gang as a teenager, using drugs as a teenager and becoming addicted), which they cannot now easily jettison,and which damages their ability to find a job even if NOW they want one.
6) Sixth and finally, after all these other factors are considered, some of them may actually be lazy. But there is no compelling reason to assume that the lazy ones are in the majority here.
Okay. India has minimally skilled construction workers. They are no doubt very cheap.
https://www.cnn.com/2018/03/31/world/building-collapse-india/index.html
https://www.aljazeera.com/news/2017/08/forty-people-feared-trapped-mumbai-building-collapse-170831050336610.html
India also has a lot of building collapses. This is not a coincidence, because nothing is ever a coincidence.
If you don’t like buildings collapsing on people, have them built by skilled, trained professionals with an incentive to keep their jobs. Not by unskilled people the rest of the private sector refused to hire.
Would you trust an otherwise unemployable person to care for your children? I wouldn’t. Same problem. The least employable people are also the ones most likely to actively make you wish you’d never hired them.
The
Stucchio keeps making variations on the same mistake: thinking that if two things are called by the same name, they are equivalent in every way. McDonalfs is a restaurant , El Bulli is a restaurant.
I’m a bit confused by this comment, but I think I understand.
Suffice to say that in India, buildings probably ARE built by unskilled labor, more so than in the US, and even the skilled labor is much cheaper than in the US, because standards of living are lower. Correspondingly, because standards of living are lower, rents and other mandatory living expenses are lower, so that a skilled worker in India might be able to survive reasonably comfortably (by Indian standards) on a wage that would be miserable poverty in the US for anyone.
The ability of the Indians to find unskilled labor for just about anyone that will in some way add value to their society is not a consequence of their greater thrift, industriousness, or virtue. It is a consequence of their poverty. It is a product not of virtue, but of vice, since India’s poverty is in large part caused by the British, who sabotaged the Indian economy to optimize their own ability to milk it for export goods and import markets during the 18th and 19th centuries.
Had India remained independent, avoided colonization, and followed a developmental trajectory more in line with, say, Japan… Today, it would have something more like a developed-world level of wages. It would also have the characteristic developed-world problem of having few jobs suitable for unskilled laborers. And the characteristic developed-world advantage of not having to deal with the consequences of delegating important tasks like “construct apartment buildings” to unskilled labor.
Because one of the things that goes into ‘high standard of living’ is ‘you get to live in apartments that won’t fall down and kill you.’
That’s an interesting point, but I have to disagree. (Actually, I see Evan þ has already basically made the argument I’m about to. But, I’m going to expand on his argument.) Let’s accept your deserving/undeserving distinction for now.
As has already been argued, a basic jobs program will necessarily involve jobs that are not actually productive. (If the government wants to hire people to do actual productive work, it can do that, but that’s not a jobs guarantee. A guarantee will necessarily involve unproductive work.) I think we both accept that, is that correct?
Your claim: The deserving will work basic jobs because they want to serve / create value; the undeserving don’t want to and so will not.
Problem: “Serve” and “create value” are actually quite different. Destruction as instructed is “serving”. And creating value often involves going it alone. So said before I’ll accept your distinction, but actually we have to disentangle just what you mean. If you really mean “serving”… then I can’t accept that distinction at all. But I suspect you really did mean creating value, so let’s go with that, and I can accept that distinction at all.
But then we get to:
Problem: Why would the deserving, who want to create value, want one of these basic jobs, which are manifestly not creating value? You say it’s measuring one’s deservingness, but it looks to me like it’s not measuring one’s willingness to create value at all. It’s just measuring one’s willingness to, well, serve. Which to my mind at least is not in any way a measure of deservingness.
The thing is, as has already been mentioned, there’s a lot of value creation out there that, well, nobody is really willing to pay for; but it happens anyway because people — the deserving, as you say — want to do it, they’ll do it in their spare time. How is someone’s willingness to give up their time that they spend on their own projects, or helping out on others’ projects for free, to do useless make-work, a measure of their deservingness? I’m not seeing it.
Fundamentally I don’t think your test works. Sure, I’m not exactly thrilled about the idea of paying people to sit around and smoke pot; but (as gdub also mentioned), given that nobody has proposed any cheap, working method of distinguishing, I’d prefer to just pay them all and let non-monetary means sort them out, so to speak.
That’s unclear. It depends on how many people can’t find a private sector job, and how much valuable work there is to be done. I don’t think it matters a lot.
Lets also distinguish “productive” from “worth what it costs”. My labor might be worth only $5/hour, but the basic job pays $7.00/hour. If I’m deserving, I’m still willing to offer my $5/hour worth of value to help the people who are paying me and minimize the cost I create for everyone else.
It’s not that hard to create value, even if the value is less than what you’re being paid. Let me point out that in India, lots of labor is worth doing (and gets done) at a wage less than $7.25/hour.
I agree that there are jerks out there who will be actively destructive. I want to pay them nothing until they change their behavior.
” I want to pay them nothing until they change their behavior.”
Good luck with that. 1) It’s politically unfeasible. We don’t even let violent felons starve to death, we’re not going to let bumbling assholes die on the streets. 2) Even if it were feasible, you’ve just created a class of people who are willing to be destructive and have no legal means to not starve to death. They aren’t just going to quietly accept their fate. 3) You still have the disability problem, where there are some number who really can’t do anything, or can do next to nothing. The destructive jerks will lie and cheat to get these “easy” benefits – how do you keep them from doing so without making things needlessly painful for the actually disabled?
They do have a legal means to avoid starving to death. It’s called showing up to work and doing what the boss tells you.
I favor a Basic Job in part because it makes this transparent. With a basic job, it’s very clear that if anyone dies/has other negative consequences it’s entirely their own fault. Under the current system, there’s so much obfuscation that most people don’t realize this.
The truly disabled should still get disability, of course. When did I advocate eliminating disability? I agree that some level of disability fraud is unpreventable, but the current level is insane.
I’d suggest we’ve reached the optimal level of fraud checks when when disability claims become pro-cyclical (i.e. goes down during recessions) rather than counter-cyclical. If people lose their dangerous jobs, they should become disabled less rather than more.
It’s weird that starvation keeps coming up. Is the make-work program going to abolish food pantries and soup kitchens? I’m not even convinced anyone is really serious about completely replacing SNAP without a full UBI, since even some currently employed people are eligible for it.
“I agree that some level of disability fraud is unpreventable, but the current level is insane.”
The process, which produces an “insane” level of fraud in your estimation, is already a miserable Kafkaesque nightmare for the truly disabled that provides a pittance and actively discourages attempts to rejoin the workforce. So you’re again, making these people more miserable for the sake of keeping any lazy bastards from getting a free lunch.
Disability claims go up in a recession because unemployment insurance doesn’t last as long as recessions do. So yeah, maybe we ought to fix that if the labels matter that much to you. But making up jobs with artificially deflated productivity that no one wants to pay for doesn’t help society, it again, just makes a bunch of innocent people more miserable so you can be smugly assured that no lazy bastard gets a free lunch.
In a really deep recession I could see launching big government projects to do stuff that the private sector can’t raise capital for, or maybe providing temporary wage subsidies to minimize layoffs. But “make sure it takes 100 people to do a job that really only needs one” or “repair all these windows I just broke” serves no purpose other than avoiding free lunches. Leisure time has value – you’re proposing artificially crippling productivity so more people can be “employed”, producing no additional value while destroying the value of leisure time (and anything else that could be done in that time).
laughingagave – stucchio has stated that in their preferred world, if you don’t work (and aren’t provably disabled), you get nothing. Presumably they’d make the soup kitchen patrons wash the already clean dishes or something to prove a point.
It doesn’t serve any purpose as long as the job does get done with that one worker. If the choice is “throw 100 people at it, or give these 100 people unemployment-titled-as-disability checks and leave the job undone” – well, in that case, I’m leaning toward throwing them at needed infrastructure maintenance.
If there are 99 people at the work site not doing anything useful, the one worker won’t get it done. He won’t even break even fixing the various minor damages done by the layabouts. And I doubt it will be politically feasible to keep the 99 away from the worksite, if it is politically mandatory to pretend they are being paid for working.
It’s not really “people who don’t want to create value”. Not many people specifically object to creating value as a terminal goal.
It’s more like “people who don’t want to serve, which is a prominent cause of refusal to create value”. The two categories aren’t identical, but being in the former is a good predictor for being in the latter, so refusing to do a valueless job will be highly correlated with refusing to do a valuable job.
There will be some residue of people who won’t work in the valueless job because it’s valueless, but it’ll be dwarfed by the number of people who just have a general aversion to working in any job whether valuable or not.
The huge difference between UBI and public works/job guarantee (even if it’s busywork) is that you only take a public works job if you can’t get a job on the market, and don’t have any better option. With UBI, everyone would take it, and many people who can work would quit. This may make a job guarantee at least remotely feasible.
This is the same as the difference between a homeless shelter and a rent subsidy: a homeless shelter keeps one from freezing on the street, but it’s pretty shitty, so the only people who choose it are those who really don’t have any other option. It’s a built-in means test that’s much more effective than a conventional means test that can be attached to a rent subsidy.
As such, a job guarantee may even save money if it replaces unemployment benefits. Of course, implemented this way it’s a right-wing policy (aimed to minimize welfare usage and incentivize work), rather than a left-wing one. (Hungary’s right-wing government has replaced unemployment benefits with public works like this.) It works if the goal is to keep the poor from starving, rather than to give them a decent standard of living.
There already are a bunch of public works types jobs, for healthy, conscientious people, through the military and organizations like Americorps, Peace Corps, and some others. It would be fine to add some more, perhaps nicer parks and public amenities. I know people in those programs, and would do the trail building, park work, or other pro-social jobs if they were re-instated. They pay about as much, sometimes less than fast food restaurants, but can attract a higher caliber of worker because people feel better about them. The programs can be pretty picky, and leave positions unfilled if they can’t find someone pleasant, educated (usually) and who’s a net positive to fill them. They tend to operate in schools, shelters, reservations, and other contexts where it’s important to have trustworthy, respectful employees. If they were required to not reject anyone, organizations would probably simply stop asking for national service workers at all.
What kinds of jobs do you imagine the guaranteed jobs workers doing?
Saying “winding down basic income is easy” assumes we have an Income Czar who can just say “all right, let’s wind it down.” We wouldn’t have that. We have a democracy, and do you really want to be the guy running on “everybody gets less money each year”? It’d be like opposing social security, except even more politically impossible. Candidates—at least, the winning ones—will only ever pledge to defend or expand it. (This also probably makes UBI a fiscally unsustainable policy in the long term.)
Once those political incentives are taken into account, I think we should view UBI as an irreversible, and probably unsustainable, change to our economic system. Scott (or any other knowledgeable UBI advocate), do you stand by the assertion that UBI would be easy to end, and if so, why? (I probably prefer the status quo to UBI, for what it’s worth.)
UBI would be trivial to wind down. First, juggle taxes so that there’s a dedicated funding source for UBI (Under the guise of making sure that it can never be held hostage in appropriations bill filibuster.)
Then cut the tax. The agency administering the benefits will be forced to reduce the amount of the benefit. And it’s a lot easier to sell a tax cut.
Meanwhile, every winning politician will run on “Let’s fill in that dedicated funding source from other sources.” Or, further back in time, “My opponent wants to cut the billionaire tax funding your UBI!”
Just like they’re doing with Social Security?
Decius, if this comment is making a point at odds with Evan’s, I’m not seeing it. Social security is, if anything, the exemplar of an ever-expanding unsustainable welfare program that’s politically impossible to oppose.
Is there something I’m missing?
I also immediately noticed that the word “empirically” in the second “wind down” sentence was very conspicuously missing from the first.
And now I’m curious: if we *did* talk about what empirically happens when you wind down a transfer payments program, what would we be able to say? What are the historical examples?
I guess they did manage to bump Social Security’s full retirement age from 65 to 66 (albeit with an often-literal grandfather clause), and it’ll likely go all the way up to 67 in the near future. Or, looked at another way, while life expectancy at 65 went up by 5 years, we managed to only increase average payments by 3 years.
Bill Clinton and a Republican congress managed to pass some sort of welfare reform, but it seems to have been more of a reduction in eligibility than a reduction in payments to those deemed eligible, so I’m not sure if it counts either.
Are there big examples of winding down transfer payments that I’m missing, or is the result here “empirically, winding down basic income doesn’t happen”?
I agree that repealing it would be a political impossibility.
Senator Johnson: “UBI is not working out. The costs have spiraled out of control and the economy is on the verge of collapse.”
CNN: “SENATOR JOHNSON WANTS TO RAPE AND MURDER ALL POOR PEOPLE”
UBI is a one-way program. It’s utopia or bust. Unfortunately, utopia is hard and busting is easy.
ETA: I would definitely insist on an end to universal suffrage were this to take place. You must have skin in the game to vote. Otherwise those on the dole will never vote to end the dole no matter how bad it gets for everyone supporting them.
If welfare payments to the poor are popular enough that winding them down is impossible in the US why is there the horse-trade of farm subsidies for food stamps happening in congress?
UBI is not a welfare payment to poor people, it is free money to the middle class
Do you think there is any danger of the food stamps program ending? Do you think anyone is making any serious push to end food stamps?
What they do is make it so the requirements to get food stamps disqualifies you from getting food stamps.
Example: In Ohio, if you go to college, you MUST work part time to qualify for food stamps. But if you make more than 20 hours worth of min wage per week, you make too much to qualify for food stamps. And almost every part time employer hires for 20-25 hours a week. So if you’re going to college (whether it be community college or university), you can’t get food stamps.
No, but if the proposed rules are enacted, a couple of million people will be off food stamps, many of them for Kafkaesque reasons rather than because they were simply sitting around at home doing nothing.
“Oh, so sorry, your arbitrary asshole of a boss didn’t pay you to work for enough hours this month, that means you lose your SNAP food stamp benefits and can’t reapply for a year, buh-bye!”
There are in fact a lot of ways to shrink or abolish a welfare program, when a large enough slice of the population harbors stereotypes about how everyone who relies on welfare to live is just a horrible layabout mooching off everyone else’s money, and that they’d all be able to find productive jobs if they just tried harder. Which is more or less the status quo in the US, and it’s doing far more to increase human suffering for the unemployed and underemployed than it is to promote any real good for our civilization.
Note that “everyone works as hard as they can” is not a good outcome in and of itself, because it invites the question, “works as hard as they can toward what end?”
Moloch metaphorically loves scenarios in which everyone has to work as hard as they can and compete with ever-rising standards of ‘workforce participation’ to stay alive. They are ideally suited to creating Moloch-type outcomes in which everyone is miserable for a reason no one specifically wanted.
I wonder if you could take the same strategy lots of private companies take to avoid handing out pay cuts? Let inflation eat away the real value. If the UBI isn’t automatically increased to match inflation, letting it sit or increase slower than inflation would chip away at its real cost while nominally increasing or staying the same.
Of course, I don’t see how you would pass a UBI without tying it to some sort of inflation measures, so that is sort of just shifting the problem upstream. The same kind of political pressure that would be against lowering UBI would also be against not tying UBI to inflation or allowing UBI to be pared back by inflation.
This exact same thing happens with minimum wage. Make of that what you will.
This is a good suggestion. We pass lots of things that aren’t inflation-adjusted, and this should probably be one (especially because of vicious-cycle worries). But I still think candidates would probably line up to make it inflation-adjusted, or just regularly raise it, in spite of any fiscal problems. And those candidates would get elected.
In the US? I don’t think so.
Candidates who want to restore the minimum wage to the inflation-adjusted value it would have today, if it had been increased to track inflation since its inception, have trouble getting elected in many constituencies.
The claim that empirically, candidates who advocate for expanding welfare programs will always win elections is offset by the fact that empirically, this is exactly what has not happened. The United States Congress has had Republican majorities in one or both houses for 10 of the last two-year 12 congressional terms, despite having explicitly run on anti-welfare platforms, against pro-welfare opponents, for that entire time.
You are thinking of candidates who want to lower the minimum wage to $4/hour? That’s about what FDR’s $.25/hr minimum wage in 1938 works out to, inflation adjusted.
I’m not aware of any such candidate, but you are probably correct that if there were one he would have a hard time getting elected.
I didn’t say “increased to track inflation AND ONLY increased to track inflation,” now did I?
More generally, the point remains. If entitlements and measures like UBI were truly stuck on an eternal upward ratchet, then the same pressures causing the ratchet effect should prevent the constant-dollar value of the minimum wage from ever falling. While that value rose considerably from its all-time low before reaching its all-time high, it has since declined considerably from the all-time high.
This argues that under some political conditions, it can indeed become popular to not ensure that an entitlement program be set up with inflation-adjustment built into the process. Since that is precisely what happens with the minimum wage.
You said:
I pointed out that if it had been increased to track inflation since its inception, it would now be much lower than it is, when your comment obviously took it for granted that it would be higher.
Having discovered that you were wrong, you might want to admit it before making another argument.
Once people have experienced a few years of not working, they are going to fight tooth and nail against anything that puts them back to work.
We have real data on long-term unemployment and how fucking devastating it is to most people, and it’s not just the economic damage, it’s the fact that they have lots of trouble re-entering the workforce.
It’s not easy to wind down a program that has people not working.
If the alternative is starvation, then the alternative is starvation.
I think the only reason most people don’t fight tooth and nail against working is that it won’t get them anywhere.
It’s an interesting line of argument that defends something on the basis of how much people given an alternative hate it. [/mild snark]
You don’t see a problem with everyone choosing not to work because they don’t like it? Why would anyone like it? It’s doing what someone else wants you to do instead of what you want to do. It’s also what maintains civilization. If everyone who doesn’t want to work doesn’t work, you literally are risking civilizational collapse.
I am moderately pro-UBI but I think we need more research.
Would you give up your current job for, say, a UBI of 15,000 a year?
jimbarino:
Beware Typical-Minding!
Would I give up my pretty highly-paid, very intellectually stimulating job that involves a very pleasant work environment and doing stuff I really like, to go on UBI and sit in a trailer in my underwear playing video games all day? No.
Would someone working a really shitty job bagging groceries or sweeping floors somewhere? I don’t know, but I’m pretty sure my answer doesn’t give me much insight into theirs.
Cliff:
The thing is, markets work well for this kind of problem. If not enough people want to do shitty jobs at $20K/year after they’ve started getting their UBI checks, you can almost certainly increase the number of people willing to do them by raising the salary to, say, $30K/year. That will drive some companies out of business, but really essential jobs will get done.
The only place this won’t work is for jobs that are so horrible, that people will do them only if the alternative is literal starvation. But we don’t see many people starving in the US, so it’s hard to imagine we have a lot of people in this situation.
If we had the will to enforce “you work or you starve” we would be doing it already.
I suspect that there really is a ratchet-effect of UBI, in the sense that if we end up with a large class of 40-year-olds who have never worked, and then we decide we need to cut back on the UBI payments and tell them to get a job, they’re going to:
a. Be very, very pissed off about that.
b. Have a hell of a time joining the workforce for the first time at 40.
Agree. Scott’s post is a good example of why guaranteed jobs is a dumb idea, but a lot of the same arguments work against UBI. “Oh you better figure out how to get a job because UBI is going away” is laughable.
UBI does get one thing really right, which is that it takes away the insane marginal taxes that the welfare system imposes. But that doesn’t mean it works.
@Edward: I think I’m entirely in agreement with your final comment as regards UBI, at least based on the arguments I’ve seen.
I’ve heard of a proposal to replace a great number of welfare programs with an expanded EITC, which seems to me like a good idea for getting rid of those high marginal tax rates.
It’s sad that we’ll never see that passed, either.
I’d be very much in favor of a wage subsidy. That is something you can dial up and down. People are still working and maintaining their “showing up for work every day” habits. It doesn’t even need to be 40 hours a week; we could cut to 32 hours for the “WORK SUCKS” crowd can enjoy some more leisure. If it turns out to cost too much, it’s a lot easier to transition someone from 4 to 5 workdays than from working no job to working a job.
Once again, everyone ignores the elephant in the room: lazy people who don’t want to work and who will gladly free ride. Hell, I wouldn’t work if I didn’t have to. I would sit on my ass, play computer games, and smoke pot. Would you be OK with working your ass off, paying taxes so that I can laugh at you for being a sucker?
Moreover such a policy would just enable women to stay at home and raise children. Can you possibly get more anti-feminist than that?
— Simone de Beauvoir
I’m kind of confused what you’re trying to say. But, I think the idea is that the folks working their asses off and paying taxes also get paid and then can spend the additional money on stuff.
It’s impossible to enact a program that gives *everyone* more money than before. Middle-income people would get UBI, but would also have their taxes increased by about the same amount. Upper-income people would see their taxes increased by more than they receive.
Modern feminists do not usually agree with your quote. A woman choosing to stay home is not anti-feminist, a woman who stays home because she does not have a choice is anti-feminist.
Just to be clear about what I think your point is, “a woman who stays home because she does not have a choice” is not herself an anti-feminist, but in a situation that feminism is against.
The typical levels of UBI under discussion wouldn’t be enough for you to afford computer games and pot.
If the amount of UBI isn’t high enough to allow real leisure, then it’s not going to be high enough to allow the human capital building that Scott waxed so eloquently about. A computer you can use for learning to code or looking for a new job can just as easily be used for video games.
You can learn to code on a 40 dollar raspberry pi and a cheap monitor. Technically you can also game on that, but we’re talking Super Mario, not the latest Dark Souls.
Classes of almost any variety cost more than gaming (and if you’re living at the level where you can’t spare a couple hundred bucks for an xbox there’s not much slack for emergencies).
Presumably a guaranteed income and Scott’s reference of elaborate insurance plans to follow are sufficient to cover emergencies, and the internet already provides the resources you need to teach yourself to code. I suspect there would be people willing to teach for free as well if their own income requirements were guaranteed.
I don’t disagree with your general point though. Someone given 10k a year wouldn’t have a hard time getting plenty of video games and weed if they rented a cheap room and lived off rice and beans.
Did App Academy go out of business already? What’s the upfront cost of attending coding school?
On the margin, a UBI would help. Scott’s patient who couldn’t handle night school and a full time job could instead get a part-time job to supplement the UBI enough to buy a computer.
There’s a difference between working through college on a part-time job and playing video games and smoking pot.
In which case they are insufficient to allow you to afford food (probably) and rent (definitely). Also, don’t get ill.
All the arguments for and against UBI com down to this point; a low UBI is indistinguishable from a zero UBI, which is the world outside your window. A high UBI is indistinguishable from post-scarcity communism. Which is presumably great if your economy can support it, and is going to kill more people than Mao if you are wrong.
I feel like there are some steps in this argument missing somewhere.
Set UBI at a level such that, after cultural adjustment to the economic reality, x% of people want to work. And given the feasible level of automation, y% of people need to work to provide food, shelter and basic necessities for everyone,
If it turns out x < y, you have to abandon the premise of UBI being a viable basis for a happy life. History suggests it takes several megadeaths to abandon an economic system that had enough backing to actually be enacted.
Market economies in developed societies can’t feasibly experience that failure mode, because y is not 100 or 90 or even 80. The market will reshufle, and rising demand for necessities such as food, shelter, and medical care will promote higher salaries in those industries. Resulting in workers flocking TO those industries (such as food, shelter, and medical care) at the expense of luxuries such as travel, paid entertainment, and marketing departments.
There may be some disruptions on the margin. I suppose we might have, specifically, something like a year of no fruit crops in the US. Because of fruit going unpicked, because the fruit-pickers all quit since getting UBI is a lot better than picking fruit, and because the orchard-owners were too stupid to pay their pickers a worthwhile wage. But the economy as a whole won’t just shrivel up and die if 10% of the population stops working voluntarily and still has money to spend paying other people to keep working.
Both because y is simply not that large anymore, and because of the way markets work… The slice of the population that would stop working on any plausible UBI that might be enacted between now and, say, 2030, is much too small to create the outcome x<y.
UBI will not cause a collapse of civilization, because to do so it would have to use something approximating 100% taxation of wealth to scrape together enough money to pay everyone such an appealing UBI that working in a necessities-of-survival industry seemed unappealing by comparison.
>getting UBI is a lot better than picking fruit
If that is your definition of UBI, then you have abandoned the premise that being on UBI is a viable basis for a happy life.
Giving a space shuttle the name ‘Enterprise’ didn’t mean it could go on a 5 year mission to seek out new civilisations. And correspondingly meant that an explosion of the main engine didn’t wipe out most of the western hemisphere.
The same goes for the reality ‘welfare reform 2.0’ and name ‘UBI’.
Firstly, I’m not clear on how “being on UBI is a lot better than picking fruit” would involve abandoning that premise. I mean, eternal happiness is a lot better than picking fruit too, and I think we can agree that, tautologically, eternal happiness would make for a happy life.
😛
I mean, maybe there’s a misunderstanding here and what you meant is something else? Like “if UBI ISN’T much better than picking fruit, you’ve abandoned the premise that UBI is a viable basis for a happy life?”
To which I reply “Yes, yes you have, but you’ve instituted a valuable step in the direction of enabling people, who would otherwise be miserable, to be happy. UBI doesn’t have to do everything in order to do anything.”
A UBI that is enough to permit a genuinely comfortable (read: lower-middle-class) lifestyle all by itself is going to have to wait for a time when we are much closer to post-scarcity than we are today. But we could at least make a start in that general direction, and crank the money transfers up if and when it seems appropriate.
No, an “insufficient UBI” means that the person currently working 80 hours a week a two shitty jobs can quit one of them, taking a bit of an income hit but feeling better off despite that. Or it becomes a cushion so they don’t need a payday loan if their car breaks. Or whatever.
In no way is this equivalent to no UBI.
Would such a person be a net beneficiary of a UBI? Typically the impoverished work every little, right?
Someone working 80 hours a week is pulling down at least 30K a year.
There is this group “works 40 hours a week but is still in poverty” that is imagined by some to be very big. It exists, but it is not that big. If you are in poverty, your chances of being a full-time worker some time in the past year is less than 10%.
Well, fair enough. But there are definitely a lot of people working multiple jobs, and often the net benefit of the second or third job (after cost in time, travel, daycare, etc.) is not all that high, so a sub-subsistence UBI could keep them at their current usable income level while still giving a significant quality of life upgrade.
Why would a low level of UBI be indistinguishable from zero UBI?
There are a very large number of people in America for whom a few hundred dollars of extra money a month would make a significant difference in their lives.
I mean, in the extreme low-value limit, a UBI of $5/month probably won’t be clearly distinguishable from a UBI of $0/month. But a UBI of $200/month, quite low, should be clearly distinguishable for the good and simple reason that $200 is distinguishable from $0.
Cranking UBI up to ‘satisfactory living wage for everyone in country’ levels is something you can only do in a post-scarcity utopia, which is exactly why you don’t start it there now. You start it at a lower level that is more sustainable, and which acts as a supplement to income or a way for a person to survive on an extremely minimal and unsatisfactory level. If and when society gets utopian/productive enough to afford better, you give people more.
If everybody has an extra $200/month to spend, then rent raises by $50/month, food goes up a little bit per piece making it $50/month more than it was, and the student loan companies that were giving the poor graduates $0 income-based payment start demanding $100/month. So the expenses just got raised by an extra $200/month, effectively cancelling out the UBI.
Whereas, UBI that a person can actually live on causes economic upheaval and the hope is that once the upheaval is over, everyone will be a little better off than they are now.
But everybody doesn’t have an extra $200/month to spend. The people whose taxes are paying for the UBI, for example, don’t have an extra $200/month. Even if they are simultaneously collecting UBI, there ultimately has to be a group of people who have less money to spend. It’s a wealth transfer program, in the form of a money transfer program, and on the net should be neither inflationary nor deflationary.
It could be inflationary in specific sectors, if e.g. stupid zoning laws prevent the market from shifting land use towards low-income housing.
The typical levels of UBI under discussion wouldn’t be enough for you to afford computer games and pot.
How much do you think these things cost??
I honestly don’t know what pot costs, but I could be super-entertained 80 hours a week by computer games for much less than $1000 a year.
After hardware and utilities are abstracted out, the typical cost of video game entertainment is around $2/hour. You might be able to cut that in half, but there’s no way you can buy enough game to be super-entertained for 50 cents an hour.
Bargain bin games are $20, and good for 10 hours. The $60 price point is typical, and roughly none of them are good for 120+ hours.
but there’s no way you can buy enough game to be super-entertained for 50 cents an hour.
You don’t know me, man.
According to Steam, I have about 200 hours logged on Skyrim. I paid somewhere on the order of fifty bucks for it a few months after launch. That comes to 25 cents an hour, and I’m not even a very serious gamer.
It’s an unusual game in terms of RoI, but if I was looking to entertain myself with single-player video games for eighty hours a week, I’d probably be looking for unusual games.
You seem really stuck on a particular model of computer gaming.
I game exclusively on a $400 iPad, which lasts me ~4-5 years, if I were unemployed and unmarried I would probably do much more than 500 hours of gaming a year, or $.20/hour of gaming.
Powering the iPad is vastly less than 10W * $.30/kWh = $.003/hour.
The most expensive game I’ve ever bought was Civ VI for $20, which I’ve played about 100 hours on, or $.20/hour.
More typical is Race for the Galaxy, which cost $10 and I’ve probably played for about 250 hours, or about $.04/hour.
I’d say I remain very entertained for between $.25 and $.45/hour.
My eternally underemployed friends from my hometown play consoles, and they usually alternate between a popular online shooting game of the moment (COD, Overwatch, GTA, whatever) and a sports game (FIFA, Madden, NBA 2k, etc.). They get way more than 120 hours per game they buy.
These are not rich people, usually they just have whatever money they can bum off their girlfriend or parents (who aren’t rich). And they have pot, too, which is only going to get cheaper now that it’s legal in more places. It’s not an expensive lifestyle.
I’m not an expert here – this is second hand. However, I’ve been lead to believe that illegal drugs, even one as easy to produce as pot, are pretty expensive. A full-on stoner can spend hundreds of dollars a month on a habit, much like a heavy drinker might, but with the premium for it being illegal.
More moderate pot use is a lot more manageable, and if it were legal (both federally and state), the price should go way down – you can grow it in your own back yard if you want to, and there’s a reason they call it “weed” – it doesn’t take an expert gardener to grow it.
Video games are probably going to be pretty cheap if people can quit working – there are a ton of people who make free or extremely cheap games *now*, between paid work. If you offered a bunch of engineers $15,000 a year, no strings attached, a ton of them are going to make video games with their newfound free time. After all, you can do this remotely, even as a 1 man team, and if you move somewhere cheap you can stretch 15k out pretty far if you have basically no expenses. Even a small profit gets you to the point where you can survive and have a few luxuries.
Video games are really, really hard to make, compared to typical corporate IT work, which is where your typical low-achieving engineer ends up.
Ever try synchronizing game logic, audio, and animations?
That is hard. Synchronizing database access is trivial by comparison, and most people fail horribly at that.
People working get to wave their wad of bills at you.
UBI isn’t communism. You still get paid for work you do. it just means you don’t have to starve to death if you don’t have a job.
You get to wave the small amount the government lets you keep after all the garnishing needed to pay for every single layabout in the country to drink themselves into a stupor and then for the food stamps, housing vouchers and public health insurance they’ll demand once their booze money runs low. I guess that’s a bit anachronistic; today it would be meth money.
And they get to laugh at “your” wad of cash because while you’re working hard to support them they’re playing video games and fucking your daughter.
So no, it’s not communism. It’s a kakistocracy, an inverted aristocracy where the worst specimens of humankind are subsidized at the cost of a shrinking productive minority.
You know you get the UBI too? The median person will probably find themselves in the same place.
Whoopee! I can get a small percentage of the money I pay in sent back to me.
That’s definitely worth having the majority of my earnings taxed away to fund the dissolution of society.
Nice strawman.
That ‘small percentage’ is still as much as any of the people you’re afraid of has. Plus you still have more after-tax income than anyone who isn’t a net beneficiary. All your positional goods are absolutely less expensive, so what’s the problem?
“… More generally, the present results suggest that political debate might be more productive if partisans first engaged in a substantive and mechanistic discussion of policies before engaging in the more customary discussion of preferences and positions”
You know what? I had a long argument as to why I didn’t think this would happen, but actually I am completely okay with this outcome. It’s not ideal, but what we have now is an actual aristocracy where a tiny fraction of people spend millions on their personal jets and other useless luxuries. At least if you give all the money to the poor and they drink/smoke/inject it away you’re making millions much happier rather than a couple of rich idiots feel fractionally better about themselves.
What percentage of their income do you think that someone in the top 1% of the income distribution consumes?
You can Google it in under a minute and see what percentage of a millionaire or billionaire’s income goes to private jets versus being reinvested into the economy where it can produce more of the goods and services that the rest of us consume.
I’m going to hazard a guess that the number will surprise you.
@Nabil ad Dajjal
Of course here is a fundamental disagreement. You see non-consumed (“invested”) resources as being “reinvested into the economy where it can produce more of the goods and services that the rest of us consume.” I see too many “invested” resources [i.e. $$ in the hands of corporations] being used for non-productive purposes like manipulating the stock price, hiring lobbyists to tilt the playing field, paying off those your executives shouldn’t have been abusing, and implementing policies that transfer costs and risks from the corporation to employees, customers, and the general public.
Some entrepreneurs sometimes innovate in ways that benefit humanity/society overall. I’d guess, without evidence, that the more established/rich the entrepreneur, the less truly useful innovation they currently provide, regardless of what they may have done in the past. And of course some simply provide a needed product or service in a way that benefits everyone involved … unpopular though that seems to be among modern MBAs.
And then of course thre are the corporate raiders – aka “activist investors” – that buy up stock to force corporations to do things not in anyone’s long term interest, for the sake of short term profit. Leading e.g. to the well-publicized demise of Toys “R” Us.
I don’t have statistics, just personal observations of
a) lots and lots of non-productive behaviour
b) lots and lots of untruths from the publicity organs of the corporations involved in the non-productive behaviour
And this is in spite of filtering my employment decisions to avoid corporations with bad reputations for this kind of thing. (I get most of my clearest anecdotal evidence as an “insider”, i.e. by working for the corporation in question.)
Dude, no. You’re saying we would be better off if capital available to businesses was reduced because businesses on average are a net loss to society? That’s so incredibly off-base.
It’s not about averages, it’s about marginal dollars and diminishing returns. Apple Computer is a hugely productive and valuable corporation, but it’s also sitting on huge cash reserves that it’s most definitely *not* investing in much of anything. Giving it extra monetary capital, in the form of, say, a corporate tax cut, will do bupkiss for world productivity. The recent corporate tax cuts in the US mostly went to fund share buybacks, not investments in productive capacity. At this point, a dollar given to the US Government in taxes is more likely to benefit the world than another dollar sitting under some corporation’s proverbial mattress.
Do you think Apple has a very large stack of currency hidden somewhere? I would give heavy odds that their huge cash reserves are in the form of interest bearing assets–government securities, bonds of other corporations, and the like.
@ Doug S.
.
This is not correct. You can look @ the list of what Apple has invested in in their 10-K or Q. Primarily corporate bonds and treasury bills. So rather than not investing, it is totally invested.
This ties into below, but when a company makes money, it returns that money to shareholders. Those shareholders then use that money to increase world productivity. No different that if the money were taxed, and the government used that money for increasing world productivity. The only question is whether you believe the government or the shareholders are better stewards of capital. But *bupkiss* is just wrong.
This is very misleading.
First, note that stock buybacks are only a thing for publicly traded companies, which comprise less than 1% of the companies in the US, and about 30% of the non-farm private sector employees. So the tax savings from these companies cannot have been used by these companies for buybacks.
Second, the primary near term cause of stock buybacks has been the repatriation of profits held in foreign subsidiaries, often by technology companies. As an owner of a company, you do not want that company holding cash or securities. The returns to the company on that capital are almost certainly less than the ROE of its operations. However, due to the higher corporate tax in the US vs. other tax regimes, companies did hold cash abroad to avoid the taxation. This is ending.
So what we see is a one-time repatriation, taxation on that repatriation, and then companies returning that money to shareholders. At present, buybacks are more tax efficient than dividends.
And finally, you can expect stock repurchasing to continue to rise in the future as industries continue to consolidate and large global industry leaders reach their inefficiencies of scale, and simply return capital rather then trying to grow.
I feel as though you could have made your point just as well if not better without this.
+1
Hard disagree, it’s actually awesome and to be encouraged for people who oppose welfare to let it all hang out the way he’s doing. Let people be in no doubt as to what their motives are. The ones who disguise their feelings are far more threatening.
While there are better arguments against UBI, it made it clear that the point was signaling “fuck the poor”.
@fion:
Nabil may not have expressed it in the most agreeable way, but he does raise an additional relevant concern here about UBI: it is likely to increase the reproductive success of unproductive males by transferring one of the few reproductive advantages of productive males.
We probably don’t want this sort of sexual selection.
Who cares? I don’t consider that particular concern to be relevant at all. There are probably some genetic factors that predispose people to laziness or industriousness, to varying degrees, but overall I would say that inclinations toward productive behavior are largely learned, not inherited. At any rate, poor people already have more children than middle-class or rich people, on average. This isn’t because poor people are outcompeting middle-class/rich people in any meaningful way, it’s because middle-class/rich people generally choose to have less children. It hasn’t lead to any kind of dysgenic crisis yet, I’m highly dubious of claims that it will, and at any rate, I don’t really see how UBI would make the situation worse.
Given the large role that genetics play in human behavior, what basis do you have to say that low productivity is largely learned rather than inherited?
In the absence of social safety nets, r-selection strategies lead to fewer children surviving to reproductive success. Regardless, you’ve given an argument against safety nets.
To ensure that we’re having a productive conversation, could you please provide an idea of what kind of evidence it would take to convince you that there is a dysgenic crisis?
Nabil and many other commenters have already laid this out, but to summarize:
For multiple reasons, UBI will likely grow the welfare state. The larger the welfare state, the more you are incentivizing unproductive behavior, increasing the sexual success of the unproductive.
What basis do you have to say otherwise? Are there any studies demonstrating not only that lazy people are more likely to have lazy children (which itself is a claim that I’m skeptical of), but that it’s specifically a result of genetic factors rather than environmental ones? (Keep in mind that environmental factors could range from ‘the child saw his parents being lazy while growing up and thus learned emulate their behaviors’ to ‘the parents and child all grew up in the same third world slum where they suffered nutritional deficiencies and exposure to harmful chemicals and now have chronic fatigue as a result.’)
1. Humans as a species are K-strategists, so applying the concept of ‘r-selection strategies’ to human reproductive behaviors is nonsensical. I can only find a single prominent example of a scientist claiming otherwise (J. Philippe Rushton, who’s a psychologist rather than a biologist or geneticist), and his theories have been almost universally rejected by the mainstream scientific establishment. He also seems to be a racist or at least xenophobic crank with borderline ethno-nationalist views, which doesn’t exactly inspire confidence from me.
2. There is absolutely no situation in which I would ever agree that ‘fewer children surviving to reproductive success’ is a desirable outcome. I know plenty of fiscal conservatives and right-libertarians who argue against social safety nets for a variety of reasons, some of which I partially agree with, but I’ve never heard any of them argue that more poor people starving to death is a good thing. That’s just completely despicable.
Significant data showing that levels of physical and mental health, physiological fitness, or intelligence have greatly decreased over the past few generations, even after accounting for circumstantial factors (e.g. people being in worse shape because they have less healthy diets, more people being diagnosed with mental illnesses because the psychological establishment has gotten better at identifying them). Alternatively, significant data showing that rates of serious genetic disorders have greatly increased over the past few generations.
Productivity depends on many more factors other than laziness; please refer to our discussion in the other thread.
Further, because we do know that virtually all human behavior (and in fact, the behavior and traits of all living creatures) has a large genetic component, the safe assumption is that any given behavior follows this pattern until we have evidence showing otherwise.
It’s really, really, not. Not to mention everything we know about fertility and intelligence. These results are merely politically incorrect for the same reason that studies on IQ are.
Regardless, I merely used “r-selection strategies” as a short-hand for “more children and low paternal investment”, so feel free to substitute that in.
It may not a desirable outcome, but it’s an important disincentive that gets removed by social safety nets, thereby incentivizing more fatherless children in a vicious cycle.
Your attempt at moralizing this topic rather than debating this has been duly noted, but it doesn’t resolve the very real concern that UBI will simply incentivize more impoverished children, something that should probably cause you moral concern as well.
Thank you for the clarification. I suspect that “significant” is a weasel word here (especially given the deck-stacking against politically incorrect studies), but I’ll assume good faith.
Please refer to here, here, and here.
If you look deep enough, then yes, virtually every aspect of human existence is genetic, but that doesn’t mean that specific behavior patterns directly correspond to specific sets of genes/alleles. It’s not “these genes encode neuron structures that result in unproductive behavior,” it’s “these genes encode neuron structures that can result in a wide variety of behaviors, some of which may be productive and some of which may be unproductive, with a vast multitude of developmental and environmental factors – both biological/physiological and psychological/social – determining which of those behaviors end up being expressed.” A clone of Hitler raised by a normal middle-class nuclear family won’t end up becoming Chancellor of Germany or starting World War III, he’ll probably just wind up being some random used car salesman or a middle-manager in an office somewhere.
So we should let the children of r-strategists starve to death in order to keep them from growing up into r-strategists and having more children who’ll grow up poor? That’s like saying we should sterilize people with disabilities to keep them from reproducing and having more children who’ll have disabilities. And at any rate, I disagree with the assertion that people become r-strategists for genetic reasons, since it seems more likely to me that cultural and socioeconomic factors are responsible.
Again, middle-class and rich people are less likely to have children simply because they don’t want to. It’s not because they’re genetically predisposed to be K-strategists, it’s because they’re more educated and have better access to contraceptives.
We don’t need to know the exact mechanisms to recognize that it is safer to refrain from incentivizing unproductive behavior or sexual selection for unproductive behavior.
It’s similar to how I don’t need a deep understanding of genetics to realize that it would be safer to refrain from encouraging the breeding of dogs that bite humans.
Or maybe we should organize our societies along the lines of the lobsters?
Or maybe you can engage with the actual argument that one downside of UBI is that it incentivizes the sexual behavior of unproductive males?
Fine, I’ll engage with that argument as bluntly as I can: I don’t care. I can think of a dozen reasons to support UBI and a dozen reasons to oppose it, and that one ranks at the absolute bottom of my list of concerns. In my view, it’s tied for last place with that silly “UBI will make more people commit violent crimes because they’ll be bored and need ways to impress people” argument that someone was throwing around earlier in the thread.
You don’t even know what my political interests are. At any rate, I’m not ignoring the data, I’m offering alternative explanations for the correlations you’re presenting me with.
And which of the following theories do you consider a more likely explanation for that correlation?
1. Intelligent people are genetically inclined to be K-strategists.
2. Intelligent people in a modern industrialized society are able to find satisfaction through methods other than having children (e.g. living a life of luxury, earning the respect of one’s peers, or just being proud of one’s own achievements), and are smart/educated enough to realize that having children may get in the way of pursuing these other forms of satisfaction, which makes them inclined to choose to have fewer offspring.
My money’s on the second option. But I suspect you’ll disagree with me on that point. (Also, the link you posted isn’t working.)
I appreciate your candid answer.
My candid answer is that you’ll care much more as the tax base shrinks, crime rates rise, infrastructure decays, and more men opt out of contributing to society in favor of video games, drugs, and porn.
Demographics matter and incentives matter. Ignoring these fundamental truths of human nature turns out poorly for societies.
The second option still stems from a genetic cause: intelligence. It doesn’t matter that intelligence is not the immediate cause; smarter people still opt for k-strategy due to their genetics.
My mistake for botching the formatting. Here you go.
You… uh, you ok there? Feels like this isn’t about UBI anymore.
I’m ok, thanks.
UBI just pisses me off because it’s such a perfect encapsulation of everything wrong with our society today.
I don’t think I’ve really looked at UBI through anything like a Culture War lens before. Is the argument that the idealistic post-scarcity UBI dream is inherently in conflict with human nature, or that it would exacerbate and crystallize current weaknesses in US culture, or that the transition would be prohibitively destructive? I don’t think any of those three would be deal-breakers in the long run, but they suggest very different strategies.
I believe the argument is that it fails to punish the baddies, such awful malcontents as Nabil’s daughter’s boyfriend.
@Dan L,
All of the above?
1. The very fact that we’re seriously discussing UBI reveals how hillariously out of touch and self-righteous our ruling class is. UBI is an idea that anyone with a functioning brain should realize can’t work. But it sounds so compassionate and enlightened that it just has to! Don’t those greedy middle-class jerks realize that we could be in a utopia!?! All we need to do is to figure out some minor implementation details, like how to beat human nature and arithmetic.
2. UBI highlights the injustice of spending other people’s money as charity. Welfare is bad enough but at least welfare proponents usually have the decency to pretend that the money is actually going to people who are just temporarily down on their luck. Here there’s no pretense: it’s taking the pay from working people in order to finance the leisure of layabouts.
3. The perverse incentives behind UBI aren’t new, it’s the same crap that’s been ruining this country for decades. Subsiding bad behavior at the expense of the well behaved has never, not once, failed to worsen the very problems it’s supposed to alleviate.
4. Related to 1. and 3., the proponents of UBI are just so damn blasé about taking away other people’s property and franchise. It’s not like we have any right to keep what we earned, or even to have any say on what that money is spent on after it’s taxed. Hell, why not throw open the borders and share our money with the whole world! It’s not like we have any claim to it after all.
5. UBI would, if implemented, permanently destroy the economy and civil society of the United States. This one would be #1 if I thought there was any real chance of UBI actually being implemented.
Also, you guys know that I don’t actually have any kids yet right?
I guess this post must have been linked somewhere.
Do yo have a lawn?
First, it isn’t our “ruling class” that is seriously discussing UBI, for any meaningful definition of the term. It’s a bunch of bloggers and a few journalists and a handful of mostly-apolitical rich people, and it’s us here and people like us in places like this.
Second, I think the UBI can work, if properly implemented. So does our host. So did Milton Friedman, who you may recall earned a Ph.D. and a Nobel Prize in the relevant field. Is this really the class of people you want to dismiss and insult as “not having a functioning brain”?
Consider the case where all humans are layabouts. There’s a far mode sense in which UBI is insurance against becoming useless in the future. There is also a near-mode sense in which all forms of welfare are insurance against becoming unable to work — since most welfare goes to the elderly and disabled.
@John Shilling:
Milton Friedman favored a Negative Income Tax that would replace the existing welfare programs. His idea was that we would look at how much we were willing to spend on welfare and allocate that entire amount via a negative tax while cancelling existing welfare and shrinking that bureaucracy. If you think this is mathematically equivalent to a UBI, you’re wrong on at least a few counts:
(1) the UBI currently under discussion does not appear intended to replace current welfare programs (which was kind of the whole point for thinkers at the time)
(2) the “Basic” part of UBI suggests a much larger payment than we could practically afford or than was suggested by his plans
(3) the “Universal” part of UBI means we get massively larger deadweight losses since taxing somebody and then giving them that amount of money back is NOT the same as not taxing them in the first place – marginal incentives matter!
(It’s also worth noting that his original advocacy of Negative Income Tax was in the 1970s when the War On Poverty programs were still relatively new and less entrenched than they are today.)
This makes it seem like your core reason for opposing UBI is more personal than economic. Does it bother you that, under the current system, there are people who are born rich and never have to work a day in their life and can still afford to spend all their time vacationing in the Caribbean? If not, then what’s the fundamental difference? (If it’s just the fact that you don’t want your taxes to go up to fund the UBI-recipient’s hedonistic lifestyle, then that’s a perfectly valid reason to oppose UBI as a policy, but I still don’t understand the level of vitriol for the people who’d benefit from it.) And if the existence of the trust fund heir does bother you, then why aren’t you opposed to capitalism too, like all the leftists who resent the supposed parasitism of the rich? Or maybe you are opposed to capitalism for that reason, in which case, what type of system would you prefer?
At any rate, as long as the basic income doesn’t entail enough money to live comfortably or luxuriously on – which even the high-end proposal of $10k/year wouldn’t really allow for – people will still be incentivized to work. The point of UBI is not to give everyone whatever they want for free, it’s just to keep them alive and in relatively good health (e.g. not suffering from nutritional deficiencies from lack of food, not being homeless and unsheltered, not lacking basic amenities like plumbing, heating, and electricity). If they want to play video games, or see movies in theaters, or wear decent-looking clothes, or buy cosmetic products, or go to a restaurant on a date, or go to the bar with some friends, or really have any kind entertainment and luxury in their lives, they’ll need to be getting extra money from somewhere, and for most people that will mean having some kind of job. That would certainly be enough incentive to keep me working even if I was getting a basic income, and I’ll freely admit that I’m rather lazy, so I’d imagine it would be a sufficient motivator for a large enough percentage of the populace to keep society functioning. There would probably be some people who’d rather live in barren squalor than do any kind of work for any amount of time, but I think they’d be a fairly small minority.
Not speaking for Nabil, but there is a big difference between people living a hedonistic lifestyle, and people doing so by taking the fruits of my labor.
The former, frankly is absolutely none of my business. I wish them well. But the latter situation not only harms me (by taking my productivity), it also creates a situation of free riders and suckers, with the workers being the suckers. This will lower the incentive to produce within the market, lower the incentive to cooperate voluntarily in mutually beneficial market interactions, increase the incentive to free ride on the productivity of others, and reduce (potentially collapse) the net productivity of the wealthiest median civilization in the history of the human race (median incomes are several orders of magnitude higher than the long term historic trend).
That the recipients will not thank the workers is pretty much guaranteed. They will instead complain that the workers are greedy for not giving them more. Intellectuals will then write articles in publications about how stingy the productive people are and how virtuous and deserving the recipients are.
In a properly functioning market economy the rich get rich by creating value for others. Producer surplus and consumer surplus. They are the ones who deserve our thanks and respect (though they are fine settling for the money). And in the end, that is what money is in a market. It is a fungible form of personal social capital. It is an accounting signal and incentive which reflects how much value an individual added to others adjusted for supply and demand. But this in NOT what a UBI is.
Swami –
You already have people living on the fruits of your labor.
One of the goals of a UBI is to create a path out of that; to make it such that people are never worse off for earning another dollar. And to do so in a way which isn’t going to get dismembered over time with means-testing.
(I do disagree with any UBI intended to make a lower-middle-class lifestyle feasible, however. Middle class people push for a social safety net that keeps them in the middle classes, failing to see what this does to the lower classes.)
Thegnskald,
I am aware that people currently live off the fruits of my labor. In theory I fully support a system which provides efficient social (and private) safety nets. I do not support a system current or proposed which penalizes work or incentivizes free loading. I agree with your other recent comment that a minimal UBI (of around $10 a day) along with communal housing or a tent would be fine in theory. In practice the tents and housing would be trashed in a matter of days.
I’ve seen the tent communities in Southern Cal, and driven by the old Cabrini Greens in Chicago. Pride of ownership, social capital and civic responsibilities don’t exactly jump out at the observers.
Safety nets are essential in any successful society. Poorly designed safety nets will destroy a society.
@LadyJane,
Swami’s answer was good and very similar to my own.
I don’t like the idea of trust fund babies burning through their families’ money and leaving nothing behind for the next generation. That’s why I like wills: parents should have the option to disinherit worthless children.
But that’s a lot more abstract because trust fund babies aren’t spending my paycheck. I don’t get up and go to work every morning so that I can support some bum who’d rather sleep in. That’s what’s so infuriating.
So again, is the problem just that you’d be paying more in taxes? What if UBI were implemented in a way that didn’t cause your taxes to go up (for instance, if it replaced all other forms of welfare other than Medicaid)? Better yet, what if UBI were implemented in a way that caused your taxes to go down (which is technically possible if the bureaucracy required to implement UBI turns out to be significantly smaller than the bureaucracy required to make the current welfare system work)? Would you support it then? Or would you rather pay the same amount of money – or even slightly more money – to ensure that the people receiving a portion of your paycheck were actually people who were down on their luck and not just lazy bums?
I’m not saying either of those hypothetical scenarios is necessarily likely, but I do think they’re within the realm of possibility, and at any rate, I’m curious if they would affect your position or not.
I’m going to fight the hypothetical here.
The kind of UBI that Scott supports cannot be implemented without seriously disrupting the lives of working Americans.
Congress will never agree to remove Social Security, Medicare, and Medicaid. And even if it did, that still wouldn’t cover the costs for year one of the UBI.
A land value tax wouldn’t be able to raise enough money to pay for UBI’s first year either. Neither would a tax levied only on the highest earners, and such a tax would severely curtail future growth by discouraging investment. Printing money to pay for UBI’s first year would, obviously, lead to inflation and possibly hyper-inflation.
And if the government somehow managed to pay one year of UBI without disrupting everyone else’s lives, the second year they would need to squeeze the same amount of money out of a smaller, weaker economy. Every worker who quits in favor of UBI still needs to be paid for, but with that many fewer people paying in.
By the third year, the pie would be even smaller. And so on and so on.
Again, you’re assuming that people would start dropping out of the workforce in droves once UBI was implemented, leading to a cascade of economic turmoil, but I don’t think that’s what would happen. Most people would continue to work, partially because they seek purpose in their lives and partially because they want the social status that comes with being employed, but mostly because they want money to buy things and live comfortably, just like they do now.
Even a basic income as high as $10k/year – the most common amount I’ve seen UBI supporters call for – wouldn’t be enough for someone to live any better than the average burger flipper at best. Most people living off UBI would seek employment, for the same reason that most people living off $10k/year today seek higher-paying jobs: they want to have more financial security and enjoy a higher quality of life than $10k/year can buy them. If the basic income was closer to my proposal of $3k-5k/year, then I’m absolutely certain that most people would still choose to work.
Given the choice between working and living a fairly comfortable life, or doing nothing and living in poverty, most people will choose the former.
Globally, only about one order of magnitude, at least according to McCloskey. For the developed world a bit more than one order of magnitude but nowhere close to two.
Trust fund babies are absolutely paying for their luxuries with your labor.
They aren’t doing it without any labor being expended, and it’s not on their own labor, and it’s not easily traced. The most plausible explanation is that our particular economic system randomly creates free riders and distributes their cost more or less evenly among people in the workforce.
Unless you believe that monoplies add value to the system equal to the money extracted by the monopolists.
@swami
The proposed system takes money off you and gives it back to you. Thats what the U stands for.
David,
Yeah, if median income globally was around $1000 per year, and US comes in at $58kper year, we are at 58X the long term global median.
Of course this ignores we live more than twice as long, work substantially fewer hours with more leisure, less housework, more freedom, more equality of rights, unimaginably more choice and options, higher quality, safer goods (which inflation underestimates) ability to travel the world, communicate instantaneously with people globally, more knowledge, ten X rates of literacy, and so on. These gains are outside traditional economic measures.
All things considered, per capita GDP is up “only” 58 times, but standards of living increases are better captured as a more nebulous “several orders of magnitude”. I could have been clearer.
Saying this, I am pretty sure you agree with my characterization of how much better life is now than historic norms. What we have now isn’t utopia, but it is extremely special and precious.
Ancient Geek,
Insurance works that way. The system proposed here is to tax the working and give it to everyone. Since less than half of people work, the cost would be taking two dollars for every productive person for every dollar returned. If I took two dollars from you and gave you back one would you consider that generous?
@deciusbrutus
Exactly true. Thank you.
So UBI would cost trillions but would reduce the people in the US who starve to death. Given the death starvation numbers are approximately zero I don’t see that as much better than buying magic beans.
I assume you’re mostly just trolling here, but…
Not only is this elephant not being ignored, Scott devotes a large part of his post to it. The college students who seem to party a lot and do a lot of drugs, the people who are “finding themselves”, etc. So yes, Scott is very clearly saying he’s ok with doing this.
As for your hangups about feminism… sigh.
Without going too far off-topic, this rhetoric is exactly the kind of authoritarian drivel that a UBI would counteract. Feminism is about equal rights for women, so I find it quite perverse that one could view giving women (and every person, incidentally) a real choice on how to live their lives as a limitation of their rights, of all things.
Feminism has a lot of different flavors, but I don’t think any of them present “homemaking” as an ideal option for little girls to aspire to, and should one suggest it I would expect a vociferous response from self-described feminists.
As a feminist, I am happy that UBI would allow women AND MEN who want to stay home with their children to do so.
That’s not the same thing. You’re talking about freedom after choices are made and I’m talking about guiding into choices. We have all sorts of programs to teach girls to code, to get more women in STEM and this is uncontroversial. But if I were to get on TV and say that we need to make sure to keep home economics in high schools and make sure girls have basic instructions in cooking, sewing, and child rearing because motherhood and family life are, for many women, surer paths to happiness and life satisfaction than a career, what do you think the response would be?
I think it’s much easier to give boys career advice: get a job that pays well so you can support a family, and if you’re lucky maybe you can find something that you enjoy (or at least don’t hate too much) and find some meaning in. But keep your eye on the prize. The job should be a means to the end, which is wife and family. And of course, if you want to be a stay at home dad and your wife has a good career, that’s great too. I don’t think that would be particularly controversial.
But giving similar advice to girls is a minefield. You better phrase everything exactly right or else here comes the storm. And really, phrasing everything right and including a million caveats won’t save you anyway. See James Damore.
I don’t think there would be any feminist objection to a program to teach boys cooking, sewing, and child rearing in order to encourage them to fatherhood and family life. Nor do I think there would be much objection to a gender neutral class in home economics. In fact, Montessori schools teach children of all genders practical life skills, and I have never seen anyone object to the anti-feminist nature of teaching boys and girls to prepare snack, arrange flowers, and sweep the floor. Over the same time period that home economics stopped being a thing, so did shop class, which makes me think the loss of both is about a general shift towards teaching academics at school.
If your point is that feminists have a regrettable tendency to focus on women rather than men, I agree! I believe feminists absolutely should prioritize destigmatizing stay-at-home fatherhood and teaching men to maintain a house and take care of children, as well as gender-integrating traditionally female professions such as home health aide and daycare worker.
That all sounds great Ozy. I’m right on your page.
Then you have not engaged charitably with modern feminism. Cursory googling with obvious search terms led me to instantly find numerous examples of feminists saying that homemaking is a perfectly good lifestyle. It is true that there are also feminists who appear to disagree with this.
Take most of this with a grain of salt, as I have probably reached the “knows enough to think they know a lot but not to realize how much they don’t know” stage of my philosophy education.
Recently in my philosophy class we watched the movie “Mona Lisa Smile”. In this movie, a professor from California goes to teach at the very traditional all-female school Wellesly. One of the major plot points in the movie is when a female student who was planning on going to law school instead chose to be someone who did not work, so she can “get dinner on the table” by the time her husband comes home. The professor begs her not to abandon what she thinks is her best future. She brings brochures for law schools nearby, tries to convince her that she can do both, she can go to law school and be a good wife, she shouldn’t abandon her dream. The student still made the choice of not going to law school.
Her choice to not go to school was authentic to herself. It was her choice to do so, not anyone else’s. The reactions in our class to this moment were mixed. I felt ashamed for not thinking it was a valid choice to stay at home, and for forcing my view of femininity on her. Some people felt angry or sad that she made the choice she did, and if only she could see it from our point of view of course she would have gone. They thought her choice was artificially limited by her upbringing.
This was at the point in the course where we were reading Althusser’s Ideology and Ideological State Apparatuses, focusing on the “Interpellated self”. Here are the most relevant parts (although it is a good read overall):
We were also reading about mediated desire:
What this is all saying is that the individual self is a product of ideology, and cannot escape it, despite appearing to be “authentic”. Desires are manufactured. Is it her choice to stay at home? Yes. Has she existed inside an ideological space that created a her that would choose that? Also yes.
If we create a space where little girls are told they should grow up to be good homemakers, it won’t be surprising if a lot of them choose to do so, authentically, and are happy for it. I don’t think that is an inherently bad thing. If we create a space where little girls are told it is a perfectly valid choice to grow up and be homemakers, but not the only choice, a good chunk of them will still do it, and I think that’s even better. The freedom to choose, in my opinion, is what is important, not the choice made. Societal pressures to stay at home or to go to work make the difficulty of the choice something more deeply interpellated into you. If the barriers to this choice were lowered for men (i.e. it wouldn’t be as stigmatizing to be a stay-at-home dad), then I would see that as a positive as well.
I don’t see homemaking as something to aspire to, but if someone aspires to that, and chooses because they are free to choose, not because of how they’ll be seen or how other people do things, then I support that. I think UBI as a whole would help make people freer to choose.
Women have equal rights except they aren’t subject to the draft. If feminism is about equal rights they would have closed shop years ago. But that’s not what it’s about.
What country do you live in, that there is still a draft for anyone to be subject to?
Perhaps the United States, where every citizen male needs to register somewhere around his eighteenth birthday.
That’s not a draft, it’s not ever going to be a draft, and everyone who is paying attention knows that. It was a stupid bit of political posturing from the start, and a minor annoyance for 18-year-old males. Claiming it as a slam-dunk counterargument to feminism is silly and anti-persuasive, so don’t do that.
I don’t know about @shenanigans24 , but I’m not claiming the US Selective Service registration as a slam-dunk counterargument to anything. It’s stupid posturing, but it is unfair to the small degree that it exists as an obligation.
However, male-only conscription does exist in many countries, including notably Taiwan, South Korea, and Switzerland.
Note that this quote comes from a conversation between Simone de Beauvoir and Betty Friedan in which Betty Friedan, the founder of the National Organization for Women, disagrees strongly.
Computer games and pot are luxury items, so you might not be able to afford them on your basic income. Fortunately, under UBI, you might be able to work just enough hours to feed your games-and-pot habit, while still retaining the UBI…
Video games, as actually practiced by the vast majority of the population (not the noisy “I like to shoot things” folks that try to define most video games as not really video games), are incredibly inexpensive. Like, free-but-ad-supported after purchase of a $200-700 phone, which will last for 2-5 years, depending on your preferences.
Or if you want to really go crazy, you can spend $40-50/year on ad-free iPad games like I do.
Any UBI which see $10-20/month in modern video game equipment (i.e. phones) as luxuries seems like it’s going to be a tad on the stingy side.
Games can be very inexpensive, especially if you’re watching for sales on electronic delivery services like Steam. I’ve bought high-quality games that retailed for $50 a few years ago for under $3 today. And then consider the dollars per hour factor. Many games provide 20, 40, 100 hours or more of entertainment. It depends on how much you like the game, but I have games I paid $20 for and played for over a hundred hours. Unless your chosen form of entertainment is literally free, video games are probably the most economical form of entertainment there is.
Thank you for being honest about this. The elephant in the living room here is indeed that for all the arguments Sarris makes in favour of basic jobs, the real deep generator of disagreement that makes people favor basic jobs over basic income in the first place is a moral belief that people should only receive what they have earned, which I’m going to call the Protestant work ethic even though I’m not one hundred percent sure that’s correct.
Personally, my counter argument is that I’m a utilitarian. I believe the principle that people should only receive what they have earned was designed for a society in which scarcity was a huge problem, there were almost never enough resources to go around, and freeloaders were a genuine threat to everyone else in the society having enough to eat. The Protestant work ethic makes some sense in this context.
It does not make sense in the context of a world where there is a serious social crisis revolving around what to do with all these people whose help society doesn’t need anymore. At some point, unemployment went from being something we should be worried about because it meant the unemployed weren’t pulling their weight to something we should be worried about because the unemployed would, through no fault of their own, starve to death.
We now live in a world where the idea of using automation to create more prosperity than we know what to do with is seen as something to be feared, because it would mean preventing millions of people from receiving prosperity. I submit that this is pathological. The Protestant work ethic served a purpose, but now it’s doing more harm than good. If the world no longer needs you to do more than play video games and smoke pot, then by all means, play video games and smoke pot. I’m not going to begrudge you for it.
>And by lowering the demand for jobs, basic income provides the seed of a solution to the housing problem. The reason rent costs so much in the Bay Area is because everyone wants to live in the Bay Area because it has so many great jobs. You can buy a house in the country (or in an unpopular city) for cheap; people don’t because the jobs aren’t as good, or the good jobs take longer to find. Freed from the need to live right in city center (or right next to the subway stop leading to city center), people can spread out again. If rent is $2000 in San Francisco and $500 in Walnut Creek, they can live in Walnut Creek (and still go to San Francisco whenever they want – cities are very accessible from suburbs, for every purpose except commuting during rush hour five days a week).
Moving to the country is probably the best solution for many people… you can just move to Wyoming, Montana, and other places where no one lives and land is dirt cheap, or move in to ghost towns where half the houses are abandoned because industry has left, and selling for a song.
I think one of the big advantages of UBI would be people moving away from cities and suburbs where things are expensive, and back into rural areas where cost of living is lower. Not only will this decrease urban crowding and increase quality of life, it could help to mend the growing urban/rural political and cultural divide, which feels like an important explanatory variable in the current levels of polarization and partisanship.
To me this seems like one of the biggest drawbacks. As the US political economy is currently structured, rural living is being subsidized. If people no longer had the incentive to move to the cities they would end up in sprawling suburbs and exurbs that require additional infrastructure to service (urban living tends to be environmentally friendlier as well).
Also, with a nationally set UBI, people who can’t find jobs would be essentially forced to move to these low cost of living areas, that are low cost of living specifically because the local job prospects are so bad. Given the network effects both of finding a new job and being productive in a job you’ve found, this seems like a really bad outcome.
Somebody will need to provide services to those urban exiles, which will either reboot the local economies, or at least give the exiles something to do with their free time.
A lot of poor people are living in cities with high housing costs because that’s where their families and friends are. They don’t want to move to Montana.
Is friendship and family a fundamental human right that must be provided or subsidized by the government?
Interesting concept, but I think I’ll go with: if these are true friends either you’ll find and work a job if that’s what it takes to be with them, or, if these are true friends they’ll find a couch for you, or, meh not my problem.
A lot of them, sure, but if two-thirds of them move out of town then housing costs would go down for everyone who stays. The lower housing costs across the board might even counteract the higher labor costs.
Ctrl+F “immigr”
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Half of the world earns less than $2/day. How many foreign bureaucracies would not help prospective emigrants fill out their “this person is officially persecuted, please grant them asylum + UBI eligibility” paperwork?
Even if you ended refugee asylum (which would suck) and limited Basic Income eligibility to citizens, there would still be an irresistible incentive to illegally immigrate and have children born in the United States. Even in the 99th percentile worst case (Ma dies crossing the border, Pa gets deported, the child survives but succumbs to decadent American culture & votes Libertarian), the outcome is still 1000x better than living on $2/day in the Old Country and having to worry about cholera.
The problem with utopianism isn’t hubris, it’s the unintended consequences.
Why would utopia be limited by national borders?
Yes, this is a good point.
Any attempt to improve the lives of Americans makes the U.S. a more attractive place to live, and thus encourages immigration. Your objection goes far beyond just UBI, but to social security, clean air, non-dirt floors, ect.
If your concern is that the system would become unsustainable, then you can always scale back the UBI to incentivize more production. However, with advances in technology, the scenario of a future under-production crisis is seems increasingly unrealistic.
The objection doesn’t apply to “people who like clean air”. The objection applies to people who like clean air and few limits on immigration. I believe that Scott wants few limits on immigration.
It’s not a universal objection, it’s just “this idea doesn’t mesh well with the other things you support”.
Anything that improves the lives of Americans who support themselves attracts immigrants who plan to support themselves, which is a plus, not a minus. Anything that improves the lives of Americans who live at the expense of other Americans attracts immigrants who plan to do the same, which is a minus not a plus.
Transfer payments (including the UBI) are just one small part of our economic institutions which determine the distribution of resources. The other, much larger, component is property law. So who exactly is “supporting themselves” in our current system? Certainly not the wealthy. Their reliance on others via property law is so standard, we essentially take it as “given”.
As Scott pointed out, “living at the expense of others” (assuming you are referring to those who are receiving transfer payments) includes people who are disabled, in school, caretakers, and the elderly. And its true: subsidizing these groups decreases productivity (with the exception of children who will be productive in the future). However, within our own country, we have decided that subsidizing these groups is “good”, despite having a counter-productive relation to what is generally considered to be “economic productivity”. I don’t see why including immigrants, as opposed to exclusively citizens, in these transfer payments should change our perception of the payments being a plus.
You really need to explain this. What the heck do you mean by “property law?” It seems to me that most wealthy people are supporting themselves by creating a lot of value (property), which they then exchange with other people for stuff they want. It sounds like a pretty good system to me.
You obviously have some non-standard meaning of “property law.” That’s fine; it’s always good to see different approaches. I suspect that your explanation would require an extensive explanation, so should be a top level comment. Please do this. Unless you have a link somewhere that explains this.
@Mark V Anderson
Based on pattern matching Guy in TN’s positions to socialist concepts, he is implying that capitalists use property laws to exploit workers and transfer resources from workers to themselves.
@Mark V Anderson
In our system, we have many factors that determine the distribution of resources. These include taxation, transfers, and property law. (And just to be clear, I’m using “property law” in the normal sense, as in “there are laws that allow for and govern the concept of legal ownership”).
These institutions, which we created to distribute resources, do not necessarily distribute them based on who was involved in wealth creation. The belief otherwise is common mistake for people to make, and it permeates much of the discourse. While this non-relation is obvious in institutions such as taxation, inheritance, and welfare, it is less obvious in the case of property law.
If it helps, consider an example of ownership from a historical time: Who is more self-sufficient, a feudal lord, or a peasant farmer? It seems that the Lord would have no idea how to plant crops or build houses, and would likely starve without the peasant. Yes, he is wealthy, and he is the property owner, but this ownership has no relation to his ability to create wealth.
This is the leap David Friedman and yourself are making. Why would you assume that the wealthy are creating wealth themselves, instead of extracting it through rents?
But finally, the real kicker here, is the enforcement of property law. Legal ownership, just like the institutions of taxation and welfare, is not enforced individually, but by the state. So the wealthier you are, the more you utilize the legal mechanisms that enforce ownership. In terms of “who’s position would collapse the farthest if the state stopped enforcing property law” (or alternatively, “who would be most self-sufficient without property law”), I would imagine Jeff Bezos would end up being less productive than a poor immigrant farmer.
I cannot answer why most commenters choose to put property law a different bucket than the rest of our economic institutions, treating it as if it has a uniquely important status. Property law tells you just as much information regarding who is involved in wealth creation as taxation and transfers. Which is to say, it tells you nothing.
That depends a lot on the particular context of feudalism. In some, the feudal lord is being productive by keeping bandits and other feudal lords from killing the peasant and stealing his stuff.
On the more general argument, defense of my view, that income in a market society, not including the effects of welfare, taxation, subsidies, …, roughly corresponds to value created, requires about a semester of price theory. I can point you at a webbed book if you like, but my guess is that wouldn’t interest you.
I include in “corresponds to value created” the case where the value was created by A who chose to give the income to B.
Do you stand by income received through IP law as indicative of value created? Or rent-seeking in general? These sources of income both have their basis in property law.
This seems like it would include inheritance? It’s hard to imagine how that corresponds to value created, for the recipient.
Maybe after a semester of price theory, I would be able to understand how newborn babies of wealthy families have already created vastly more wealth than the babies of poor families.
Correct.
Which is why I pointed it out. It corresponds to value created by the donor.
IP law rewards value creation. It isn’t clear that it gets it right, but then measuring the amount of value created by a new invention is hard.
Rent seeking is not value creation, but it mostly occurs either in the political marketplace or in violations of property law. You may remember the title of the article in which Gordon Tullock first introduced the idea.
I’m trying to figure out how you have determined which parts of our economic institutions correspond to rewarding wealth creation, and which ones don’t. So for you, property law and IP are “yes”, but transfer payments and taxation are “no”. But why? Surely its not the intent of the law that matters to you? So is it just a personal judgement?
For example, the Earned Income Tax Credit is advertised as a reward for working. Its given to people who appear to work pretty hard, and create a lot of wealth, by my judgement. Any reason why this get placed in the “no” bucket?
And inheritance, still baffling. When you said: “income in a market society […] roughly corresponds to value created”, I assumed you meant that it corresponds to the value created by the recipient of the income. This would logically follow, at least. I didn’t think you meant that the income corresponds to value created by…someone, somewhere. Because if you admit that a person can be the owner of income which has no relation to the amount of wealth they created, that undercuts the whole “rich=wealth creators who are able to support themselves” argument you initially made.
David,
“On the more general argument, defense of my view, that income in a market society, not including the effects of welfare, taxation, subsidies, …, roughly corresponds to value created, requires about a semester of price theory. I can point you at a webbed book if you like…”
I agree completely with your explanation. In mutually voluntary honest interactions with freely competing alternatives, the interactions will tend to create expected value on both sides, otherwise why engage in the interaction.
However, I would be interested in more data on why the consumer surplus and the producer surplus are roughly similar. Is there an argument for this? Or are they just both expected to be positive with no proof that the two correlate?
Just asking to see if you could help me (us) be better informed.
Thanks
I’d imagine that Jeff Bezos has a variety of technological, financial, administrative, interpersonal, and networking skills that would be in much higher demand than farming skills in this hypothetical situation, as well as connections to other highly-skilled people. He wouldn’t be one of the wealthiest people in the world anymore, but he’d probably still be significantly more productive and have a significantly higher social status than the average subsistence farmer.
In a post-apocalyptic scenario where all the infrastructure required to maintain an industrial society was destroyed, then the subsistence farmer’s skill set would be more useful, no argument there. And I’d imagine that in an actual anarcho-communist revolution like you’re describing, billionaires like Bezos would be killed or imprisoned by the revolutionaries out of spite as soon as they took power, or at the very least, prevented from ever holding any kind of position of influence again just on principle. But assuming that the only immediate change is that the government stops enforcing private property laws, then Bezos would still have some serious advantages over much of the population.
The EITC is actually a quasi-libertarian idea, as it was inspired by Milton Friedman’s idea for a Negative Income Tax (which is functionally the right-libertarian equivalent of UBI, and my preferred choice for implementing something like a basic income). I don’t know David Friedman’s position on it, but I’ve known plenty of fiscal conservatives and right-libertarians who support expanding it.
(As a low-income worker myself, I greatly benefit from the EITC, which usually nets me an additional ~$2,000/year. So I have a personal incentive to support it over other forms of government assistance, although I held the same position long before that became the case.)
You seem to see it as “if you do something useful and get some reward, then your income is a reward for doing useful stuff.”
That’s wrong–amounts matter. If you produce one dollar’s worth of goods and are paid ten dollars for it, one dollar of your income is a reward for producing stuff, nine dollars isn’t.
Hence the Earned Income Tax Credit doesn’t qualify. You are already getting a reward that measures the value of your efforts in your wages–the EITC is an addition to that.
I did say that an explanation required a semester or two of price theory. The short version is:
P=MC=MV.
I would be interested in resources explaining these concepts in greater detail.
If you produce one dollars worth of stuff and sell it for ten dollars, then it was worth 10 dollars.
@LadyJane
I was describing a scenario where we lacked the socially-supporting economic institutions we have now, and people were forced to become totally self-sufficient (i.e., everyone “supported themselves”). It’s pretty nightmarish, yes. Useful only as a thought experiment, not recommended to try at home.
This is why we created these economic institutions (including taxation, transfers, and property law), in order to keep such an collapse from happening. Commentator’s emphasis on seeking to create a society of “self-sufficient people” is misguided.
You have only to ask.
Another alternative, but not free to read online.
I’m going to second 1soru1’s thought. If there is an independent value of the goods (their “actual worth”) that is separate from their market price, that raises all sorts of questions:
Primarily, you have created a division between someone’s income and the actual wealth they have created. In your scenario, it was a 10:1 ratio. How high could this ratio go? (And could the ratio be 1:10?) In your scenario, millionaires could be producing almost no wealth, yet receiving huge market compensation. This division undercuts the “rich=wealth creators” argument, since we don’t know what their [wealth creation/monetary compensation] ratios are.
This makes me wonder why, if you are already allowing for excess compensation via the market, why are you not allowing for excess compensation via government transfers?
Secondly, there’s a time-related problem here. Your argument against the government transfers, is that people have already been compensated for their efforts via market income, thus additional transfers are non-indicative of wealth creation. Well, what if the government beat the market to the punch, and compensated someone first? For example, they could pre-compensate someone for wealth creation they are projected to do over a year (essentially paying in advance). Would you say that this renders that person’s market incomes for the coming year, as no longer qualifying as a reward for wealth creation?
What defines it as “one dollars worth” of stuff?
I was considering the case where you produce one dollars worth of stuff, sell it for one dollar, and the government then gives you nine dollars to reward you for being productive.
@Guy:
One of the things that’s neat about market institutions and the economics used to understand them is that it turns out you can get the equivalent of everyone producing for himself and consuming what he produces in an interdependent system.
The value of the goods is the most that the person who gets them would be willing to pay for them. For the marginal unit consumed, that is equal to the price.
You have misread my comment. When you produce one dollars worth of goods and are paid ten dollars for doing so, one dollar was paid to you for the goods, nine dollars was paid by the government to reward you for being productive. That was the Earned Income Tax Credit, which is what I was discussing.
I should have made that clearer.
The price is equal to how much someone can and is willing to pay, not how much they are merely willing to pay. If there is a penniless man dying of thirst, and I dig a well to find and give him water, would you say that I have created no wealth, and thus the water is of no value? Perhaps it would be so in a strictly academic sense, but this seems far removed from how most people understand these words.
So there are two routes here: If value (in the colloquial sense) exists independent of market price (as with the dying man in the desert), then the market is not accurately compensating for value creation.
Alternatively, if value is defined as what someone receives through market compensation, then it follows that all non-market activity is defined as non-wealth creating. This includes the interstate highway system, hydroelectric dam construction, and digging wells for thirsty people. The argument starts to look like a bit of a tautology here.
It’s true that I don’t have any satisfactory alternative of measuring wealth creation. My position, to let the cat out of the bag, is that since economic value is a normative claim that differs from person to person, it can’t be objectively measured in any interpersonal sense, thus rendering the idea of the market determining the “true value” as an impossibility. So when we say someone “created wealth”, that concept can only be used in the most broad sense of shared-human values that ~99% of us agree upon, like growing food and building shelter. Beyond that, you get complex conflicting goals, where one person’s utility may be another person’s anti-utility. The final market price does not address any of this.
So really, you can only talk about wealth-creation in reference to a specific goal. That the highest bidder wins in a market system, doesn’t make his normative economic determination of value any more objectively real. Because even if you reward someone for creating something you value, that level of compensation would be different from how I value that wealth. From my perspective, I might even think that they are destroying wealth! None of this is encompassed in the market value.
In addition, my position is that even if markets could compensate based on what >50% of the public agrees qualifies as wealth creation, we shouldn’t structure our economic system to have the market determine the distribution of resources. This is because there are a lot of people who don’t do much wealth creation. The old, the young, the disabled, the caretakers. If market institutions, based on rewards for wealth creation, are how wealth would be distributed, then these people would get nothing.
@David Friedman: Much appreciated.
I see no sense in saying I am willing to do something I can’t do.
The value of the water, defined as what he is willing to pay for it, is zero (aside from the value to you of knowing you have done a good act–which you have demonstrated by paying for it, although in labor not money). Its utility may be very large. “Value” and “utility” are different things. My claim was about value.
To see why value is relevant, take the question back to whether rich people are getting more than their share of stuff in a market system. Suppose you have talents that let you produce something that other people very much want. You exchange what you produce for what they produce. You get lots of stuff–much more than they do. But you have made nobody worse off in the process. So it makes sense to say that you have produced the value you have consumed, even though the utility to you of things you consume may well be lower than the utility of those things to the people who traded them to you.
In a market society, ignoring complications such as gambling and mistakes, the value you consume is about equal to the value you produce (again including value someone else produces and chooses to give you). That doesn’t mean that the outcome results in maximum utility, although, at least in the case of perfect competition, it does result in maximum value.
If you are curious about the value/utility distinction, I discuss it some in one chapter of the book I pointed Jane at.
So it’s a good thing I didn’t define it that way.
Consider the simple case of household production. I cook dinner for myself. There is some amount I would be willing to pay for that dinner–that’s its value (to me). If the cost to me of the labor to make it is more than that, I don’t make it.
The fact that you pay ten dollars for something is evidence that it is worth at least ten dollars to you. It could be more–perhaps you are lucky and got something you are willing to pay fifteen dollars for at a price of ten dollars. The value is fifteen. The reason the equation I offered used marginal value and marginal cost is that, if you can freely buy as much of a continuous good as you want at a price P, you will keep increasing the amount you buy until the last unit is worth just P to you, hence MV=P.
There are lots of simplifications in the argument, such as assuming no mistakes and, in that case, a continuous good, which is why I use terms such as “about equal” and “roughly.” But those don’t involve rich people getting more than they produce and poor people less, or capitalists more and workers less, which I think was the sort of underlying question that got us here.
I apologize for the confusion of the terms. As I’m sure you can tell, economics is not my field of expertise.
The underlying question, from my perspective, was never whether the rich are receiving their income through creating market value or not. It is both true and trivial that wealthy people are wealthy because they get paid more. It was a question of creating social utility.
I took the time to read the relevant section in your book. I’ll quote the part that addresses this issue:
Yes, market value is a lot easier to measure than utiles. But market value is not utiles. As you said before, the value of water to a penniless dying man is zero. But its not zero utiles.
I don’t see how you solve the problem of maximizing utility by maximizing something else instead. I think we both agree that economic value is not a synonym of utility. So why should we care about it?
You just did. Textbook economics says that there is no coherent concept of inherent value; the closet you can come to is counterfactual value, i.e the price that a thing would sell for if market conditions and societal institutions were different from what they are. And obviously there are as many counterfactual values are there are possible social institutions.
For example, a rare card from an unsuccessful collectible card game has virtually no market value. But could be worth an arbitrary in a counterfactual world where that game had really taken off and was still widely played.
I know you know this stuff, and have written books on it; that is why it is so surprising to see you get it so fundamentally wrong. It almost seems like you are trying to sneak in some normative preferences for a certain set of societal institutions as if they were rules of economics…
Two different answers:
1. Value is a proxy for utility. It isn’t a perfect proxy, but it is observable and economics gives us some idea of how to maximize it, so maximizing it may come closer to maximizing utility than any alternative strategy. That was basically the argument offered by Marshall, a utilitarian who largely invented modern economics.
2. I wasn’t talking (in the thread) about how to maximize utility but about whether market institutions allocated rewards roughly in proportion to wealth creation. I tried to suggest why that was interesting in my previous comment but apparently not very successfully, so let me try a different approach
Imagine a society of entirely autarchic households–no trade, no interaction. They have created their homesteads in a forest which is free to all–unimproved land is a free good. Each family consumes only what it produces. Some families are more skilled at agriculture or luckier than others and so produce more. Some families are more needy–perhaps a member is sick or has a birth defect–and so would benefit more by an additional pound of apples or wheat than others.
This society is not maximizing utility. Total utility would be higher if the richer households donated some of their output to the poorer, the less needy some to the more needy. But it is a society where reward is equal to wealth creation.
Looking back up the thread, the statement of yours that ultimately provoked my response was:
In the imaginary society I have described, resources are distributed entirely based on who was involve in wealth creation. In the market part of our society, resources are distributed mostly based on who created them, in the more complicated sense where if I give you something in exchange for something you give me, and you agree because you are not losing by the deal, that counts as my getting the thing I created transformed into the thing you gave in exchange for it. So the market is the equivalent of my society of homesteaders in the context of an interdependent society.
There are various reasons why this is only an approximate equivalence, such as the fact that land is not a free good, and one could make arguments along Georgist lines about that.
But resources allocated in proportion to wealth creation really is the right first approximation for the outcome of a market system–and not for the outcome of political redistribution, whether or not that increases total utility.
Hope that helps make my point clearer.
> In the imaginary society I have described, resources are distributed entirely based on who was involve in wealth creation.
Do you have figures for the relative wealth of:
1. the people who invented, developed and worked on the concept of oil drilling
2, the people who owned the land and companies involved in oil drilling
Because if those figures work out the way I suspect they would, that makes the case that that imaginary world is a reasonable approximation of the real world hard to support
@David Friedman
Thanks again for the in-depth response.
While I should probably go about reading the source material before commenting on this much further, my initial thoughts are that is seems strange to say market value is the best proxy for utility. If I adopted this mindset, and went about exclusively trying to maximize economic value, I would pass up every penniless thirsty man, since giving him a bottle of water would create no economic value. But I wouldn’t do that, because saving dying people certainly appears to increase their utility. I think increases in utility are not as difficult to obverse as you suggest.
The fact that the market assigns no value to fulfilling the utility deficiencies of extremely poor people is more than just an imperfection in this approach. It is a fatal flaw that undercuts any usefulness.
———————
Regarding your hypothetical society:
I suppose a society that lacked any economic institutions (but maintained institutions against inflicting bodily violence) would probably end up with people having whatever wealth they created. So long as the category of “created” includes the act of grabbing it from nature, or grabbing from whatever is lying around.
When I point out that our distribution of resources is determined by political institutions, this isn’t meant to disparage them. I much prefer the world we have now, containing property law and such, to a counter-factual one without any of these institutions. From my view, that in our society people can receive wealth they didn’t create, is a feature, not a bug.
Not market value. Willingness to pay. The relation to market value comes much further into the argument, and only applies given certain simplifying assumptions such as perfect competition.
You are correct that there are situations where one can do better, but starving men in the desert are pretty rare and it isn’t clear how one sets up institutions for providing them water better than charity within a market order. Marshall’s basic argument was that most issues provided benefits and costs to a large and diverse group of people, so differences in the marginal utility of income, which are what drive your argument, tend to average out.
That doesn’t eliminate a utilitarian argument for income redistribution from rich to poor, since our guess is that the former have a lower marginal utility of income than the latter, although the argument for that is not as clear as commonly believed. The utilitarian argument against that policy is ultimately public choice theory and rent seeking. We don’t get to specify outcomes, only institutions. Institutions for redistributing income are going to be gamed by people who want to maximize the benefit they get and minimize the cost they pay, and the same abilities that lead to a higher market income also lead to more success in gaming institutions.
And all the resources spent doing it are a dead weight loss.
Problem solves itself. Eventually the standard of living will be so low nobody will want to immigrate.
This already applies to all welfare.
Despite that, the world isn’t clamoring that hard to get hold of sweet sweet american food stamps.
it’s non-zero but I suspect you believe it to be a much stronger effect than it really is.
By “non-zero” you mean over 165 million? I guess your phrasing is technically correct.
I suspect the limiting factor is social ties and border controls, though, not food stamps being insufficiently sweet. Average SNAP benefits for a 1 person household are around $1600 per year per person, which is more than the PPP-adjusted income of a majority of the planet.
You’re lumping in all people who want to migrate for any reason.
If the USA had the average GDP per capita of nigeria but identical SNAP availible I’m betting few of those 165 million would still name america as a desirable desination because, surprise surprise, most people are trying to move to get better jobs. Not to join the lowest rung on the social/economic ladder. Though I’m sure there’s some. hence what I meant by non-zero.
roystgnr supported his claims with quantitative data.
Would you be interested in doing the same?
Not really. It didn’t support his claim . Little more than if I linked to statistics for the total world population and implied all of them desperately want to leave their homes for American SNAP money.
What’s your point? People come here, have kids, those kids become members of the US society… I fail to see the problem.
Well if you don’t think people are fungible, those looking to milk off of public funds forever might not be the type of immigrants you are looking to attract
Who is trying to milk off of public funds? The parents don’t get it because they’re not citizens. The kids are not the ones deciding to come. If anything, the parents are showing themselves willing to take enormous risks for benefits that will accrue to their children only. That sounds to me like the kind of people I want more of.
The post you responded to is positing that the immigrants would be entitled to the UBI. Indeed it seems likely that they would be
Then just make citizens aged (say) 18 or older eligible for UBI. (EDIT: Or add limitations to jus soli, but IIUC that’s pretty much impossible in the US short of a revolution or something.)
I think this argument proves too much–anything you do that makes US society very nice will encourage a lot of immigrants. Anything you do that provides a safety-net/welfare program to help the poor will, similarly, encourage very poor immigrants who hope to benefit from it.
The argument isn’t that immigrants are inherently bad, so that anything that causes more immigration is bad.
The argument is that there are more people in the world than we can actually support, so that setting up an apparatus where anyone can pump value out of us will leave us bled dry when everyone does.
The argument does apply to other safety nets and welfare programs. It doesn’t apply to NASA or to infrastructure improvements (at least not directly).
Right, but we’re going to have some kind of safety net programs in almost any world I can imagine from here. That means whatever safety net programs we have will create an incentive for immigrants to come here in hopes of taking advantage of it. Also, to the extent the safety net program convinces more citizens/permanent residents to stop working and live off the dole, or to demand higher wages to get out of a warm bed and come to work every morning when the dole will keep them fed either way, it will create increased demand for immigrant labor willing to work for a lot less money because they won’t (at least initially) be eligible for welfare/UBI/whatever.
You’ve provided an argument against providing any safety nets to immigrants rather than supporting UBI for immigrants.
@Education Hero, yes, I agree. Still doesn’t mean we should make the problem worse.
There are a few separate issues here. One, is the enforcement of Legal Immigration, which is an issue separate from UBI eligibility. No matter what system is in place, this is still a potential issue, UBI or not. Regarding people legally immigrating and obtaining benefits, or more crucially, working for less due to lacking benefits, this will, I think, become less of a factor (though separately problematic) as low level jobs become automated, and there is always the factor of employers using the immigrant labor. I would be for a UBI for recent immigrants, but with stipulations. The details of which I fail to forsee at this point
That’s easily solved, though. Just require immigrants to work for some period of time before receiving UBI payments. Something longish but short enough to keep the incentive to move strong–say 5-10 years. Then you get to keep your low prices at McDonalds and other businesses that rely on cheap labor, while also increasing the tax base that can pay into UBI.
The genius of this proposal is it means illegal immigration is no longer a worry. Now, illegal immigration just means you have more people to contribute to your monthly Basic Income cheque. Heck, you might as well eliminate all immigration restrictions; open up the borders and let everyone in so you can take more in taxes. “You want to live here? Great, welcome to America! You can help pay our bills.”
The policy practically sells itself: “We’ll give a Basic Income to every American… And make the immigrants pay for it!”
I’m sure there will be no unintended consequences to this utopian scheme.
I mean… that is exactly how Qatar and the UAE currently work, and it seems to work out well for the Qataris and the Emiratis, doesn’t it?
It isn’t the immigrants paying for it there; it’s the oil. That’s also what pays for the Alaska Permanent Fund.
Very true, but its the immigrant labor freeing up Qataris et al from doing such work.
Ha! I actually did ctrl f immigration and found this. Exactly.
We can’t have either basic jobs OR basic income without completely shutting down immigration.
If Dems took that trade, I’d be on board.
How about simply setting a price tag of immigration? Want to come to the US, and enjoy everything including a guaranteed minimum income? Pay the required entrance fee, and step inside. The price should be high enough that benefits are not an unreasonably high dividend, say $100K to enter, and $10K/year of UBI. Or something like that.
I no longer try to discuss this with my GF, her reaction wasn’t, ahem, conductive to debate. But seriously, why would this not be a good idea? If you want to differentiate between “deserving” (refugees, perhaps) and “undeserving” immigrants, fine, take some of the money brought in by this scheme, give it to the UNHCR and leave it to them to buy entry tickets for the money if that is judged to be the best use of the money.
…or decide how many immigration permits to issue every year and then auction them off.
And if all of your citizens became citizens that way, rather than being told “this region of land is now a state, if you were living here you’re now _mine_”, then you’ve just invented private government, citizen-shareholders, and basically this place. Which sounds good to me.
There is a weirdness
Yes, yes there is.
New Zealand on 31 March 1952 had an unemployment rate of 2. Not 2%, two people.
There was social pressure to work and the government acted as the employer of last resort, often through the Ministry of Works, giving a basic jobs policy in effect.
You can argue about the economic and social impact of this – if you were an employer, would you want to give a job to the third-least employable man in NZ? Still, at the time, NZ had one of the highest living standards in the world
Obviously, that number relied on a combination of pretty specific factors (huge immigration but also huge loss of men in WWII, high wool prices due to the Korean War, women not being treated as part of the workforce so not receiving unemployment benefit but “deserted wives” could claim widow’s benefit instead). And then it all turned to crap at the end of the 1970s, but that’s true for most western welfare states.
The UBI argument assumes the conditions that made the 1950s so extraordinarily worker friendly will probably not return. If they do return, UBI will not make sense, and should be replaced with more traditional disability.
Just two people? That can’t be right. What about disabled people? What about about people who just quit their jobs and are looking for job openings?
I am fairly certain there were more than 200 toddlers in New Zealand in 1952. And more than 200 thoroughly senile geriatrics, and more than 200 prison inmates, among very many other categories. It seems most unlikely that New Zealand/1952 was 99+% efficient at finding jobs for these people.
In which case, all we can know from the statistic, is that New Zealand/1952 was very, very, very good at making sure the category “people who would be counted as unemployed if they didn’t have jobs”, matched the category “people who have jobs”. It being much easier for a bureaucrat to move a person from one category to another, than to find a useful job for someone who doesn’t have one and may only be pretending to want one, I have my suspicions as to how this remarkable figure was attained.
Yeah. I’ve heard too much bitching about unemployed Maori (something something plough vs hoe?) to believe that.
Unfortunately, you conflate a basic jobs guarantee with basic jobs.
What if instead of the system you propose the standard for a basic job was doing something that created value for society, so this would include:
Caregiving
Homemaking
Trying to become an artist
Writing a novel
Blogging
Retraining
Meeting people to decide on their basic job
So the job definition could be made very wide, but it would be difficult to administer – instead of saying – here is a job building a road, toy would need someone more like a careers advisor who took an inventory of your interests and then tried to guide you to an area where you could grow and maybe make a living.
So each person could submit a 1 page report on what they did each year to a panel of a random panel of say 100, if say 20 people supported what they were doing then they could continue for another year. This could be facilitated by holding all years reports (so they had to show growth form year to year) on an anonymised blockchain which was then voted on using a platform like Eventum Alpha.
The alternative, for those who did not want a job or were not considered capable would be a basic guaranteed income at half the level of the jobs guarantee.
My main problem with basic income is the economics, so this is just directional:
Lets say the US has 327m people, say 23% 18 and under (excluded).
That gives 77% of 327m for UBI or 252m.
Say we set UBI at $9,000 pa, that would be $2.3tn a year – difficult in the economic context.
Say 16% of people are over 65 (and get a pension set at UBI level).
Real unemployment rate is approx. 8% but lets say under these conditions approx. 25% of people want to take up
So jobs gurantee payments would be 25% of 61% of the population or approx. 50m people = $900bn + UBI pension = $456 So a total of approx. $1.4tn a year.
Harder, but easier than a UBI.
This is obviously really brief as I have to get back to work and there are obviously significant problems – but by redefining work you get rid of many of the criticisms of a basic jobs guarantee…
That sounds like pork barrel projects with extra steps. People with power get money, people without power don’t.
There are too many people doing this already. I used to think bad artists producing bad art was still a net positive because some people were doing what they enjoyed, but I now think it’s outweighed by the resulting Harm to society.
I agree, but in a future of technological unemployment we will need more entertainment, and not everyone likes the same thing – so the market for dross will expand with the market for high culture!
Also, some of them will be people who would never have got the chance otherwise and produce good stuff.
In the UK, we used to have a benefit called, variously, Unemployment Benefit, or Income Support, or Supplementary Benefit, or National Assistance (it got renamed every few years). It was always nicknamed “the dole”, whatever the official name might be.
It was a means-tested benefit paid to anyone (with less than X amount of savings, with an income of less than Y and working less than 16 hours a week), provided they signed a form every two weeks saying that they were “available for work”. If they were offered a job and declined it, they lost the benefit for a period of time (also, if you had a job and quit, then you couldn’t claim the dole for the first few months; if you were fired, you could claim from day one).
At some point in the late 1980s / early 1990s it was changed to require people to be “available for and actively seeking work” and the regulations relating to the “actively seeking” bit have become progressively more strict over time, to the point that you pretty much have to be doing a full-time job of applying for jobs to avoid being sanctioned. The current version, JSA, bears little resemblance to the “old dole”.
An awful lot of British rock and pop musicians learned to play their instruments and write music while claiming the dole until about the mid-1990s. Of course there were a lot of awful local bands that never took off, but there were also quite a few very successful bands. A good example towards the end of the era is Oasis, who were gigging while on the dole and eventually signed themselves off when they got a record contract (well, Noel was working as a roadie, but the rest of the band were on the dole).
Since being on the dole became a full time job of applying for work, gigging on the dole is no longer anything like as common; most new British rock and pop musicians are now middle-class kids who did the work of learning their instruments, learning performance skills, learning to work with a band and learning to write songs while they were students.
Were there lots of terrible bands too? Yes. But that’s true of any art; you have to have lots of terrible people trying in order to have the 1% or so who are any good.
I think you are not noticing that UBI increases taxes, then gives most of the money back
+1
UBI is an income redistribution scheme. It’s just a funny-looking one–the usual kind does something like
a. Collect $X+Y in taxes.
b. Spend $Y deciding who is eligible and getting them to jump through hoops.
c. Disburse $X in benefits.
UBI is basically trying to do this while skipping (b), partly to save the $Y, but much more to avoid the intrusiveness and Kafka-esque bureaucratic hassles that often go with (b). So instead, we:
a. Collect $X+Y+Z in taxes.
b. Spend $Y getting the checks to people. ($Y is much lower here, because you don’t need complicated eligibility tests.)
c. Hand $Z back to net-taxpayers as UBI checks.
d. Disburse the $X to poor people
The messy bit is that (c) is also doing some income-redistribution (people with high incomes pay a lot more extra in taxes than the UBI check, people with lower incomes do better or even break even). Also, (d) covers people who aren’t exactly poor but are barely making ends meet, who end up getting a benefit even if their taxes go up by a bit.
The $2.3tn a year for UBI that was calculated in this post is on par with the $2.4tn a year currently spent on social security/medicare/unemployment/SNAP/etc. The argument is often made that a UBI could replace most of those programs. Whether that is true or not is a completely different discussion, but it does show that something on the order of a $2.3tn redistribution program is definitely possible, it’s just a matter of priorities.
On a separate note, why would you exclude children from the UBI? We already subsidize them with things like tax deductions and credits, so replacing those with the UBI seems like a natural progression.
It also seems like a quite serious problem, since children are generally less expensive than adults. The amount would have to be much lower, at least.
I once figured out that UBI is 32 different things.
The argument is often made that a UBI could replace most of those programs. Whether that is true or not is a completely different discussion, but it does show that something on the order of a $2.3tn redistribution program is definitely possible, it’s just a matter of priorities.
No, it really really matters whether you are getting rid of those other programs.
There is a huge list of government programs I can come up with where the government can fund any of them but it definitely cannot fund all of them.
Getting another $2.5 Trillion would involve increasing taxes on the top 20% by 65 percentage points from where it is today.
I’m taking care of my second cousin. No, really, I am. I’m doing it by sitting on the computer while he’s crying on the other side of the room, or maybe on the other side of the country, but I don’t need to write that in my report. And because it’s anonymized, the jury will never know. Yay, Job Guarantee Money for me!
Alternatively, I’m writing the next great novel – but unfortunately, it’s fantasy, or maybe its premises favor $UnpopularSect, and by chance I draw a jury who’s hostile to that. Oops, no Job Guarantee Money for me!
There are three fatal flaws that I see to a federal universal jobs program:
One- there isn’t enough money for it. There isn’t enough for UBI, and universal jobs that provide the same income will cost more, because writing a check is less expansive than running a worksite.
Two- There isn’t enough work for the skill level for it. There’s only so much unskilled labor usable, and in the hardest hit areas, after the initial cleanup is done the biggest job available will be finding makework. Jobs currently being done cannot be used- sure, the post office uses a lot of labor, much of which can be trained fairly easily, but if you send the Universal Jobs people to do that work, now the UJ office needs to find jobs for the displaced postal employees. Likewise with sending people to do roadwork, mine coal, or do anything else that has enough value for private industry to have done it.
Three- the front-line supervisors available for such a program will not be of particularly high quality; the pipeline to generate good supervisors can’t put them out fast enough. There would be too many substantiated claims of sexual harassment, racial discrimination, disability discrimination, favoritism, unsafe working conditions, workplace injuries, and embezzlement to handle, much less the spurious claims of all of the above. Private industry gets around all of that by having ‘at-will’ feature in law and policy, by being selective about who they hire, and by less savory methods.
But the real reason that universal jobs is in the Overton window has nothing to do with effectiveness or plausibility. The real reason is that it appeals to the people who object to UBI on moral grounds.
This is simply false. Basic Income goes to everyone. A Basic Job goes to a much smaller number of people. Even if you assume lots of overhead, Basic Job is cheaper.
https://www.chrisstucchio.com/blog/2013/basic_income_vs_basic_job.html
India has a much lower skill level than the US, yet over here we find plenty of work for people to do. They produce value. Not a lot, but some.
Or they can find useful work in the private sector, at a wage greater than the Basic Job but lower than their previous wage. If I lived in the US, I’d happily pay former postal workers $7.25/hour or even $15/hour to clean my flat.
Replacing expensive postal workers with cheap Basic Jobbers further reduces the cost of a Basic Job.
In contrast, a UBI would likely make the cost of labor go up, since about most existing BI experiments resulted in a 10% drop in labor supply.
TL;DR This model does not compute the change in the net income to society, which is what we care about, but rather the change in net income of the government. It is equivalent to assuming that the UBI checks are worthless.
To detail:
According to [1] (just found that source on Google, can’t vouch for it, but it looks consistent with the IRS website), the gross US wage income in 2010 (to have the same labor force size as your post) is $8,040 billion.
Going by your model, basic jobs require about 1 T$ of tax expenses. If this was a flat tax on wages, it would be about a 12.5% tax rate.
Up to experimental error, this is the same tax rate as Social Security, which is what we are trying to replace. So we pass the sanity check.
Also going by your model, UBI (of 14500$/yr) requires 3.3 T$ in
direct_costs– just the payments. As a flat tax, that requires a 41% tax rate. All the other contributions in your model are less than 10%, and therefore negligible to first order.So doesn’t this show that UBI 330% times as bad as BJ?
The money that goes through the tax system is really 3.3x times as big, so if you think that, say, 5% of all money that touches the government necessarily gets wasted, then UBI would indeed waste 115 B$ more dollars. However, there’s no strong reason to assume that
administrative costsgovernment waste is strongly proportional to government revenue.Ignoring these sorts of costs along with economic effects due to change in behavior (which are what we are actually trying to measure), tax revenue is only a cost to society as far as it is, well, a cost to society’s individual members. So let’s look at the cost to productively-employed Americans:
Under BJ, everyone has to pay a 12.5% flat tax, which gives
post-redistribution household income = (1 - .125) * gross household incomeWhile under UBI, everyone has to pay a 41% flat tax, but gains back 14500 $ per household.
post-redistribution household income = (1 - .41) * gross household income + 14500 $ * number of adultsAnyone earning less than 50877 $/yr will earn more money under UBI than under BJ, while anyone earning more will earn less. Two-adult households with 1 adult working earn twice the UBI, so these earning less than 101754 $/yr will earn more under UBI than under BJ.
Of course, there might be other ways of financing this that are somewhat than a flat tax on wages, but the point – that the UBI can’t be ignored – still stands.
[1] https://taxfoundation.org/summary-latest-federal-income-tax-data-0/
“Basic Income goes to everyone. A Basic Job goes to a much smaller number of people. Even if you assume lots of overhead, Basic Job is cheaper.”
But you can’t afford to increase taxes as much for basic jobs. The amount that you can’t afford to raise taxes is exactly equal to the amount that basic income gives to people who don’t need it.
A big part of the appeal of UBI is the lack of gatekeeping and perverse incentives, so people who don’t need to jump through hoops to prove that they need a benefit and people who need it a little bit less don’t change their behavior to qualify. The assumption that people who don’t need the money would pay it back in taxes just pushes this problem to the tax side instead of the spending side. Another way of saying this is that UBI gets rid of the high marginal tax rates inherent in benefit cliffs, but the only way to recoup the money is by introducing similarly high marginal tax rates.
Correct. A point I think I also made.
“India has a much lower skill level than the US, yet over here we find plenty of work for people to do. They produce value. Not a lot, but some.”
For 96% of Indians, maybe. You haven’t found work for about 4% of people.
A U-6 of 4% is pretty good. Close to maximum employment. Getting that for lower-skill US workers would be amazing.
5% unemployment is what you get if everyone loses their job once every 3.3 years, loses/quits their job, and finds a new job in 2 months. It’s called the natural rate of unemployment for this reason.
And everyone is able to adequately support themselves with this work, so the various charities in India basically have nothing to do?
What I saw in India was 5 guys standing around a hole , 2 with shovels and the rest being “encouragers” . Granted, many of those could have been passerbys, and given the population of Delhi, everything kind of merges into a human mass of a sort. That being said, at some point, “the robots” will make human grunt labor inefficient, and the value of said “make work” will decrease even further from where it is now. I can see human projects remaining useful in rural areas of different nations, where getting machines out there would be difficult, but then that replicates in some ways the CCC of the ’30’s.
Sounds like Caltrans.
Sounded more like the filming of an adult movie.
I agree.
There is a weirdness in US politics that I could never understand: that even the biggest of the Big Government socialist programs, for-profit business has to be involved.
– That Bernie-the-socialist would make the government pay your education, but instead of creating government-ran public universities, he would just transfer money from the government to the existing for-profit universities. Wat?
– That pretty much every idea of universal healthcare still means for-profit hospitals or even insurers, instead of the government running public hospitals. Wat?
– And these basic jobs would be at private, for-profit business? Wat? Are they NUTS? Why not public works employed by the government, or the municipality?
I am actually not a big fan of government intervention / socialism. But if it has to be done then OBVIOUSLY it has to be done in the European way where the government does things directly, running these things directly, instead of funneling money (or serfs!) to for-profit busineses which would be LITERALLY the worst of the both worlds of socialism and capitalism.
What Denmark tried to do is instead of this worst of both worlds mixing of socialism and capitalism, sort of set up parallel, isolated capitalist systems. So on one hand they try to minimalize regulation on the private market, especially on the job market, try to keep it easy to hire and fire people. On the other hand, the government sector is ran by the government directly, the schools, the hospitals, trying not to give taxpayer money to private businesses.
Isn’t it sort of obvious that if you need to have a compromise between socialism and capitalism, you need to have these two elements isolated and not just have the government funnel money or workers to private businesses?
So why not public works? The way it works currently in Hungary avoids many of these problems. It is mostly unskilled Roma people living in villages who just walk 500m to the mayor’s office to show up for public works. The mayor either does not take it too seriously and assigns work like mowing the lawn and it will be 2 hours of actual work done and 3 hours of fooling around and then going home. Or maybe takes it more seriously and has them dig potatoes on the council owned lands, later on the potatoes are given to the very seem people for food. Or in some cases there is a small council-owned business having them do simple handwork like making fruit jam which the business tries to sell on farmers markets.
The whole thing is not strenous, it is meant for the kind of people who are entirely hopeless at getting a job or doing any kind of self-improvement, it gives them a little bit of pride and discipline, and reduces the free time and boredom that could be an incentive to crime.
And especially public work actually solves the whole purpose and meaning and public resonspibility. True, crappy work at Amazon does nothing of this kind. But municipal public work? By repainting a public bench you literally did something for your community you could be proud of. You don’t feel like parasite, you feel like you contributed something.
I cannot really agree with this idleness-is-good argument because aristocrats and homemakers. Seriously, Scott. Ever went to a real ghetto? From everywhere in black ghettoes in America or white rural poor areas in Appalachia to Roma villages in Eastern Europe there is zero signs of using free time well, there is boredom, despair, nothing to do, just stand on a street corner or watch TV, and it is this boredom, ennui, and no sense of any improvement is what makes people commit crimes.
Really Scott you have to accept many people don’t deal well with too much free time. It is not even that those groups are low IQ or similar, although often so. I am high IQ and absolutely terrible at dealing with free time, I used to spend school breaks playing videogames while constantly hating myself for doing so instead of going out, in adulthood at a day off I often got drunk by noon so that I don’t have to deal with soo many empty hours with no duties to do, and so on. It happens with high IQ people too but tends to be far more frequent in poverty stricken low IQ areas.
Some people need a bit of duty and discipline. Of course clearly not long shifts at Amazon.
But if I was unemployed I was totally OK with forcing me to do 2 hours a day from 9:00 to 11:00 the municipal flowerbeds. At least I would get out of bed, do something, feel good about doing something, really, work therapy, socialize with the people doing the same and then by 11:00 done, we are together, in a good mood, we can do things together, have social life and so on. It sounds far better than getting out of bed at 11:00 and getting drunk by 12:00 just to not have to deal with empty hours.
OK I know I am mentally ill and get treated for it. But in the ghettoes this is extremely common and you cannot treat them all.
My point isn’t even simply arguing for public work. My point is asking what the hell is wrong with America that when you talk about the government guaranteeing jobs, how it is not obvious it should be government or municipal jobs, how the hell does the idea of the government guaranteeing jobs as private businesses even emerge? Same story as Bernie-the-socialist making the taxpayer pay your tutition to for-profit universities, instead of just making government-ran universities? WTF is this all?
> That Bernie-the-socialist would make the government pay your education, but instead of creating government-ran public universities, he would just transfer money from the government to the existing for-profit universities. Wat?
Not true, the legislation he proposed was specifically for public universities, not private:
https://www.sanders.senate.gov/download/collegeforallsummary/?inline=file
Edit: And while a lot of the public universities are run a lot like their private for-profit brethren, this legislation specifically says the funds can’t be used for administrative purposes or building fancy buildings.
Money is fungible, so this restriction would be useless. The university just uses the money for permissible goal X, and the money it would otherwise have spent on X goes to administrative purposes.
People low in trait conscientiousness have no problem with sitting around doing nothing all day. I should know, I’m one. There is nothing better than laziness, an entire day with no tasks on the agenda. You really need to understand that there are lots of people out there and they are very different from yourself.
And you might want to cool off on the “WTF AmeriKKKunts you’re so bizarre” rhetoric right now. It’s not very popular at the moment.
Actually the vast majority of schools and health insurance companies in the U.S. are nonprofits. Many hospitals are as well, not sure exactly what % though.
I don’t agree at all with the public/private sector point. There is a lot more opportunity for corruption and inefficiency with state-run institutions. Private companies tend to be more efficient. (That’s the theory. From what I gather, the American health sector is regulated to death, allowing for plenty of corruption and limited competition.) Just because we feel the need to have some sort of income redistribution to ensure that everyone can afford to pay for a service is not a reason to change who provides the service.
Take the European model. You go to a state hospital, and your treatment costs the state €1000. The state hospital may be good or bad, depending on the country and place; you have no choice. Perhaps you would rather go to a private hospital which provides better service for €1500, with you paying the €500 difference. But in the European model (at least in some countries) you can’t do that: if you go to the private hospital, you have to pay the full €1500, and the state doesn’t pay the €1000 towards your treatment, even though you’ve just saved the state €1000 by not going to the state hospital. Why? Allowing you to have the state pay the same sum towards your treatment in a private hospital as the state would’ve spent on you would give you more choice (without paying the full cost despite also paying for state insurance), and force the state to provide good service. Then again, at that point it’s quite possible that private hospitals would provide as good or better service than the state even for the same price, making the state hospitals superfluous.
The American healthcare system seems very dysfunctional, but I don’t think that healthcare providers being private is the reason for that. And the European system is very dysfunctional, too, particularly in poorer countries where the state doesn’t have enough money to provide good healthcare, yet private alternatives are stifled.
> Take the European model.
Given Europe actually exists, wouldn’t it be better to take the actual European model rather than literally made up figures?
Health insurance in Europe is ludicrously cheap by US standards, principally because it is in a free market and has to compete with zero-priced options. That more than makes up for the cost of paying for two systems, just as having multiple car manufacturers more than makes up for the inefficiency of having multiple brands.
Do you mean state insurance or private insurance here?
A healthcare system based on competing private providers only could be a free market, and keep the prices down. As I said, I can completely imagine that the American healthcare market is not really a free market and there is not enough competition, but if so, I don’t see much other explanation for that than over-regulation.
Sure. But a system where if you want a Chevrolet, you have to pay both the price of a Ford (which has been designated Official State Car) and a Chevrolet would be a pretty dysfunctional and unfair system. And I doubt you’d end up paying less than in the system we’re used to.
> And I doubt you’d end up paying less than in the system we’re used to.
Again, you keep speculating, when the numbers are readily available.
Average price of health insurance in the UK is £1,349 per year, which is approximately the median US _monthly_ rate. Top tax rate in the UK is 45%, compared to 37% in the US. Even if all that extra tax were to go on health care (it doesn’t), then very few people would have sufficient income over the top tax threshold to be better off in the US system. And that’s even if they were healthy adults prepared to accept mediocre restricted coverage health insurance.
None of the many states that have been controlled by Republicans for multiple decades have succeeded in creating a market with downward price pressure from competition. This suggest either that they are all uniformly incompetent, or that doing such a thing is sufficiently difficult that it is beyond the administrative capacity of the US government at current funding levels.
That comes to $1,811.85.
Lots of people understand that everyone who works for a non-profit makes a profit. The only thing a non-profit lacks is any reward for competence and efficiency.
I disagree. I have worked for a few non-profits and there are certain rewards for proficiency and competency, but they would not be anywhere near the potential level of promotion in private sector, but the turn-over I saw in my experience was related to a variety of factors, a lot of which was more about the nature of the work than lack of reward, but perhaps I just lucked out to be around a relatively non toxic work group, or at least the toxic ones quit on their own.
I didn’t say they were toxic. I’ve work for non-profits. It doesn’t matter how dedicated people are because there is no way to measure efficiency. If we were to decide whether new computers were worth buying than it was just a matter of getting them payed for. No cost benefit analysis was done because it was not possible. Not that they were lazy but there was no way to quantify efficiency.
If you can’t quantify what you’re doing, how can you tell if you’re doing it better than the null action would?
That might be endemic in nonprofits, but it’s a fatal flaw when it occurs.
shen:
response by dec:
+1 to dec. I do get the impression as dec says but I sure hope it isn’t that endemic. I’d like to know which non-profits think this way, so I can avoid contributing money to them.
“Really Scott you have to accept many people don’t deal well with too much free time. It is not even that those groups are low IQ or similar, although often so. I am high IQ and absolutely terrible at dealing with free time, I used to spend school breaks playing videogames while constantly hating myself for doing so instead of going out, in adulthood at a day off I often got drunk by noon so that I don’t have to deal with soo many empty hours with no duties to do, and so on.”
THIS. This this this. Not the getting drunk part, but all the rest of it. When I was a kid summers were the worst, and now that I’m an adult I routinely feel depressed by the ends of my days off. This was true even when I had a crap job working at Starbucks—that crap job, as relieved as I was to leave it every day, was better than having no structure. And don’t say, “people can create their own structure,” because some of us can’t. Any structure not enforced by some other human being will be gone in a week.
Scott thinks that given free time, people will do what makes them happy. Maybe that’s true for some people; if I’m given free time, I will do whatever’s *easiest,* no matter how depressed it makes me feel in the long run. I will sit and play WoW for 8 hours at a stretch even when I’m *not currently enjoying it,* because it would take more effort to stop than to keep going. Also: Scott thinks that the more energy you have to spend on work, the less you have for things you enjoy. My experience has been that energy is use-it-or-lose-it: during times when I’m forced to work, I can force myself to do other things too, and when I don’t need to work, I don’t seem to have energy for anything. While I was working two part-time jobs and studying for the Bar, that’s when I was using my precious free hour a day to work on a novel. Now that I just put in 40 hours a week, and all my other hours are free, it’s back to WoW, and sitting depressedly in front of Twitter, and hating myself for not making the effort to do something I would really enjoy, like working on the damn novel.
Why the fuck am I like this? I don’t know—maybe it correlates with addictive personalities—but I think the success of UBI depends very much on how many people are like me (and nameless1, apparently) vs how many people are like Scott. I am personally glad that I don’t have the choice of UBI.
There would be 100x as many incels if shy 18 year old males never had to enter the workforce.
And depression and boredom after retirement is a big deal! My parents said they saw plenty of retirees drink themselves to death out of boredom, hence they had a rule of never drinking before 6.
This isnt a normal mindset that you are describing though. Self-motivation is a difficult concept to truly quantify, but a lack of it isnt set in stone either. I have been through varying levels of self-motivation, and sometimes it was correlated with having a job, sometimes not. Sometimes my job decreased my drive, and other times, it would set my day off on a good path. Routine, at least to me, is what matters more, and that can come from many activities, not only paid employment.
>Ever went to a real ghetto? From everywhere in black ghettoes in America or white rural poor areas in Appalachia to Roma villages in Eastern Europe there is zero signs of using free time well, there is boredom, despair, nothing to do, just stand on a street corner or watch TV, and it is this boredom, ennui, and no sense of any improvement is what makes people commit crimes.
I bet if those people had some money to spend, that would make their lives more interesting and stimulate the local economy as well.
I recently read something about the strong value of boosting consumer spending in these Ghettos, that wasnt drugs, alcohol or Junk food. The findings were mostly positive for the effect….
You forgot another point: most jobs need capital and other overhead. E.g. you can’t run a daycare with just a bunch of kids and some staff, you need food and toilets and nappy changes and telephones and somewhere for the little kids to nap and in many parts of the world shelter from the weather. Rule of thumb – hiring a person costs 1.5 to 2 x their salary.
Amazon treats their people poorly because they want them all replaced by machines as quickly as possible. Why treat them well or train them if you are just going to get rid of them?
First, UBI isn’t going to happen because we can’t afford it. As the boomers finally retire, we are going to bankrupt Social Security, Medicare, state and local pension plans, then finally Medicaid as we hit our expensive nursing-home years. We’re the Locust Generation.
Second, there’s no right amount. If you are a single (maybe senior) person who wants to live alone in an apartment in California, you need at least $2000 a month. But that same amount given to five 20-somethings allows them to share a rented house and party, party, party! Why get a job?
Third, if you do make jobs less attractive, and therefore force wages up, you’ll see more of the same reaction expensive labor causes now — jobs replaced by automation or moved to the third world. It’s not like you can make something more expensive with no consequences.
Fourth, increasing the resources of renters/buyers without increasing the supply of housing is just going to drive up the price. And you can’t drop the price of housing without pissing off existing homeowners, who think of their house like it was their retirement savings.
Fifth, retirees may be happier than disabled people, but I don’t think a very high percentage go back to school, learn new hobbies or start businesses. 80% of retirees go into vacation mode and/or start drinking a lot.
UBI may sound like it’s based on compassion, but I really think it’s based on contempt. The Silicon Valley types may say “oh, you can start a business or go back to school”, but they don’t think that’s going to happen. They don’t think these low-income crap job people have it in them to do better. Their real attitude is “you don’t have the skills, the education or the ambition it takes to survive in Silicon Valley, where we are Inventing The Future! So here, take your dole check and go back to Kansas, live in a double-wide and do whatever it is you people do. Just go away. And I can feel charitable while I chase you out.”
Some of them don’t. What should happen to them?
Living on low wages would be a lot easier if rents were lower. We really have to build a lot more housing! But Californians are convinced that housing is an investment, not an expense. And so they really don’t want the price to go down.
How does