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 subsidized housing drag down property values? There are rent controlled apartments in San Francisco precisely because values and rent is so high…..
Rent is high in large part because it brings with it the privilege of having lots of Cool Rich People in your neighborhood, along with lots of shops and restaurants and cultural venues of the sort Cool Rich People like. Lots of rich people(*) value these privileges highly, and will bid large sums of money in the marketplace to be one of the few who can enjoy them.
The sort of people who wind up living in subsidized housing are Not Rich. The are at least in the abstract expected to be mostly Not Cool and support a correspondingly uncool local economy and culture, which would dilute the value of living in a particular neighborhood and thus the rent that people are willing to pay. Some of them will move into other still-Cool neighborhoods, or into remote suburban enclaves and spend the money they save to commute by Uber.
*Including some Uncool rich people, but that’s another matter
In a very real sense, we can afford it and always have been able to. The world produces enough food to feed everyone. That is obvious, because if it didn’t, we wouldn’t have as many people inhabiting the world. The world has enough housing for everyone that needs it to survive. Enough clothes. Enough of everything that people require to exist, or they wouldn’t exist. UBI is a new way of distributing those material necessities. Remember that money as understood today is inherently worthless. It’s coins of low value materials, badly burning paper, or bytes in a computer. Money is the grease of world economy, not the fuel.
There is, it may just not be immediately obvious from the start, and it doesn’t have to be fixed for all time. Early experience will show what is the right amount to reach the desired effects while minimizing the undesired ones. Constant monitoring as is already common allows the government to adjust the amount year by year or whatever period is appropriate.
Some would say that’s a positive side-effect of UBI, rather than negative. Once you decouple income from work, who cares where the jobs go? If you’ve been a truck driver all your life, get UBI on top, and sudenly you lose your job forever to self-driving trucks, you don’t have to fear sudden homelessness. UBI gives you the time to find a new source of income, if your financial obligations and/or desires make you. All other things being equal, being out of a job is a lot less scary with UBI than without.
It might drive down the prices because people don’t have to live somewhat near their jobs. Additionally, there is still competition between homeowners to rent out their property. If everyone else jacks up the prices, all it takes is one homeowner to lower he price a bit so he will be guaranteed to always have a tenant. Then another will lower the price a bit more to get the same advantage and so on, until the rent for a given area reaches an equilibrium, which will be below what is theoretically possible when everyone is known to get UBI.
Do you see a real, fundamental difference between school, hobby, vacation, and becoming an alcoholic? Or do your own likes and dislikes get the better of your argument? Who are you to prescribe retirees, or hypothetical UBI recipients, what they should or shouldn’t do with their spare time? UBI is not universal if you require people to be useful to society in any way to get UBI.
1) you are saying we can afford it because we support all those people somehow now. But the whole point is to improve the living standards and security of the poor. Which means spending more on them.
2) Cost of living varies across the country. Are you going to pay a different UBI in Wyoming than in California? Are you going to be able to fine tune it for each area? Is anyone going to let you reduce UBI from year to year? If people want to move into very expensive areas, will you increase their UBI to allow that?
3) You are making the economy less productive by converting workers to welfare recipients. This cannot help the overall economy!
4) I don’t think UBI will revoke the principle of Supply and Demand.
5) You really see no difference between people going back to school and people becoming alcoholics? Does the opiate addiction and suicide rate bother you?
1) There is much more to UBI than that. The point of UBI is about treating people like human beings. To remove the stigmata that come with unemployment and receiving welfare and alternative lifestyles and having to subject oneself to a grinding bureaucracy because you don’t want to starve and freeze when you’re out of a paying job. To change the economic realities so that people can realistically to do people work such as care for children, the elderly, and general health care, rather than computer and robot work such as manufacturing or moving things. UBI is a subsidy for people rather than for machines and corporations, as is the status quo.
2) No, I’m opposed to that. For example here in Germany, we still have a noticable divide between east and west in standard of living, almost 30 years after the reunification. Wages and even federal support like pensions and other things are lower in the east. I’m opposed to that because it only keeps alive resentments. If UBI is the same everywhere, the market will sort out who wants to live where. People can choose that today, but if people get UBI, people will have a real voice and real choices of where to live. Not all of the choice, but more than today.
3) The more computers and robots do work, the less the economy depends on manual labor. More and more human jobs in developed countries are “bullshit jobs” that nobody would miss if they were gone. And if the departure of those jobs would lower a country’s GDP, I wouldn’t give a flying fuck, as long as nobody is in a worse situation, economically, because of it. GDP is a just a number. What counts is everyone’s individual life.
4) I’m not arguing anything of the sort. In fact, I agreed with you implicitely. I merely pointed out another aspect that would act to reduce housing prices. Combine the two, and any other we didn’t discuss, and you get a real housing price.
5) As far as their own happiness is concerned, no, there is no difference. If that is what makes them happy and it doesn’t negatively affect others too much, so be it. People have been fucking up their own lives forever, with or without UBI. If anything, taking the edge off the hardships of the modern economic life and uncertainty of the future through UBI will lead to less self-destructive behaviour, not more of it. Yes, some people become hopeless addicts and suicide cases because their brains are hardwired to, no matter how well off or happy they seem to be in life, nobody can change that. But I’m convinced that most people have an external reason to fall into that behaviour, and if UBI can reduce that, I’m all for it.
+1
Lose job; gain ecstatic communion with the divine!
I agree with a lot of your points, but I think #2 would be easy to solve by having the federal gov’t give a set UBI at the very low end, say $15k/yr, and have states give additional on top if they want. So probably in Mississippi someone could get by with just the federal UBI, but in California they decide to give an extra $20k/yr.
Yea there might still be expensive areas where UBI folks won’t be able to afford to live (Bay Area, etc.), but is that really a problem? Perhaps not being able to live in the most desirable places is a consequence of not working.
I agree with most of your points but I think it’s worth pointing out that your “low end” estimate of 15k/yr is roughly triple the current budget for all US federal entitlement programs, assuming no administrative costs in mailing a check to 300 million people. Going off this 2010 budget breakdown: http://econperspectives.blogspot.com/2009/02/2010-us-federal-budget-by-category-of.html
You very specifically should not have different UBI levels in different places:
1) Desirable location is a luxury – luxuries must be worked for under UBI.
2) It eliminates most of the desirable decentralizing effect of UBI, where people can spread out to less overpriced regions that lack jobs.
3) The smaller the zones used for location adjustment the more able landlords are to perpetually raise rents and soak up the adjustment.
>3) You are making the economy less productive by converting workers to welfare recipients.
Or possibly converting non-workers (or workers who don’t register in the monetized economy for any of the reasons Scott mentions – caregivers etc) to welfare recipients.
>This cannot help the overall economy!
It seems likely to create a surge in demand, which ought to be good for the overall economy.
Why? The extra income isn’t coming from nowhere, it’s coming from taxes on someone else who now has less money to spend.
Or it is coming from the cancellation of other programs, in which case the people who had been receiving money from those programs now have less money to spend.
David, this assumes that person would be spending it largely on goods that stimulate the economy and increase GDP.
You’re assuming that production won’t drop as some people quit working and live off basic income.
Now, if you mean a basic income just enough to keep people from being hungry, that’s feasible; very little money (by Western standards) is enough to keep people alive. But then it wouldn’t be a big improvement: pretty much everyone in the US already has enough to eat, either through work or some government program.
Yes, I assume that. In countries that could afford UBI, the agricultural sector operates with trace amounts of human labour, and the global trend is significantly downwards and has been for decades. Losing a large percentage of that workforce that could not be compensated for by automation seems unlikely, because working with animals and the land is meaningful work that people actually love. It’s about as far from being a bullshit job as it gets. There is an actual market for “working on a farm” event vacations. People pay money for the privilege! I’m not worried about food production at all, as far as UBI is concerned.
If that’s the case, then why are American farmers lobbying for immigration reform to fix labor shortages?
I suspect that those “working on a farm” vacations involve only a small portion of the labor that is required to run a modern farm.
@INH5 I don’t know. Maybe they want to increase the number of available workers so they have to pay less. Maybe the US immigration laws have become self-harmingly strict. Maybe automating the kind of jobs they need manual labor for IS possible, but there hasn’t been enough incentive yet to try harder.
INH5 There certainly are crops that require more detailed human labor vs general machine harvesting and planting, but as machines become more sophisticated, this will become less and less……I actually see a potential growth trend in tourist farms, as mentioned below.
Are you holding retirement age fixed?
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.
There is no need to subsidize their consumption choice.
No, you don’t need $2000 a month, because you don’t need to live alone in an apartment in California. That’s merely something you want to do.
UBI is for things you actually need, and things you want but that won’t cost the taxpayers more than maybe $500 a month. For the rest, you get a job, or you live off your savings, or you hit up your friends and family, or you make your case to a charity.
As I’ve pointed out to David Friedman and others in this thread, a federal UBI wouldn’t be calculated based on cost of living in the most expensive parts of the country, it would be calculated based on the national average. In particularly expensive areas, state and municipal governments would likely provide their own additional UBI for residents to account for the higher cost of living.
It’s a pretty fast way for a city to go bankrupt if it keeps on paying its citizens a premium to live there, a premium that strictly goes up as more people are given more money to bid up the price of the positional good.
It would be funny to watch so I encourage some city to try it.
The Job Guarantee is actually better suited to offer useful and fulfilling work to disabled people, than anything else.
You don’t have to make JG jobs work based on a profit motive, you can prioritize social benefit instead. you can pay disabled people to do anything they like, such as help run and participate in organizing social events for other disabled people etc..
The JG doesn’t end disability or unemployment payments either. If people want to remain on unemployment payments or on disability, that is fine.
This also takes care of ‘2’ there: Caring for a sick relative is clearly something you want to pay people for, to prioritize social benefit – the JG can pay people to do that.
Absolutely you should be able to quit your private sector job, to go on the JG to take care of your relative – that’s exactly the kind of thing we want to enable.
Where are you getting this “dig ditches and fill them in again” nonsense? Do you think there is a lack of useful work to do or something? Get back to me when we’ve completely revamped our energy infrastructure, to have zero carbon emissions (or even, negative) – then tell me there’s nothing useful to do…
Serious lack of critical thought there…
On ‘3’: Pay people to run free day care centers for children of JG participants (not for all), give people JG work at home, single parent allowance on top of JG. Pay people to raise their kid until they are in school, since that clearly qualifies as something that’s socially beneficial – then work at school hours.
On ‘4’: Pay JG participants to build more housing and improve/expand transport infrastructure…
On ‘5’: Pay these people to seek treatment and work on self-improvement, and pay other JG participants to help with this. The true lost causes are a minority, and are a concern separate from the JG program.
On ‘6’: Fire them. They are a minority. It’s a guaranteed opportunity for a job – not a guarantee of a job, even if you take the piss endlessly.
On ‘7’: Transfer to a different JG job. The people who take the piss will be a minority that can be dealt with.
On ‘8’: Basic Income is just a business subsidy in disguise. Everyone who is working will have their BI payment taken from them, by businesses slashing their wages over time. Costs of living will also rise, as businesses will know you have more money to pay.
The JG is explicitly not supposed to compete with the private sector.
On ‘9’: The JG pays to train people as well, not just give them work on its own. Pay people to retrain. Who the fuck said JG was 40+ hours a week? Stop making stuff up.
On ’10’: Their paychecks aren’t ‘subsidized’ – they’re bloody working for the payments! You don’t see public sector workers getting insecure, as if they’re dole recipients…
On ’11’: Give people work that is personally fulfilling and doesn’t suck, then… Change the dynamic of how jobs are paid: Pay people MORE, for doing the shittier job, even if they’re unskilled – like the way it should be.
A Job Guarantee boosts GDP and pays for itself by keeping GDP more stable during economic recession (which is the main time the JG will grow larger). A Basic Income just becomes a money pit when an economic crisis hits and Revenue decreases – and creates excessive inflation – threatening its own existence/affordability.
A government with control over its own currency, and with enough productive work being done (inside or outside of the JG), will never have trouble affording it.
Unemployment payments will always remain an alternative to the JG. There is always that opt-out.
There are extremely easy solutions to all of the problems you present – please put a bit more critical thought into it.
There are 3 main reasons a UBI is extremely dangerous:
1: Businesses can turn a UBI into a business subsidy, by slashing wages in line with the UBI
2: The UBI can be turned into a Trojan Horse that destroys the entire Welfare system, by replacing all Welfare with the UBI, then destroying the UBI/Welfare in one swoop, when a big enough economic crises hits (as it would be ‘unaffordable’).
3: There is no solid proposal for paying for the UBI. It is highly likely that it will lead to a REGRESSIVE transformation of the tax system, i.e. it is often paired with a Flat Tax.
The danger of the UBI, is it can provide exactly the OPPOSITE of what it promises: Destruction of welfare, lowering of wages AND a more regressive tax system – with people left without a pot to piss in, after a big enough economic crisis is used as pretext to destroy it all.
Unfortunately my comment is huge – to discuss this topic, you’ll need to make your posts shorter and more focused – so that individual issues can be addressed better.
Construction is skilled work. The people capable of doing these jobs don’t struggle to find work in the private sector and would not be clients of the JG system.
Great, then train them and send them back to the Private Sector, since they’ll easily get that kind of work.
Quite the pivot, there.
How, exactly? The purpose of the JG is to reflate the Private Sector – and if there is ample demand in the construction industry as you say (not saying I agree that there is, I’m running with your line of argument…) – then isn’t that the perfect way to do this?
Yeah, work training programs can be good.
They are not job guarantees for everyone.
You just offered a point of support for a UBI. How are people supposed to re-train if they cant take time off or suffer a $$$ loss while they re-train? A UBI would, in theory, make this feasible.
The JG pays people to retrain…The JG makes it easier to get the time off, and to get paid for retraining, than the way it is now – it’s better than the UBI in that regard.
Of course, once you manage to saturate construction with trained labor, they all come back into the jobs program and need to be trained in the next industry that you want to distort the labor market of.
If the JG pays for re-training, yes.
On 5, 6, and 7 – How convinced are you that they’re a minority, and that they’ll continue being a minority?
Plus, expect every firing to be litigated to exhaustion. And will fired people still be eligible for welfare?
They get suspended if they endanger anyone, if they come and are on drugs they can go home or to treatment, they don’t get paid if they don’t show up or refuse to participate (obviously sick days and holidays are different). Yes still eligible for food stamps and medicaid, or more likely single payer by the time this gets passed. And I would imagine a society that wasn’t using the Fed to play sadistic musical chairs with the number of jobs while simultaneously telling people they are worthless slobs because we pulled their chair out would have a lot less rage in it.
A minor point: you say that UBI increases demand for labor, as part of your argument that labor conditions will get better. I don’t think that’s right. I think a UBI primarily reduces the supply of labor, which has the same effect of course. UBI probably actually reduces demand for labor as well, because people who opt out of the labor force will consume less, but you hope (and I for one believe) that the reduction in demand will be smaller than the reduction in supply.
When you go on a vacation, do you need more money than when you are at work, or less?
If it’s a permanent vacation where I’m on a restricted budget… I can see the argument for less. I’d likely do more things for myself instead of seeking out others to perform the service. That’s likely a good thing in the moral self-sufficiency sense, but certainly less demand in the service industry.
I usually would only refer to myself as going on vacation when I travel, which adds in all sorts of travel-related expenses (including prominently paying for a hotel room while of course continuing to pay rent on my apartment back home). As an academic, I spend a decent amount of time on breaks because of the academic schedule; my expenses are generally lower during a break than while I’m teaching.
Two points in response:
(1) Many of Scott’s arguments for “work causing poverty” are arguments that working drives up a laborer’s consumption demands. For instance, the substitution of prepared or processed foods for home-cooked meals is likely a substitution of consumption for using one’s own labor.
(2) As I understand it, the standard assumption for retirement planning is that expenses drop in retirement vs. the working period just before retirement (I want to say by 10 – 20% but I’m going off hazy memory). While people may optimistically overestimate the magnitude of the drop, I don’t think many people experience an increase in expenses just from retiring. And retirement seems like a better analogue for UBI than vacation, which you could argue is mainly used to recover from the demands of work. If that interpretation of vacation is right, it’s not a great model for life under UBI.
There’s some historical examples of “guaranteed jobs”.
http://scalar.usc.edu/works/star-of-the-sea-a-postcolonialpostmodern-voyage-into-the-irish-famine/public-works-system
https://www.irishtimes.com/news/road-works-made-means-of-relief-1.83756
http://www.historyhome.co.uk/peel/ireland/famine.htm
One advantage of having something like this in national history is that when the same idea gets trotted out like clockwork for the millionth time it can be shot down in irish politics fast with
“guaranteed jobs? so, famine roads.”
You can still find long pointless roads in the middle of nowhere in ireland. Not going from anywhere important or to anywhere important, just lines on a map because they were make-work equivalent to carrying water to the ocean.
My one criticism is that there’s still going to be disability gatekeeping.
It’s expensive to have MS. It’s expensive to have a lot of disabilities, just practicalities like electric wheelchairs or ventilators or cars adapted so you can use them. UBI is unlikely to come close to the minimum cost of survival for many disabled people so it’s likely there would still need to be additional funds and gatekeepers around those funds.
I think paying for things like wheelchairs and ventilators are easier to manage as able bodies people don’t have the incentive to pretend to need a wheelchair as they do for cash payments. Obviously if you give disabled people money to broadly cover costs but without controlling how it’s spent you might see more of the problem.
Running through some things that were subsidised for a family where the mother recently died after a long decline from MS…
Every few years they had an allowance to help with the cost of buying a car that could accommodate her. They got a grant towards upgrading parts of their house to make them more suitable for caring for her. They got some payments to help with care though her husband almost killed himself ( not talking rehtorically) trying to care for her, their kids and run a farm on his own before he admitted he needed to accept that help.
But all of these things are stuff many people on the margins would also likely want. People who are a bit disabled but not quite enough to need a special car or to upgrade their bathroom or not enough to really need a nurse or home help come in a few times a week.
There’s still going to be gate keeping.
The main problem I see with basic income is that the world is not rich or advanced enough for it. If the US spent all tax revenue on basic income, we could only pay about $10,000 or so—less than a minimum wage job—and that would be with repealing all other forms of government support including social security. I am pretty frugal, but $10,000 does not seem liveable. Realistically, our economy and tax revenue would almost certainly shrink since people would work less, meaning that we would be able to sustain an even lower level of basic income. Also, a basic income guarantee could be net-negative for the utility of humanity as a whole if it leads to stricter immigration laws. In the long run, basic income would be utopia, but there is still a lot of unpleasant work that humans today need to do to maintain our living standards. Policy today should be focused on maximizing growth and innovation; the best we can hope for is that future generations can get a basic income when that innovation results in much less labor being needed.
A basic jobs guarantee could be much cheaper if the jobs are bad enough that only the truly desperate would want them. They could be blatantly make-work jobs and also wouldn’t need as much gatekeeping as our current welfare programs because people would gatekeep themselves from such jobs.
Tax revenue can be increased by rate hikes. Most UBI proponents are assuming that.
There’s a limit to that because rate hikes will discourage working further. The US does spend less on social spending than other countries, but not that much less: https://data.oecd.org/chart/4Tcd. Sweden spends about 27% of a $50,000 Per capita GDP, or $13,500. We spend 19% of a $60,000 Per capita GDP, or $11,400. So even if we matched the levels of the country that is practically synonymous with the welfare state, we would not be able to pay a minimum wage job worth of UBI. The extra $2,100 does not make a huge difference to my argument.
You can’t talk about how most people get most of their money back and then blithely talk about increasing taxes until utopia happens.
The rich do not have an unlimited supply of money waiting to be seized to fund the revolution.
A UBI of 10K for 300M people is 3 Trillion-with-a-T dollars. Unless you actively say you want to zero-out Social Security, Medicaid, Medicare, you are still funding the rest of the government as it exists. I will grant you a magic wish and pretend that 500 Billion for defense spending goes away and we need to come up with only 2.5 Trillion dollars.
The top 20% has income of 5.5 Trillion according to the CBO. So we tax them at an additional 65 percentage points. None of them stop working because we pass a law forbidding that.
Great.
Is this taking into account UBI being taxable? I assume it would be in which case you claw some back (although does risk discouraging work)
One likely model for “guaranteed jobs” is the disaster that they tried in the UK for a while.
Basically the government partners with crappy low-skill employers who’s owners are buddy buddy with the right ministers and the state provides them with a steady supply of
slavesjobseekers.They then declare it all “Education”, in fact pay a premium to the corporate partners for “providing education” in the form of 5 minutes showing someone who’s already worked shelf stacking jobs how to stack shelves.
The people who love the scheme tend to genuinely believe the fiction about “education” because they tend to be the kind of people who believe that all poor people are thick and can’t learn and really do need 6 weeks to learn how to put a tin of beans on a shelf.
Your manager is abusive? tough luck. You have no rights. if you quit or the supervisor just declare you not to be working hard enough you lose your dole money. Hope you like starvation and death.
So if your manager demands you suck his dick then make sure to bring kneepads to work.
Remarkably employers who suddenly had the option of free labor along with free money from the government leapt at the option so people found themselves fired from positions only to find themselves required to do the same job a few weeks later only this time without pay.
The government was taken to court over it, the court rules it unlawful.
So the UK Parliament passed retrospective legislation to overrule the courts.
https://ukhumanrightsblog.com/2014/07/08/retrospective-legislation-that-interfered-with-judicial-ruling-violated-the-convention-and-the-rule-of-law/
Anyone and I mean anyone with a libertarian bone in their body and an ounce of principles should be disgusted by “guaranteed jobs” because it’s thinly disguised slavery and a drive to replace paid work with forced labor.
I don’t get it, how can a voluntary program be slavery? How can a program that pays people replace paid work?
Firm fires it’s low level employees, many of those employees end up on welfare in order to keep doing luxurious things like eating and breathing.
Welfare office who are buddy buddy with the business owner then requires those same people to work the same jobs they had before only this time without that whole pesky “being paid for work done” thing. (unless they want to voluntarily give up the whole eating and breathing thing)
It’s only “voluntary” if you consider pointing a gun at someone and demanding they work for you to be “voluntary” as well since they totally have the choice of going with the other option.
Depressingly some people genuinely do subscribe to a warped definition of “voluntary” that does in fact include that.
We are talking about a guaranteed job program, i.e. a program where you get paid for work done. Or are you talking about something totally different?
I’m also puzzled why you would conflate force and coercion (pointing a gun at someone) with a program where the person would have to affirmatively request entry into the program.
Your scenario of the guaranteed jobs office somehow being in cahoots with one employer also seems very unrealistic.
In the UK system you worked for your benefit cheque and if you refused lost said cheque. There are two issues i think
1. If there’s a UBJ can you refuse one of the jobs and claim benefits? If so at the start i can’t see that lasting
2. Are you paid minimum wage or more?
If the latter is ‘no’ then there’s a real risk of displacing properly paid jobs.
This post is the textual equivalent of standing next to your fat friend in a dating site profile. It’s an obvious attempt to make UBI look better which, if anything, makes it less appealing.
Universal Basic Income is an inexcusably horrible idea. Universal Jobs is an even more inexcusably horrible idea. But “we” don’t have to choose between them; there’s always the option to do nothing instead of buying into a nonsensical millenarian scheme.
I don’t care whether you think that superintelligent AI, or the Marxist world-spirit, or the second coming of Jesus is going to swoop in and create paradise in our lifetimes. Even if you were right, and you’re not, we still need to live in the real world today. Millenarianism is the #1 society killer in the modern world and sacrificing another hundred million souls on that bloody altar isn’t going to get us one step closer to utopia.
Look at our existing welfare system, which actively discourages people from working. Would a UBI be better than that?
Because you aren’t going to get rid of the welfare state. People just won’t accept that. So, maybe it won’t give us Utopia, but I think a step away from a dystopia is just as important.
With regards to discouraging people from working:
Part of the appeal of UBI is to remove what little stigma remains for welfare users.
Just as an EBT card is designed to mimic a debit card so that people on food stamps don’t have to call attention to themselves at the checkout, “everyone gets” the UBI so there’s no stigma for having to go deposit a welfare check every two weeks. Without that stigma a lot more people are going to choose to become bums than would otherwise do so.
If we absolutely have to have welfare, it should be as humiliating and unpleasant as possible. Make the worst job in the country look appealing by comparison and suddenly a lot of “disabled” people will miraculously be healed.
You seem to think most people desire to subsist and do nothing, that there is some internal social drive to become a potato-person, sitting still and doing nothing for years on end.
I count on greed and envy; if everybody is poor, nobody cares about being poor. But if one person wears nice clothes and has cool gadgets, the others will want those, too. And that is where the desire to work arises in a UBI society, by hijacking relative social status.
Right now relative social status is broken by the incentives of a welfare system that actively punishes people for working – working drops you off the dole, right off the welfare cliff.
A UBI doesn’t. Every dollar you make makes you better off. There is no welfare cliff people cluster at. There is no point at which you can’t have a cooler jacket than your rival.
Well that explains why CPAs get laid so much more often than street-corner drug dealers. Since the CPA is pulling in potentially six figures and the drug dealer is making sub-minimum wage it’s obvious who has the higher social status.
Oops, wait, that’s the exact opposite of reality.
You can definitely obtain social status through conspicuous consumption, and after a point you do need more money for that. But you can also obtain it through displays of violence and other antisocial behavior. Hard work is rewarding but it isn’t fun, whereas violence absolutely is. Which do you think is going to define the post-UBI status hierarchy given that nobody actually needs to work to survive?
Having hung out with both street-corner drug dealers and CPAs, I can at least anecdotally attest that a CPA who put some effort into it can very easily get laid a lot more than your average street-corner drug dealer.
Relative social status. The drug dealer is higher in the social status pole in his social group than the CPA is in his.
And need I point out that the drug dealer does, in fact, have a job? You may not approve of it, but he is providing goods and services to his community. In exchange, he enjoys more income and better social status than his unemployed peers. And not, in spite other what Hollywood portrays, engaging in constant violence. (Ever met a drug dealer? They are mostly boring people. And mostly kind of annoying. They want to be your friend, because their job is surprisingly lonely and they are starved for social interaction.)
Plus, most CPA’s probably don’t actually want the partners that the street corner dealer is going with.
But as Thegnskald mentioned, drug dealers are part of the group of people out there trying to make more income. They could be safer at home but the prospect of extra income is enough to get them out working and even risking their safety.
And as Freakonomics pointed out, they’re mostly not even making very much money. The average grunt dealer is making less per hour than a mcdonalds burger flipper and the ORG charts of the dealers organization and mcdonalds don’t look all that different.
@Enkidum,
My experience is the opposite. Good game can make up for a lot, but free time plus criminal tendencies plus access to a lot of young women leads to a lot of sex. To a first approximation, every college aged woman with a dealer has at one point slept with him.
There are some white collar jobs which make you about as attractive as a drug dealer. Medicine and law are the big ones. I’m not even a real doctor, just a scientist, and I noticed an immediate increase in how attractive women found me when I listed my employer as the research hospital I work in.
But those jobs are the exception. Criminals have a huge built-in advantage on the dating market which takes a fair amount of game to overcome.
@Thegnskald
Here’s a thought experiment:
Two men are walking in opposite directions on a narrow street. One is a tax accountant and is wearing a polo and khakis. The other slings rock and is wearing gang colors.
Which one steps out of the way for the other? If they bump into one another, which one apologizes?
That’s what status ultimately comes down to. The tax accountant has a lot of money, absolutely. But his behavior shows that he’s the inferior and people, especially women, notice that behavior.
I am a programmer. Guess who steps out of whose way?
Your conceptualization of social status is incorrect, for the simple and expedient reason that it implies a king, alone and unguarded in a street, has a lower social standing than every passerby he fears might be an assassin. My social standing isn’t increased by the fact that I know how to walk like I have murder in mind, nor my absolute lack of fear.
Wait, are you talking about people who sell drugs on street corners, or are you talking about people who sell drugs on college campuses? Those are two different groups.
Sure, college-campus dealers get laid. But it’s not because being a dealer is attractive. It’s because dealing is a job you take when you know a lot of people, you’re charismatic, and you party, all of which are correlated with hooking up a lot. And it’s a mistake to assume the college-campus dealer won’t go on to work an ordinary profession afterward: dealing on a college campus is a college job, just one that’s more pleasant for some people than cleaning test tubes or flipping burgers at McDonalds.
@Ozy
No no, they’re obviously dealing the highly potent drug Confoundin.
Thank heavens.
Or…it’s more than one thing. Let’s say both your characters are in court on a dangerous driving charge…
As @Ozy said, the dude who sells weed or even slightly harder drugs in college gets laid a lot because he’d probably an affable fun dude who is at a lot of parties where there are women who are open to the possibility of having casual sex are around.
OTOH, the dude who’s going for an engineering degree is either studying or alone in his room, playing video games.
I’m willing to admit that UBI is a very radical proposal and there are probably a lot of good reasons to be skeptical of it. That said, this is quite frankly the worst argument against it that I’ve ever heard. Maybe I’m misinterpreting your point, but you seem to be saying “UBI will cause people to commit violent crimes more often because they’re bored and/or want to look cool,” which quite frankly seems absolutely ridiculous to me. Very few people commit violent crimes simply because they’re bored or want to impress others.
One of the biggest factors positively correlated with high crime rates is poverty, since extremely poor people are both more desperate for money and more likely to engage in high-risk behaviors, probably because they seem themselves as having very little to lose. (Indeed, there are people who are so poor that they’d actually be better off in prison, and I’d imagine that would have a rather extreme impact on the effectiveness of incarceration as a deterrent.) So I’d imagine that if UBI had any effect on crime rates, it would be to decrease them. That’s not a certainty, and it might not have a significant effect on crime rates at all, but I definitely can’t see it causing crime rates to increase, and absolutely not for a reason as shallow as you’re suggesting.
Who cares? I don’t really see how displaying basic politeness makes someone “inferior” unless you’re looking at social dynamics from the perspective of a teenage boy. The accountant who bumps into someone and apologizes is behaving in accordance with the norms of civilized society, so I would consider him “superior” to a thug who shouts curses and threats at everyone who bumps into him. There’s a reason TV shows and movies usually portray antisocial idiots like that in a negative light. Even when the media romanticizes criminals, it’s the cool, calm, and collected types who the audience is usually expected to root for; the short-tempered brute who flies into a rage over every perceived slight is usually portrayed as a villain for audiences to scorn or an incompetent loser for audiences to laugh at.
“To a first approximation, every college aged woman with a dealer has at one point slept with him.”
I don’t know whether I’m too cynical or not cynical enough, but I think college women are sleeping with their dealers to get a bargain on their drugs. Possibly also because he’s a fun guy, but I’m betting on the former.
@LadyJane
It is not an uncommon trope to argue that the villain and the hero are birds of a feather, where both could have gone either way.
In general, I would argue that a lot of the heroes are stoic, but not modest or particularly friendly. It’s not really the accountant type that is lionized. The main difference is who the villain and the hero are friendly and antagonistic towards.
@Nancy Lebovitz
Also possibly because they are high.
Or she may be one of those woman, and I know of at least one such(*). College dealers are I think mostly a sociable and entrepreneurial subset of people who would be college students if dealing weren’t a more lucrative profession. Sometimes both at the same time. But they likely are going to partake of the lifestyle regardless.
* Knew her almost two decades and two career changes later, but there were stories told.
@Aapje: I’ve heard of people watching Game of Thrones and idolizing Jaime Lannister; I’ve never heard of people watching Game of Thrones and idolizing The Mountain, or that one escaped bandit who kept threatening to rape everyone. Poor impulse control and violent proclivities are generally seen as negative traits in our society. We might not lionize accountants, but I’m hard-pressed to think of any meaningful way in which the polite but mild-mannered accountant has “lower social status” than the antisocial thug who resorts to threats whenever anyone bumps into him, except within the social circles of violent street criminals.
For what it’s worth, I used to deal weed and occasionally some harder drugs back in college, and I never once slept with any of my customers nor with any of my suppliers. Likewise, most of the drug dealers I knew were nerds and slackers who didn’t get laid all that much, not violent womanizing gangers.
@LadyJane
Jamie is actually a pretty good example of a hero who is fairly similar to the villain(s). The Mountain is evil because he hurt his child brother for fun as well as many servants & because he is not that good looking. Jamie is good because he threw a child off a tower to protect his sister and because he likes to have fair duels with adult men (aside from stabbing Aerys in the back, but he was evil) & because he is pretty.
Both are people who seek out violence.
Jamie is pretty far away from an accountant.
PS. A better example would have been Tyrion, who is lauded for his ability to manage finances, who is reluctant to fight and who is not conventionally good looking.
PS2. Note that I didn’t claim that drug dealers always or very often sleep with their customers, I just imagined one reason why they may be more likely to do so.
@Aapje, Though that’s one of the many things I’m annoyed at the TV series for; book Tyrion is basically hideous, which Peter Dinklage obviously isn’t.
wow… I mean wow.
It’s like when people turn up with a version of utilitarianism that tries to maximize for pints of orphan blood offered to the chaos gods.
You genuinely seem to get pleasure at the thought of other people being humiliated and advocate for making crap jobs even worse for the sake of maximizing suffering.
Sure, some people are happy to just subsist, most of the people who would want to do that already do under the current system so it doesn’t change much.
As for those on the margins, they’re probably not generating much for the economy in whatever just-barely-not-worth-automating job they already have if their goal is to just barely get by on the minimum.
Just as the economy of the UK didn’t suffer for the loss of toshers when people started taking care of orphan kids rather than leaving them to die most of the people you lose to sitting on their ass aren’t going to be people who were generating much wealth/revenue/tax anyway.
On the other hand I can think of a hell of a lot of talented engineers and programmers who would be vastly more willing to take the plunge of founding their own company if they didn’t have to worry about subsistence.
I probably shouldn’t respond to a “wow, just wow” comment but here goes:
Our country enjoys the most material abundance of any nation in the whole history of the human race. The amount of food, fuel, and manufactured goods sitting in warehouses across America today is more than past societies could even dream of. There are mountains of grain and rivers of oil; absolutely incomprehensible wealth in tangible form.
If we stopped producing those things tomorrow and tried to live off that enormous abundance, we might make it a month before the country collapsed into starvation and rioting. Probably closer to a week if we’re being realistic.
The abundance that we enjoy depends on vast armies of workers and an officer corp of investors busting their asses day in and day out to provide it. If they stopped, even for a moment, all of that accumulated wealth would evaporate like morning dew.
It’s not cruelty to safeguard the greatest accomplishment in the history of the human race and it’s not generosity to destroy it. Screwing around with the incentives that keep our economic system running is just about the dumbest and craziest thing you could do.
“Screwing around with the incentives that keep our economic system running is just about the dumbest and craziest thing you could do.”
Yet you advocate screwing around with the incentive systems that keep our economic system running as it is currently in order to make it crueler and to induce more suffering.
You want to screw with the finely balanced system… but you think your changes are safe? yet others proposals for alternative changes that don’t explicitly aim to maximize how “humiliating and unpleasant” peoples lives are aren’t acceptable?
There’s more than one way for a system to fail. Sometimes people intent on maximizing how humiliating and unpleasant life should be for anyone they see as lower class or below them…. cause the systems to fail catastrophically in other ways.
Succeeding is hard, causing the system to collapse is comparatively easy.
As such it makes complete sense to be conservative, to test, to experiment on small scales, to gather data to see what the real world results are likely to be. But it doesn’t justify abject opposition to all change. enforced stasis can also kill a system in a dynamic world.
You’re half right.
My preferred solution is to roll some previous changes to the incentive structure that “we” made over the last century. That’s probably disruptive but the end-state is familiar: we know what America without a welfare state looks like, because we’ve been there already.
The next best option to dismantling the welfare state would be to disincentivize welfare. It’s a new approach but still not uncharted territory: we know what welfare with more stigma looks like, because welfare used to carry a much greater stigma.
@ Nabil
“It’s not cruelty to safeguard the greatest accomplishment in the history of the human race and it’s not generosity to destroy it. Screwing around with the incentives that keep our economic system running is just about the dumbest and craziest thing you could do.”
Best paragraph so far in this debate.
“we know what America without a welfare state looks like, because we’ve been there already. ”
We know what america without a welfare state before ubiquitous communication looks like.
By that approach Vietnam should have worked out just fine because they knew what the response to war casualties was like before the era of ubiquitous communication…. unfortunately it didn’t work out like you might hope.
The world is not static. Assume that 18th century policies are safe because they worked in the 18th century and you’re as likely to burn everything to the ground. We know what america with >25% infant mortality looks like but if you tried to withdraw all healthcare from the poor on the basis that “they coped with it last time” the most likely outcome is them putting you up against the wall first for murdering their children.
Your approach is not remotely safe and so it’s notable that you’re apparently only willing to risk the system when it gives a chance to screw over people who you see as beneath you.
Can we get universal food stamps first? I have some poor friends who tried to get on food stamps and it was super difficult.
As a first step, can we give everyone $100 per person per month to spend on food?
There are societies where entire populations have been unconditionally emancipated from the necessity of labor. I have seldom heard basic income advocates talk about these precedents, probably because these experiments do nothing to justify their optimism.
The Republic of Nauru has an unemployment rate of 90%. Its people do not work because their incomes are publicly subsidized, mostly by the exploitation of their island’s phosphate deposits, an industry which once provided them with the highest incomes per capita in the world. These people who once lived on a diet of coconut and fish used their sudden influx of wealth to import all the worst excesses of civilization, leaving them with the highest obesity and diabetes rates in the world and a life expectancy of 59.7 years. They’ve nearly exhausted their sources of phosphate, completely destroying the natural beauty of their island in the process, and the people are now physiologically incapable of any existence other than idleness.
We might also look to the banlieues of France, where the youth unemployment rate is over forty percent and the underclass survives, illicit economic activities aside, at the expense of the generous French welfare state. Is there any evidence at all these beneficiaries are grateful to have been freed from drudgery? If anything, their lack of economic stake only seems to aggravate their resentment against a society that is keeping them humiliatingly idle. As recent events remind us, men hate being made to feel superfluous. Nor does there any appear to be evidence that their idleness has enabled the Byrons, Churchills, Von Brauns, et al. among them to improve the world with their genius. They are quite capable of setting cars on fire, though.
There are no doubt people, like yourself, who are natural aristocrats, who are very good at finding discipline, purpose, etc. even when freed from the pressures of necessity and would benefit from a stipend. But it is solipsistic to assume that most, or even many, humans can operate functionally when made entirely independent of the disciplinary pressure of having to earn your fill. Posthuman biotrash is a big enough problem already, and basic income can only make it worse.
Yes, this exactly.
Nauru’s problems arose because it was relying on the limited resource of phosphate, which ran out. Norway also gets enough oil and sovereign wealth fund revenue not to have to work and they are doing fine.
That assumes their “problems” are limited to the UBI running out. In my opinion, their problems also include “highest obesity and diabetes rates in the world and a life expectancy of 59.7 years” and “completely destroying the natural beauty of their island”; and those were present before the phosphates and phosphate-funded UBI came close to running out.
Norway is a highly functional capitalist economy first and foremost. That, and not oil is the primary reason they’re rich. And then, on top of that they also have oil, which makes them wealthier than comparable European countries. If all the Norwegian oil deposits magically vanished tomorrow, they would still be a fairly prosperous country.
I agree that this is the likely outcome of widescale UBI, along with tens of millions of immigrants coming in each decade in part to get their piece of others’ productivity.
This thing will lead to a death spiral. Why bother getting educated? Why bother behaving in school? Why bother focusing on a productive field of higher ed? Why bother looking for a job? Why put up with any disrespect from boss or customers? Why do I need to have sex with committed husband material men? Why avoid having a kid, when he comes with a guaranteed check? Why not have a drink and a toke at 11 AM? Why bother to relocate to where the jobs are? Why not organize and demand higher UBI next year? Why not write blog posts on what scum higher income people are and how they get it unfairly (we can call them the privileged or the 1%)?
The problems with current society are in large part that our safety nets have already become incentive systems to derail productive culture among the less intelligent, less patient and more impulsive parts of society. This will multiply the problems by an order of magnitude and within a generation or two lead to the collapse of any society rash enough to adopt it.
Instead, I would suggest experimenting with a decentralized Uber type of guaranteed income via subsidized jobs. Here is Warstler’s brilliant write up on it.
https://medium.com/@morganwarstler/guaranteed-income-choose-your-boss-1d068ac5a205
Could this work? Who knows. Try it in a state or two and see. Learn and adapt over time or throw it out if it fails or has adverse unintended consequences. But it seems to move in the right direction by reversing our current incentives for parasitism and bad behavior.
Features not bugs.
Without the surplus value produced by fathers, you don’t have civilization.
Disincentivizing fatherhood and thus civilization sounds like a bug to me, although I suppose that might be a feature to some.
Except there are plenty of men without wives or children who are still productive members of society, to say nothing of all the value produced by women (yes, we can contribute to society too, and not just by being mothers and housewives). It’s not like a large percentage of people are just going to drop out of the workforce because they’re single.
Of course, we need some people to have children just to maintain the population, but underpopulation isn’t really a serious threat right now outside of a select few nations. On the global scale, overpopulation actually seems more likely to cause problems. On a national level, as long as people are having enough children to sustain the country’s non-elderly adult population above the point of infrastructural collapse – which isn’t really a concern anywhere in the developed world other than Japan – things should be fine.
The key word in my claim was “surplus”. Cf. fatherless societies/subcultures (e.g. underclass America).
There are significant differences in productivity between fathers (and those who aspire to wives and children) and other men. Note the increasing number of men who have given up on marriage and instead produce the minimum necessary to provide for basic survival, weed, and porn.
If if there were no returns to career choices in the marriage market, men would tend to work less, study less, and choose blue‐collar jobs over white‐collar jobs.
People and societies are not fungible. A decline in the number of productive people and the size of productive societies cannot be mitigated by an increase in the number of unproductive people and the size of unproductive societies.
You’re acting like ‘productive people’ and ‘unproductive people’ are two entirely different breeds of human, as if unproductive people can never become productive and furthermore are destined to have children who can never be productive. The real world doesn’t work like that, though.
I was extremely lazy for most of my early adulthood, but I learned the value of hard work later in life. I know plenty of other people who had similar experiences. Human behavioral patterns aren’t set in stone, people frequently change over time. As for the hereditary argument, imagine the following people: The first person had lazy parents and grew up poor as a result, but she resolved not to make the same mistakes as her parents and has a burning desire to do whatever it takes (within the bounds of the law) to claw her way out of poverty. The second person had workaholic parents who each made six-figure salaries and provided her with a comfortable upper middle class lifestyle, but they never taught her the value of hard work and now she just wants to spend all of her time going shopping and taking vacations with the money she inherited. Which of the two do you think will end up being a more productive member of society?
Just out of curiosity, are there any similar studies focused on women? How does the promise of marriage affect women’s career choices and work ethic? Maybe the effect is the same, or maybe there’s no effect on the opposite sex at all, but I could also see the effect being reversed for women: If sex and marriage are becoming increasingly divorced from career and socioeconomic status, that may correlate to women being increasingly more likely to take control of their own financial situation by working harder and taking jobs in higher-paying fields (either because the former effect is causing the latter, the latter effect is causing the former, or both effects are increasing each other’s impact in a feedback loop). If so, the same factors causing a decrease in men’s productivity may be offset by a much greater increase in women’s productivity.
I don’t know what counts as a serious threat, but as of 2015 all EU countries had sub-replacement fertiity, and about half the world’s population is in countries with fertility below replacement.
(Wiki)
I’m talking about productivity over a person’s lifetime. It is well-established that this is strongly correlated with IQ, which has a strong biological component. It is also well-established that there are major lifetime productivity differences between males who marry and have children over the course of their lives, and males who never marry.
It’s certainly not a binary state, but the point is that we can clearly identify that it is the fathers who produce the surplus value that create and maintain civilizations. Again, please refer to historical and present fatherless societies/subcultures and notice the prevalence of mud huts and/or dependency on actual civilizations.
Women as a group do not produce surplus value (and this is effect is magnified rather than reduced in egalitarian societies like Sweden), so this is moot. Even if they did, it would have no logical bearing on my claim that you need the surplus values produced by fathers to get civilization.
Women comprise 40-50% of the workforce in most developed countries (47% here in the U.S.), so I don’t know how you can make that claim. Maybe you’re assuming that the types of jobs women tend to have generally produce less value than the types of jobs men tend to have, but even so, women would still be producing surplus value as a group, just to a lesser extent. (As a general rule of economics, all workers produce surplus value; the entire concept of surplus value is based around the fact that workers produce goods and/or provide services of a value exceeding their wage, thus making it economically profitable for their employers to hire them.)
Your claim about fathers being necessary to produce surplus value seems unsubstantiated and borderline incoherent to me. You haven’t provided much in the way of evidence or solid arguments for it, just allusions to vague intuitions that I apparently don’t share. Maybe there’s some inferential distance here, or maybe we’re defining terms like ‘surplus value’ in different ways, but I am seriously having trouble understanding exactly what you’re proposing in causal terms.
@LadyJane
I think that he misunderstands ‘surplus value’ and that what he’s referring to is that women pay less than ~50% of taxes and get more than ~50% of government spending.
We see that even the women that aim for a top career tend to drop out when they get children. A few don’t and persevere, but it’s a fraction of the men that do.
It’s not really surprising either, because ironically, the inability to see the downsides of the male gender role leads to women being lied to about the upsides and downsides of mimicking high achieving men. Most women seem to figure this out and recognize that women get fewer benefits from choosing this path than men get (and even for them, the benefits are deteriorating for high achieving).
@Aapje: That’s a very good reason to make high-achievement careers as rewarding for women as they are for men (at least if you’re optimizing society for economic productivity). Perhaps women would still choose to pursue high-achievement careers less than men do, for various social and psychological reasons, but the difference wouldn’t be as large as it is now.
@LadyJane
Increasing the rewards for women to that level seems nigh impossible, because high-achievement careers are more rewarding to men because of the gender roles. So you can’t move women up to the same level as men by getting rid of their gender roles, but you actually have to greatly overshoot to come up with some form of (oppressive) gender roles that reward both men and women equally for working 60 hours a week. This seems difficult, also because men and women seem to have different needs on average. So you’d need disparate gender roles that are designed around high productivity and where each gender rewards the other for working many hours and never being home. It’s already pretty amazing that we managed to achieve this for men & most likely that was only possible because women’s gender roles were difeferent.
The other option is to make high-achievement careers less pleasing for men, which is what is already happening. Now, the logical risk is that if high salaries become less valuable to men, you have to give them (even) more money, to keep the job just as attractive. For example, you might see large salary gains for the 1% at the expense of the rest of society (wait a sec, that’s exactly what has been happening for the last few decades).
You’d then still have to combine that with the elimination of the relevant gender roles, which includes the higher value that men place on looks and the higher value that women place on status/income/etc. However, the only movement that is allowed to address the gender roles is mainly concerned with telling one gender that they are entitled to everything they want and that the other gender is entitled to nothing, which is not actually going to eliminate the gender roles (women are encouraged to preserve demands that are incompatible with gender equality and men are encouraged to reject the new gender roles that offer them inferiority and a lack of fulfillment of their desires).
@Aapje: I fully support the elimination of gender roles. It would benefit both men and women as groups, because it would reduce the constraints on their behavior and presentation, thus offering them more agency (though I’d imagine the benefits would be more prominent for women than men, and most prominent for people of either sex who are already unable or unwilling to conform to gender norms). It would also benefit society as a whole, because it would result in a larger number of people joining the workforce and pursuing high-achievement careers, thus increasing overall global productivity. You wouldn’t need to create a new set of oppressive gender norms to keep men and women striving for success, you’d just need to eliminate the existing gender norms that actively discourage women from devoting themselves to their careers. Even if the lack of gender roles resulted in somewhat fewer men choosing high-achievement lifestyles, I think the increase in women choosing them would more than make up for the difference.
I’m not saying there wouldn’t be any drawbacks (it would probably lead to social strife in the short term, and it may result in people being generally less satisfied with particular aspects of their lives, even as their overall quality of life improves), but the benefits would massively outweigh them. I also wonder if perhaps we’re optimizing for different values here: I’m optimizing for economic and technological growth and the corresponding increases in standards of living and material quality of life (which I believe gender egalitarianism will indirectly contribute towards), as well as increasing people’s agency on an individual level (which gender egalitarianism will directly cause), whereas other people might optimize for the preservation of traditional social structures or some other abstract values that I’m not particularly concerned with.
@Lady Jane:
What does “eliminating gender roles” mean? If you mean “make it legal for men to do anything it is legal for women to do and vice versa,” that’s pretty much the case already, with a few exceptions such as not registering for selective service.
Does it mean eliminating the belief that some activities are generally better suited to men and some to women? The pattern of most people admiring men for some sorts of achievements and women for others?
@LadyJane
My mistake, I did not realize that “surplus value” was a Marxist term of art. Accordingly, I would like to reword my argument for maximum clarity:
Without fathers producing more than what they personally need and sharing this excess with others (particularly their children), you don’t have civilization.
All workers produce more than they personally need and share that excess with others through trade and commerce, that’s the entire point of capitalism. A worker who failed to produce more than her employer was paying her would be fired, and for good reason; a company that consistently employed workers who failed to produce more than they were being paid would quickly go out of business. Even a self-employed worker still needs to produce enough to sell others; if she only produced enough for her personal use, she’d quickly find herself without the resources necessary for her craft. Subsistence farming is an exception, but there’s a reason that the life of a subsistence farmer is generally one of extreme poverty, and “gender equality will cause everyone to become subsistence farmers” does not seem like a particularly likely outcome.
I don’t mean to sound condescending, but I feel like I’m repeating myself and I’m not sure what else to say. I think it might be best for us to end this conversation here, as it seems to be well past the point of producing diminishing returns.
It means not holding men and women to different standards, and not having different expectations for people or making assumptions about them based on their sex and/or gender (at least, not beyond the most visibly obvious biological differences, like ‘men tend to be taller’ or ‘women tend to have higher voices’). Of course, I’m not saying that there should be any kind of top-down decree to bring about this change, as that would probably be ineffective at best and counter-productive at worst. I’m aware that such a massive sociocultural change will probably take several generations (though various technological developments might speed the process along). But I also think that the process is already underway due to a confluence of political and social and economic and technological factors, so more than anything else, it’s really a matter of accepting the changes in progress rather than actively resisting them.
They produce more of the particular good or service they are producing than they need–indeed in some cases they consume none of it. But they don’t produce more value than they consume–it’s just that most of the value they produce is converted by trade into other things they want and consumed.
Defining how much a worker produces is tricky, because the worker isn’t producing it all by himself–he is using capital goods, machinery, produced and owned by someone else, the services of other members of the firm, the building he is working in, …
The usual economic approach is to define what he produces by his marginal product–how much more is produced than if there was one fewer worker, all else the same.
Thanks. I thought that might be the sort of thing you meant.
Are you assuming that there are no important differences in the distribution of traits, other than the obvious biological ones, between men and women? That seems unlikely. Darwinian evolution implies that we are “as if designed” for reproductive success. Males and females differ precisely in their role in reproduction. So it seems unlikely, although not impossible, that the distribution of abilities and behavioral traits that is reproductively optimal for one gender is the same as for the other.
Is your position that knowing someone’s gender gives you no useful information about characteristics other than the obviously biological? Or is it your position that it does give such information but one ought to ignore it, since taking that information into account means having different expectations?
For most relevant characteristics, gender provides information well short of certainty–the distributions overlap. It’s at least claimed that men are, on average, better at map reading type tasks. I am bad enough at those so that my first WoW character used to warn people in groups he was a part of that he could get lost on a tabletop. My wife used to make her living doing three dimensional mapping for an oil company.
But then, men on average are taller then women, but my daughter in law is quite a bit taller than either me or her husband.
Is your opinion only that the differing expectations ought not to be held with certainty–that the fact that a particular woman is very good at some ability that men on average are better at, or vice versa for a particular man, should outweigh your initial expectation? I agree with that. That is the general rule for decisions with imperfect information–you modify your priors on the basis of additional information.
@LadyJane
To be truly high achieving, you don’t merely have to put a lot of effort into your career, but you have to make your life about your career. The evidence suggests that women are far less likely to want such a one-sided life. In general, we see that in more egalitarian countries, men and women actually seem to be more disparate in their personality. Furthermore, Sweden has a gendered wage gap that is about the OECD average.
So I don’t see how you can be confident that eliminating gender roles will necessarily work. The current evidence suggests that it doesn’t.
Not if the incentives for truly high-achievement careers go down so that fewer women join that club than the number of men who opt out of it.
It seems to me that right now, men get an extra return on having a truly high-achievement career due to the gender roles, while women get the opposite. So let’s say that the formula for men is Rm = 1.2 * Bhac and for women it is Rw = 0.8 * Bhac.
Here R = rewards & Bhac is the gender neutral benefits of having a high-achievement career (hac). If you eliminate gender roles so that everyone’s modifier is 1, the maximum reward level went down. Given that we are looking at outliers, not the average worker, this can mean that some jobs that were pretty much only attractive to men due to their gender roles bonus, become unattrative to everyone.
Do high-achievement careers actually improve quality of life? Self-reported happiness seems to follow a U-shape as people age, where the young and retired are happier than those in the peak of their career.
Not necessarily. You can have agency-limiting, gender-neutral norms.
What if many people are not very materialistic and value those abstract values higher than extra income? Globalist multiculturalism vs localist uniculturalism is one of the major culture war divisions of our time.
Are you sure that your politics are actually about human happiness in general or it is about what makes you personally happy?
Note that I’m in favor of reducing the gender norms. I just have low confidence that it will result in the level of gender equality of outcome that is generally expected, by those who favor the same.
@LadyJane
I’m not talking about indirectly sharing productivity by adding supply and demand to the market. I’m talking about directly gifting productivity to one’s family (plus potential mates) and, through taxes, the rest of society.
Fathers are net contributors in that sense. Women and never married men are not.
As far as I can tell, the fundamental roadblock here is that you hold a priori egalitarian assumptions that prevent you from examining the significant differences between demographic groups.
Unless you are willing to challenge those assumptions by looking at the data, then I agree that we will not make any progress here.
Because people don’t like being poor, same as today. UBI + no job = poverty. People don’t like being poor, even when (as has been the case here for the past hundred years and will be for the next hundred) being poor means approximately zero chance of starving to death or the like. Most people seem to dislike being poor, enough that they are willing to go get jobs to stop being poor.
UBI + job = not poverty, and UBI eliminates some of the most serious obstacles that currently prevent poor unemployed people from getting jobs.
Some people will settle for poverty if it means being able to lay about playing video games all day. Those people already can and do, and we’re not really going to stop them. We can make them lie about being disabled, if you really insist.
> Because people don’t like being poor, same as today. UBI + no job = poverty.
This discussion really really needs to stop using the same word for two completely different things.
Poverty-UBI, aka alt-welfare, has more or less zero properties in common with post-scarcity-UBI. Consequently, every argument for or against either can be trivially countered by silently switching to the other meaning of the word.
Which is why, despite my tentative support for UBI, I felt incredibly uncomfortable reading Scott’s talk of “utopia” and his arguments about how great not working is. Hell, he inadvertently provided a great argument against UBI by talking about how he’d feel inclined to quit his job if he could live comfortably without it, despite the fact that it’s his dream job; any system that would disincentivize intelligent and trained professionals like Scott from using their skills to contribute to society is not a system worth supporting.
If UBI is set high enough that a large percentage of the population will be inclined to drop out of the workforce, then that means it’s been set far too high. The point of UBI in a non-post-scarcity civilization like ours should be to prevent the unemployed from starving/freezing to death or otherwise suffering unbearable conditions; it absolutely should not be enough to enable them to live comfortably and travel the globe without a care in the world.
Until we achieve a fully-automated post-scarcity civilization (or at the very least, a mostly-automated low-scarcity civilization), I’m going to remain strongly opposed to utopian versions of UBI, despite my belief that a more restrained form of UBI is not only desirable but necessary for the long-term survival of late capitalism.
“They’ve nearly exhausted their sources of phosphate, completely destroying the natural beauty of their island in the process, but the people are now physiologically incapable of any existence other than idleness.”
Fat people, even fat people with diabetes, can and do work.
I misread this as “psychologically,” which sounds much more plausible.
Regardless, the rest of Yakimi’s post stands, as a very strong argument against UBI. It was tried, and it failed. Proponents must now argue in detail how that was an unfair test and how the distinguishing features between Nauru and the US will necessarily lead to a different result.
(Which is IMO plausible! But it must be proven, or the US economy is at risk!)
This time will be different.
“humiliatingly idle”
The argument is that these two things need not be inextricably linked.
I think it is linked for the vast majority of people. A small minority of natural aristocrats can avoid having both. Most can’t.
Is this an inevitable outcome of biology, or an enforced standard of our current social system?
I think it’s largely biology, because our social system, for all its faults, still discourages idleness. I don’t think the Nauruans (Naurites? Naurinese?) are special in their response to being given free money (when such money doesn’t cause massive inflation, via connection to the outside world). I may be wrong, but I think if you implemented the Nauru plan in any European country, you would get much the same results.
You really think a significant fraction of the American population will just quit working to live off $10k a year?
What do you think urban gang members do? Well, aside from “crime” and “mooching off their baby-mommas”. AFAICT, “not a lot”.
Thank you for a thoughtful and well-argued post. I don’t have much to add, other than to emphasize that yes, living is much cheaper when you aren’t in a major city in California.
Wouldn’t a UBI cause prices of many things to rise the point where similar incentives for work get created as existed before the UBI? It’s not like you just magically have the same goods and services springing into existence.
Adding this comment here, although it applies to a lot of the conversations here:
The economic right likes to pretend the distribution problem is solved. The economic left likes to pretend the production problem is solved. A UBI helps alleviate the distribution issue at minimum penalty to production; relative well-being so important, the incentive to work will be as strong as ever.
A major part of the problem with modern society is that there isn’t an economic incentive to cater to the cashless, the perpetually broke, the homeless; this is a service we want performed, but the system cannot enable it, and the system limps on.
A UBI creates such an incentive. In the short-term, we will have some shortages and price increases; in the long term, we will have a new consumer base, and new industry will arrise to support it.
Inflation is one possible result, and likely unless we make it economic to build such industry. A UBI needs a corresponding decrease in regulation, in order to make it possible to produce low-cost goods for that new money to chase.
And responding to completely different comments: if a state or city wants a higher UBI, so be it. But a major advantage that the UBI offers is to incitivize people to spread out more evenly across the US, reducing population density. Likewise, a major problem with current welfare is that it disincentivizes work, by punishing those who get it (as working costs benefits, resulting in less overall available funds). I don’t think we will have a rising class of jobless vagabonds; I think instead we will have a rising class of gig-economy people, who take short-term work to get money to buy luxuries, while they mostly skate by on the UBI. This is where we are heading anyways, so this is a net improvement, by making such gig work more secure.
I see little harm and much good in a UBI, and expect it to accelerate employment relative to the current system of “You only get your benefits if you don’t work and avoid making yourself too employable”.
The point of an UBI is you’re providing people with support with the minimum distortion of their incentive to work possible. Most people would continue to work, because there’s still a big difference between your $10k UBI and $10k UBI + $15k full-time minimum wage job. What the UBI provides is a stable minimum level of support.
As long as you tax sufficiently to cover the UBI, you’re not going to raise the amount of goods that all of society consumes. You’re redistributing money from the wealthy (or high income) to the low. Possibly you’d locally raise some prices in currently economically depressed areas, but that would also create incentives to open new businesses there increasing employment.
because there’s still a big difference between your $10k UBI and $10k UBI + $15k full-time minimum wage job.
Did you read Scott’s post?
Thanks for the condescending comment. Yes, I did. Do you know how an UBI works? Clearly not.
Do you know how an UBI works? Clearly not.
I was advocating for the UBI *checks calendar* 20 years ago. I had never been challenged seriously on it. It’s one of the foibles of my youth.
I don’t understand what point you’re making here. I read Scott’s post, and I think what DocKaon said makes sense. What am I missing?
Scott goes into detail about how much having a job sucks. 10K to do nothing is a no-brainer compared to 25K for having to maintain a life where you go to work from 9-to-5, pay for a car, shower, have to eat a lunch, deal with bosses and annoying customers.
Not to mention the taxes. Who knows how much of that 15K is being eaten by the new taxes to pay for the UBI. The proponents won’t give numbers, because they don’t want to specify whose pooch is going to get screwed. Maybe the EITC is going away to pay for all this.
I know some people’s first job is making six figures, but that’s unusual. Normal people start out with below-average jobs and earn more as their careers progress.
Maybe I’m wrong, and we are delaying utopia by a few years. But if you’re wrong, you’re catastrophically wrong. If it turns out in ten years that too many people stayed home and the program is unsustainable, you aren’t going to get them to start work in their mid 30s. Scott warns against BJ hijacking utopia but BI has the same risks.
@Edward Scizorhands
I agree that that’s an issue. But isn’t part of the point of a UBI that you don’t have to choose between $10k + doing nothing vs. $25k + doing a grim job with lots of expenses? You can instead go for maybe $15k + doing a part-time job that you find enjoyable and low-stress. Or, if we’re being optimistic*, perhaps you’ll even have the option of getting $25k and doing a job that is actually quite satisfying and pleasant, because all the shit employers have run out of employees and UBI has increased the demand for employees, forcing employers across the board to up their game.
Also, remember that all the high-paying jobs that need people with experience and proven conscientiousness will be looking to hire people who have been working, not sitting around. Getting a job that pays $15k in a UBI world could still be a wise career move if you would like to end up being one of the few rich people.
I completely agree with you about the catastrophic failure mode. I think Scott is too optimistic about this. I think our only hope is that some braver, smaller and better-run country (probably in Scandinavia) will implement UBI and the rest of the world can use them as a case study.
*fair enough, you’re not, but humour me
>$15k + doing a part-time job that you find enjoyable and low-stress.
You’re assuming that there’s a part-time job I’d be willing to, is low-stress and pays enough for me to want to. Such jobs will probably end up like gold-dust in a UBI scenario. Plus why would I work for an extra $5k and a little stress when I could *not* work for $10k and *no* stress?
But if 90% of people feel like quitting their job and relying on the UBI, then workers will also end up like gold dust, won’t they?
I mean, there’ll still be a market. Won’t this just create intense competition between employers, thereby making workplaces as a whole much more pleasant/low stress/well paid/whatever else workers turn out to like?
Getting a job that pays $15k in a UBI world could still be a wise career move
It would be a good career move. Now, how good are people at deferring gratification? Don’t think of yourself. Think of the bottom 50%. Tell them “give up an easy if low-status life, work hard while your friends laugh at you, and in 10 years, you could be part of the group that has 50% of your pay taxed to support your friends.”
One reason I prefer wage subsidy is because, while it doesn’t solve every problem, it partially solves problems while not making new ones. It increases the number of employers. We have a robust job market where people are hired by private companies, by charities, by local governments. If the government paid $2 to anyone hired for $7 an hour, while it’s true that existing employers would enjoy some windfall as their costs decrease, it opens up a lot more employment opportunities, which improves the quality of jobs people can get. (And if it turns out to be wrong, people are still used to going to work.)
Except that funding the UBI requires a large increase in tax rates, which distorts everybody’s incentive to work.
In addition, funding the UBI with a progressive income tax on the wealthy effectively redistributes resources from investment (what the wealthy tend to do with their “extra” wealth beyond what they can consume) to consumption by the UBI recipients. Part of that’s the point of the idea, of course.
Moving 10-20% (or whatever number you come up with for UBI funding) of the economy from investment to consumption is likely to have a significantly negative affect on future wealth overall as compared to the alternative. Meaning it’s going to be self-limiting to a certain extent, but by the time we hit that point we’ll have lost a lot of potential wealth over the years. See also grasshopper vs. ant, but on a national level.
(Yes, a portion of that consumption is paid to someone else who will end up investing it, but most consumption still “consumes” resources compared to investing them.)
>”The point of an UBI is you’re providing people with support with the minimum distortion of their incentive to work possible”
That doesn’t fit the picture Scott paints, where masses of people walk away from their soul-sucking jobs and get the choice of a life of leisure.
My question above was more asking about the inflation angle though, but I guess the UBI must be tied to an inflation index so that’s perhaps not so relevant as it seemed last night.
I’m no economist but it seems to me that this essay under-plays what I thought would have been one of the main features of a job requirement over a free-floating income. For the moment put aside complications like disability and third-party effects and just imagine the core case of a person with no job. Jobs suck, as Scott notes toward the end. But it is in everyone’s interest if everyone who is able to support themselves with jobs do so rather than resorting to compulsory confiscation of others’ money to do so. So we want obtaining such government money to be unpleasant. This isn’t to say that most people on government programs are just lazy. But people do respond to incentives, and there are probably lots of marginal cases where it would be extra hard to support oneself with a job, and an easy, frictionless transition to government support would be an easy call whereas a costly and painful one would end up causing this marginal person to choose to remain in private employment.
so what is the main obvious attractor of a government-granted income without a work obligation? I think it’s not having to have a job. So to a first order of approximation, adding a job requirement does exactly what you would want it to do. It removes the largest incentive to avail oneself of the government program, namely the removal of work obligations during work hours. We want to do this not out of a punitive motivation, or even out of a “help the recipient” motivation. We want it out of a deterrent motivation, precisely to deter availing oneself of redistributive programs that by their nature cannot work if too many people opt in. Is that not an important part of the argument here?
The point you lose me in your argument is when you seem to believe that unpleasantness is desirable. Everybody should be at least a little miserable! We can’t have people being happy when they can’t or won’t work or the system will fall apart!
People are envious. You don’t need to make not-working unpleasant; they will see their neighbor or friend with their fancy new phone and put in a few hours of work to buy their own. Right now a lot of this work happens under the table in cash transactions for fear of losing welfare/disability benefits; a UBI has the potential to enable people to work openly. And if they don’t work a 40 hour workday, well, that’s fine. It is long past time we started transitioning to a 20 hour workweek anyways; any sane company employs twice as many employees as it usually needs anyways, since it needs them available during spikes, and can’t afford to train people when a spike hits.
I appreciate the response, but just to be clear, I don’t in any way view the misery as a good thing in and of itself. I just think that it’s instrumentally necessary to make free money unpleasant to get in a world of finite resources. If I could get 50% of my current salary in exchange for not having to go to work and do my job then I would take that deal in a heartbeat, and I don’t even have a bad job. I kind of like my job! If I only qualified for menial, unpleasant work then I could only imagine the draw of an alternative arrangement where I could have total leisure would be incredible. I wish we were in a world of unlimited resources where we could all opt for such a life but obviously that world is not ours.
You wouldn’t be getting a 50% pay cut, but a 66% pay cut.
Let’s suppose you make 20k, and the UBI is 10k. Post-UBI, you now make 30k. Dropping your job reduces your income by 20k down to 10k.
And the life of leisure loses its appeal when your social group is all better off than you. Relative social status is important.
> And the life of leisure loses its appeal when your social group is all better off than you. Relative social status is important.
If such attitudes were to persist in a world with a meaningful UBI, that would be a fairly conclusive disproof of historical materialism.
More likely, it would suck to be the one person still stuck with a job when all your social circle had sufficient capital to support themselves on UBI. Imagine the week-long parties you would not get invited to, the potential partners who would dump you, the derision and scorn people passing you in the street would feel.
Which is why billionaires retire and throw parties all day, instead of competing for social status by demonstrating their charitability.
The game is still afoot, they just engage in a form of conspicuous consumption the lower classes can barely fathom.
If one half of Americans work, the average cost per worker of a $10K UBI would be $20k per worker. I assume this is going to be weighted heavily on the most productive members of society, but the pain will need to be shared by most if the math is to work at all.
Pre UBI you clear $20K after taxes. Post UBI you pay the need UBI tax (let’s say you only pay one half of your fair share at $10k). This means you make 20 minus 10 plus 10. Or $20K. You now quit and earn $10. This is still a 50% reduction. But, you gain 8 hours of freedom, lose commuting costs and can relocate out to the sticks and reduce living costs by 50%.
If you have a child, the math is 20 minus 10 plus 20, or $30k working. By quitting, you drop to $20k, or 2/3rds of your prior salary, but you also lose day care costs along with the above savings.
If you have two kids, the math is 20 minus 10 plus 30 or $40k. When you quit working (and you would be crazy not to) you would make $30k and are clearly better off than the working shmucks buying a new car and paying an urban mortgage.
This UBI idea is a giant incentive system to immigrate to the place which has it, not get educated, not work, and have lots of kids. What could go wrong?
I say we try it in Canada and then LOAO when it implodes.
Having taken several SSC surveys, I am now convinced that every instance of a double “the” is a test and it is our duty as readers to make a notification when we see one. For science and all.
“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.”
And I have never yet noticed one. Sometimes people quote the offending passage with “the the” in bold or italics and I still don’t notice it. (This didn’t happen with your comment because you put your explanation before your quote, but had you done it the other way around…)
“The part where you get money without working is the fun part of capitalism” is now one of my favorite slate star codex lines. It’s practically a non-sequitur unless you’ve done a lot of background research, which is what makes the line so damn fun.
Exactly. It is a novel way to think about things, but makes perfect sense. Income goes to labor or capital. If all income goes to labor like socialists want, then people who don’t labor have no income (unless they get charity from others or the government taxes others to pay them). The concept of getting money without working requires that some income go to capital. In an ideal world where human labor is no longer necessary, all income would go to capital, and the challenge would only be ensuring that capital is not too concentrated in a few hands.
You’re being unfairly rosy towards basic income by not mentioning that it too could destroy private industry. Imagine you institute basic income and most of the McDonalds workers quit. McDonalds tries to invent robots, but can’t because robots are hard. So they raise wages in order to attract more workers. In order to pay for their increased wages, they raise prices. The market informs McDonalds that people don’t want to pay more for their fast food, and McDonalds goes bankrupt because their business model was only profitable with $8/hour wages. Higher-end restaraunts will still exist, but your basic income scheme just destroyed the entire “cheap fast food” industry.
Is the “cheap fast food” industry essential in any way? It didn’t even exist 200 years ago, but people have been eating since there were people. People will continue to eat, so their purchasing power will go to other industries, those that are able to adapt to the new economic reality. As it has always been in history. Would you have opposed the automobile because it would all but destroy the horse and carriage industries? Computers because they destroy typewriters? The internet because paper encyclopedias?
Sure, McDonalds jobs are probably low in the list of “creates value for society”. Are you okay with half of the country’s nannies, home nurses and bus drivers retiring to coast on their UBI? Janitors? Construction workers? We have important industries where people earn minimum wage, and it’s disingenuous to ignore the lost productivity and disruption of industry a UBI could cause.
The extent to which UBI would disrupt the economy would probably depend on how quickly you introduce it. If you go 0-100 within a year, then sure, there will most likely be much bloodshed. If you introduce it gradually, let’s say within 10 to 20 years, the negative impact would be much less severe. In the end, the economy would adjust either way.
As for your specific examples: I don’t know about the US, but here in Germany you really have to love your job to become a worker in the health care industry. Unless you’re a private practice doctor, the pay is shit for the physically and emotionally draining work, long hours, and being treated by most employers like robots. Health care is basically a humanitarian catastrophe, unless you can afford horrendously expensive private care. Workers get lists that detail which patient gets which treatment according to a few rigid levels, giving almost no consideration for individual physical needs, and none at all for emotional needs, i.e. you don’t get the time to just sit down and talk with the people you care for, or do any fun activities together, which is especially important in retirement homes.
Instead, in the worst cases people vegetate in their own shit for hours because nobody has spare time to take care of them, because their schedules are timed down to the minute, because heaven forbid you hire additional staff that would lower your profits. It makes me mortally afraid to require this level of “care” when I’m old, and that’s in Germany, a country which one would think could afford to do better by their own people.
However, I believe that few people, if any, actually like the way things are. As Scott already wrote, many people would prefer to help their loved ones through sickness and old age rather than slave away at a job they hate. A UBI would be a subsidy for such people, greatly reducing the strain on the nation’s health care system, little of which can be automated. Not to mention that from a purely ethical standpoint, being taken care of by loved family or close friends is massively favourable over being cared for by strangers. As I said before, the fact that anyone wants to work in health care at all proves that the people who do actually love their job, and UBI would not change that in the slightest. I fully expect MORE people to work in health care with UBI than without.
UBI will be an incentive to automate jobs that are automatable, to dispose of jobs that are disposable, and to correct the pricing of jobs that are neither.
As far as I’m aware, construction workers make more than minimum wage. I’m fairly sure nannies and home nurses usually do as well. If I could survive on the income of driving a bus, it sounds like it could be fun to do on occasion, maybe a couple days a week. Janitor duties… well, you’ve got me there.
Here’s the thing though. Nannies and Home Nurses won’t be needed nearly as much if parents can take care of the kids and relatives can take care of sick people. Home nurses will still be needed for administering shots, but that’s a lot less onerous than having to bathe the patients.
Most truly important unpleasant jobs pay more than minimum wage. Thus, the people working them make more than they would on the UBI.
Home day care is already a thing, I predict with UBI you’d see a lot of stay-at-home parents earning a little extra cash by taking care of two or three children.
In that case, why don’t you already see that in the current system?
@Evan P
You do. It’s called home daycare.
@Enkidum, okay, TIL something of how many home daycares there are. I guess my social circles just don’t cover any of them.
Evan: strictly anecdata, but my wife and I used one for quite some time because the waiting lists on existing daycare options were so long. It’s certainly extremely common.
You’d still probably see even more, because “UBI+a little daycare cash on the side” looks better than “working a crap job not at home”, at a similar income.
So all those poor people with their fresh new UBI checks are going to decide that McDonalds food is now below their dignity? Because otherwise, it looks like their likely set of customers now has a lot more money in their pockets.
Maybe not, but if nobody’s working at McDonalds to make the food then there IS no McDonalds food to buy, dignity or no.
That’s perfectly circular logic. If there’s utility to working at McDonalds and utility to running a McDonalds, there’s almost certain to be a McDonalds. It’s not exactly a complicated or fraught business model.
Yeah, this is what I mean when I say that markets handle this kind of problem really well. If the cost of labor goes up and the income of people at the bottom goes up at the same time, markets are exactly the right tool to work out how much higher wages will need to be and how much prices will go up so that everything comes into balance.
We currently see McDonalds open in very high-cost/high-wage environments, so it seems very unlikely that they would go away in an UBI world. They’d charge more for their food (but not huge amounts more–David pointed out that labor costs are only about 20% of their costs), and they’d automate more, but almost certainly there would still be McDonalds and Walmarts and the rest.
The effect of UBI on the labor market seems likely to be rather like the effect of having a very tight job market–your prospective employees have a lot of appealing alternatives, so you will have to try to make your job more appealing by paying more or making conditions nicer or something.
Why the hell would that happen? Especially considering the rise in disposable income? The reason McDonalds doesn’t simply jack up its prices right now is that little thing called competitors. Who’d all be in the same boat!
What rise in disposable income? The UBI is being paid for either out of taxes or out of reductions in other programs.
If the effect of the UBI is that more people choose not to work–not necessarily the case, since it may be replacing other programs that have a larger effect in that direction–then total disposable income goes down, not up.
Correct. But the higher prices due to higher labor costs in a world where people are not on average richer and may be on average poorer result in fewer people buying from McDonalds.
Think about how much better open source software would be if all the people developing it didn’t also have day jobs (or worked far fewer hours)! Man, that would be amazing. I know a lot of it is developed by people working on it for pay, but think of the possibilities for all those side projects out there…
Open source is already viable, if more projects would switch to a Patreon-like model. But there seems to be an attitude around open source that the money is to be made in consulting, not improving the product, so improvements are to some extent disincentivized to the extent they render knowledge of the application obsolete.
This is a place where we really need to be careful about typical-minding. The average participant in this conversation might very well respond to suddenly receiving enough UBI to live comfortably on by spending all their time doing research and publishing papers, or learning a couple new languages, or contributing to open-source projects. But the average American citizen is not going to do that stuff, and certainly the average American citizen who now is on public assistance is not going to do that.
The average American wouldn’t, but open source software is currently made by atypical people, and those people would have more marginal time to work on the software. We already know these people work for free as their hobby, so it would be unsurprising if they did more of it given a basic income. And average people would benefit because they might be users of the software.
As has been pointed out elsewhere, open-source software is only “amazing” to open-source software hobbyists. To everyone else, it is either worthless junk or a tantalizingly frustrating annoyance, because the people who write it mostly just enjoy the parts where they make it work well enough for their own purposes and/or to earn the respect of their mostly-hobbyist peers. Developing proper user interfaces, meeting non-nerdish customer requirements, debugging, writing (ugh) documentation, these are things people don’t generally do for fun or self-actualization.
There is an interesting possibility in that the UBI might free up more people to write open-source software and the ability to seamlessly add paying “gig work” on top of the UBI might motivate them to properly clean it up for release. But insofar as the observed ration in the no-work-no-pay regime is that OS afficionados spend relatively too much time on the fun parts and not enough on the boringly necessary, I’m skeptical. If it works, it will be because of reduced barriers at the margin between work and play, not because of the raw economic input of the UBI.
Counterexamples: R and Python, both used to do serious work by a lot of people who aren’t open-source enthusiasts.
“Most of them will be in big cities, because that’s where everybody is. ”
Historically, the Works Progress Administration , which was basically a “basic jobs guarantee,” had most of its money end up rather rural. Cities might be where everybody is, but the countryside is where the ditches are.
The challenge with that model is that heavy construction equipment is just so much cheaper to use at scale. And if you have people who don’t have to worry about being fired, they can just take off their hardhat and drive the fear of an OSHA investigation into the few people who actually would be paid to be there.
Fantastic piece, but…
You mention a hypothetical person working two McJobs @ 50 hours per week to pay for their apartment and how with UBI they could work one McJob for 20 and still afford it. What makes you so sure that the price would stay the same? UBI would (as you rightly point out) be the largest government program in history. Won’t it have huge disruptive effects on prices (including housing and food prices)? This argument sounds like the (I’m too lazy to look up the actual name) “fixed exogenous conditions” fallacy.
Don’t get me wrong, I still think we should do this for reasons both humanitarian and practical (allows us to pivot to more comparatively advantaged sectors of the economy without worrying so much about who gets left behind). I just think you underestimate the impact such a policy would have.
I think he was guesstimating that a basic income at the value of 50 hours a week of Mcjob causes a price change that can be made up for with 20 hours a week of Mcjob
Jobs are important for (don’t have a link for this, it is from an introductory course in organisational psychology with offline resources only):
– money,
– social state,
– social contacts,
– sense of purpose*,
– growing as a person
* “sense of purpose” means doing something that is useful to other people, which is a need that humans as tribal social beings have.
Don’t be so quick to dismiss the “sense of purpose” aspect, organisational psychology isn’t the only source one can go to for this, but it has also been a core insight of socialism. This was an important aspect of e.g. the GDR, who implemented the right of a job for everybody, and criticism that unemployed people in the West are not only suffering materially, but also regarding the other aspects mentioned above, was ubiquitous at the time. And it became a reality for many after the wall fell, even though material living conditions even for unemployed quickly improved overall.
Also see Victor Frankl (https://en.wikipedia.org/wiki/Viktor_Frankl): His work with unemployed people during the great recession in Vienna during the 1930ies made him realize that for some people, at least, being useless was actually worse than being hungry (I think I got that from “Man’s Search for Meaning”).
I think one can and should accept this as an important aspect, and still reject the idea of basic jobs.
P.S.: Nit-pick: Warner von Braun should be Wernher von Braun (https://de.wikipedia.org/wiki/Wernher_von_Braun).
Not sure you can give socialism the credit for an idea that predates Marx by millenia and was addressed at some level by every major historical prophet. The idea that the sense of purpose can come from a job was a key insight of Enlightenment capitalism (this is a central point of McCloskey’s thesis, that the Great Enrichment was launched by the revolutionary idea that commerce and trade were noble pursuits). The idea that the sense of purpose can only come from a job is a peculiarity of late 20th/early 21st century capitalism, where decline in religion, community, and family has left employment as people’s primary source of purpose.
Basic jobs are still a terrible solution because they don’t provide meaning, any more than any other job where employees feel they contribute nothing valuable to society provides meaning. And there’s certainly no need to outsource the search for meaning to government. Radical libertarians are frequently mocked for believing that private charity can replace government, but if there’s one thing that private charities do way better than the government, it’s giving people a sense of purpose. I doubt there are a whole lot of churches or charities turning away volunteers.
Fair enough, let me clarify: I did not intend to give socialism credit for “discovering” or “inventing” the idea, but that real-life socialism in the GDR actually implemented it, and ran with it for decades.
So you now have a population of millions who have a decades long experience with that, and a decades long experience with capitalism, which one can analyze.
In short: Standards of living increased tremendously. Despite of that, there is a lot of resentment, and a lot of that stems from the impression of being “cast aside”, being useless and not feeling appreciated, which usually starts with losing the job once held in the GDR outright or after a steady decline over several years or decades.
So, here we have millions of people for whom the “soft” factors play a huge role in evaluating their personal history and living conditions and trump the material ones.
Nostalgia for the GDR is a real thing, which is truly impressive if you know how the living conditions in the GDR were in 1989 and how they are now.
Right, but this is the reality we have to deal with now.
Agreed (in case it needs to be said). I just don’t agree with dismissing the “purpose” factor as Scott does.
Not quite true for ever one and every job, if you ask people who actually work in such kind of a job (there are such government run programs in Europe which provide basic jobs to some unemployed, but not all).
That’s why traditionally there have been all kinds of service organizations, and why to this day there are otherwise employable people with college degrees working for slightly below minimum wage at internships and governmental volunteer programs because it’s significantly more meaningful than the McJobs. If the government brings back park work programs, even with a UBI they will probably find people willing to do it, because people like parks. You can get people to volunteer to cook for potlucks and ill people, and teach, and all sorts of things that are meaningful, as long as there’s someone to organize it.
One of our current cultural problems seems to be that organizing people to do meaningful activities has traditionally been done by religious organizations, and apparently in America small town organizations, of which there’s a lot less than there has been. But it doesn’t seem like there’s any reason there couldn’t be, if people had a bit more time and structure available.
Nobody’s stopping people from getting jobs. If people need the kind of meaning that comes from employment, they can bloody well get it. Since minimum wage isn’t needed, they can work for less doing things like maintaining parks or picking up litter or something, which is hardly worse than dogging ditches for no reason or being worked to death in a warehouse.
It’s about giving people the dignity to decide what work is meaningful to them, instead of saying ‘Here is a list of gov’t approved meaningful jobs’.
Just to be clear, I am against basic jobs, and also a UBI. I am just “steelmanning” some points people make and have been making for a “right to have a job”, because I think there is a lot more to it than Scott acknowledges in his post.
I don’t quite get that, what do you mean? We are talking about people who need a job with a salary to support themselves, right? People who don’t need that will probably not be interested in any basic jobs program anyway.
Yes, those are examples of what people in basic jobs programs in Germany did (I am referring to https://de.wikipedia.org/wiki/Arbeitsbeschaffungsma%C3%9Fnahme). But people still need to get payed, also the jobs were pretty clearly chosen so that they were useful for others.
Think of it this way: When people get rejected a lot, they get depressed, stay at home, try to accept that they will live on social security payments for the rest of their lives, sitting on a couch in a small apartment watching TV. Providing government funded jobs to them is a kind of behavior therapy with the intention to train them to enter the real jobs market at some later point.
It is an investment that may very well pay off, also monetarily.
> “So what if we accidentally fund farms?” asked Stalin, creating the kolkhozes.
That’s not very steel-manny! The point of something like Basic Jobs is that giving people the option, but not the obligation, may result in better outcomes for some people at the margins. It’s not a panacea, it is definitely not a Utopian alternative to the largely Utopian plans of UBI because I do not think any Utopian plan as described is wise. It’s a suggestion of mere incrementalism, something to try on top of the hodge-podge of welfare that currently exists. A splint is safer than a spleen removal, as they say.
In other words, I think you are committing a mistake by comparing your Utopian vision to another Utopian vision (which I do not advocate). I do not think any Utopian vision is good or possible. You can make UBI look better by comparing it to other Utopian ideas, but this is in effect masking the deficiencies of UBI by comparing it to something else unrealistic.
I do not want to give the impression that Basic Jobs would ever accommodate everyone as UBI may intend to do. In the best case I 100% agree its positive effects would be smaller, but its implementation would also be safer. If you have a hard time imagining that, simply imagine “Maybe we should have farm subsidies, but they work more like Japan’s or Austria’s than what the US does right now.”
I’m a little sad you called my Guaranteed Minimum Agriculture piece excellent, I think it’s quite poor. What I do think is better, because it relies on less speculation of alternatives, is my larger panning of UBI: https://medium.com/@simon.sarris/after-universal-basic-income-the-flood-217db9889c07
I would much prefer a point-by-point objection to that.
Thanks for the response – I’ve included a link to it in the main post.
I agree your other UBI post was more interesting, but given all the interest in basic jobs right now I thought it was important to highlight my differences with that camp, and yours was the best article I could find. You’re right, maybe I should write something on the flood article too.
“The point of something like Basic Jobs is that giving people the option, but not the obligation…”
I don’t get this phrasing. Basic Jobs will force some number who currently do not work but get benefits to start working (whether they are willing / capable to do something useful or not). They are obligated to work, unless they want to starve. Of course we won’t be actually willing to let them starve, so we’ll have the obligation to give them makework jobs. Or to continue the current disability system with all its attendant bureaucratic nightmares.
My objection comes down to this:
The assumption that UBI is a solution to poverty, rather than a solution to the systemic issues inherent in a bureaucracy-administrated welfare.
This puts me at odds with Scott, who seems to favor a high UBI intended to make work obsolete for most people. I favor a low UBI which makes the bureaucracy obsolete, but isn’t intended to pull people out of poverty. My preferred solution is a debit card (or maybe just a fingerprint-enabled system to disable theft) linked to an account with daily accrual of small amounts of money; 10-18 dollars per day per adult, some possibly smaller amount for children. Do away with disability and food stamps and housing assistance and social security, keep Medicaid/Medicare. Pair this with a new classification of minimal legal rental housing that amounts to an updated-fire-code-compliant barracks (a bunk, a locker or chest, and access to a bathroom and washing facilities, probably gender-segregated; family-style housing might amount to a lockable room). Toss in density maximums on the barracks, and proximity limitations, to avoid concentrating poverty. Maybe – maybe – add in a requirement for security guards.
The goal shouldn’t be to enable a luxurious life – it should be to enable a very basic one. With daily accrual of funds, huxters and con artist won’t find viable targets, and anything more expensive than a daily meal will encourage short-term thrift and the accrual of some very basic financial knowledge.
This is a more basic lifestyle than is afforded by the current system, but removes the barriers to entry and waiting lists that plague us now. I think the “lower middle class” version of UBI is a terrible idea; it should be treated as a safety net, not a replacement for productive enterprise.
This is the incrementalist version of a UBI. Trial it, adjust as necessary.
Agreed. In my discussion with David Friedman below, I came up with $3,500/year as a figure would allow people to live a “minimally decent” lifestyle in most parts of the country (i.e. enable them to afford enough food to avoid nutritional deficiencies and an apartment with indoor plumbing, heating, and electricity), which almost perfectly matches the $10/day figure you mentioned. If you wanted people to be able to hold down a job or get an education or do anything outside of their home, that would require some additional expenses (e.g. transportation, cheap dining, halfway decent clothing, a cell phone plan), so taking those into account, you’d probably need to raise it as high as $5k-6k/year, which still comes out to slightly under your highest-end estimate of $18/day.
In cities where the cost of living is very high, the state and/or municipal government would probably have to provide additional money to residents to make up for the added expenses (for instance, in the city where I currently live, about $5,500/year would be required just to afford the “minimally decent” lifestyle described above, and the expanded “minimally decent with some opportunities to go out and do something productive” figure would probably be around $8k year). The alternative would simply be unemployed people moving out of those cities en masse, since with a basic income they’d be better off living someplace cheaper even if there were far fewer job opportunities there.
None of these figures take healthcare into account, since that’s a whole other can of worms that would greatly complicate all the math involved, so for now I’m just assuming that the UBI would be provided in addition to Medicaid for people who are too poor to afford insurance.
Is that a bug or a feature? I mean think about why, in a post-industrial economy, all the jobs are in the cities? Because that’s where all the people are. If there are very suddenly thousands of people highly concentrated elsewhere then after the initial culture shock, once they settle in, you’ve suddenly got markets demanding services and infrastructure all over the country.
It’s a feature from the perspective of the small town that suddenly has more people moving in. It’s a bug from the perspective of the city that suddenly has a lot of people moving out, which is why I’d imagine a lot of municipal governments would be tempted to supplement the federal UBI with additional money, or take steps to reduce cost of living, or both.
@LadyJane
If the poorest people are moving out, the city may not mind that much.
Also working as intended! The general trend here is supposed to point something like:
1) UBI is a fixed income that stretches further in rural areas than urban.
2) UBI incentivizes UBI recipients to move to rural areas, reversing or at least slowing the steady population decay of those areas and providing a larger income-earning (sort of) population base to sustain local jobs and services.
3) Conversely, cities are incentivized to lower costs of living and rents (made easier by reduced crowding due to people who don’t pack into the slums in hopes of finding a job), and to provide more direct incentives for people to move to the cities, beyond just “this is where the jobs are.”
To me this seems like a win-win situation, with the only real losers being people who want a very desperate and relatively cheap labor force concentrated in cities where it can be exploited easily.
This would solve the “tempting me, upper middle class person, to quit my job and play video games all day” problem. So that’s good.
Actually, everything Stalin did was steel-manny!
God there is so much wrong with this it is going to take me hours to correct you and I don’t want to do it in just one comment so I will just keep replying to this one. And if it turns out I have any emotional energy or time afterwards maybe I’ll respond to replies.
First off the ‘budget constraint’ is totally complete crap. The only limit on the governments printing money (or bonds, they are functionally equivalent) is real resource shortages (oil, water, labour, ect.) at which point we generate inflation, at which point spending needs to go down and taxes up.. That is the definition of a sovereign currency. If you want to tell me deficits are bad for anyone but the billionaire class who hate them because they hate a full employment economy which decreases the effectiveness of firing as a discipline tool, even though they make more money under that regime, than you need to explain why only net exporters like Norway and Germany can run a government surplus without crashing their economy better than this does: (detailed, lay person). History is not on your side:
1817-1821: U. S. Federal Debt reduced 29%. Depression began 1819.
1823-1836: U. S. Federal Debt reduced 99%. Depression began 1837.
1852-1857: U. S. Federal Debt reduced 59%. Depression began 1857.
1867-1873: U. S. Federal Debt reduced 27%. Depression began 1873.
1880-1893: U. S. Federal Debt reduced 57%. Depression began 1893.
1920-1930: U. S. Federal Debt reduced 36%. Depression began 1929.
1998-2001: U. S. Federal Debt reduced 9%. Recession began 2001
You dance around how an UBI would work but completely miss the inflation it would cause. Theses 3 things cannot all be true at the same time:
1. We have an UBI large enough for people to live on.
2. It doesn’t instantly inflate away.
3. We are living in reality where robots haven’t replaced all humans.
So you at least somewhat understand the technology issue, and since Flippy can’t hold down a job for a day I’m not that worried. What you don’t really seam to get is how pulling those workers from Mcdonalds, Burger King, General Mills, and every other producer and distributor of adequate alternatives while simultaneously giving them, and a whole bunch of other people more money increases demand. Those firms will REALLY need to get those workers back if they want to keep up with all that demand so they will really need to raise prices to pay for it. That is what we call inflation. Soon you would need to raise the UBI to bring it back up to living standards which chases off the workers all over again.
The difference with a JG is that it doesn’t decrease production, it increases it (mostly through efficiency gains of better infrastructure). So while a guaranteed job offer of $15/hr and benefits will enable low wage workers in the private sector to negotiate better pay that is a small one time bump in inflation that economist estimate (using mainstream models) to be 0.7% in a year for the JG. And then the anti-cyclical nature of the JG actually anchors inflation. I’ll I’ve seen from UBI supporters is robots and hand waving. The JG people have published detailed papers.
I have no problem with looser rules for entry and exit of SSI and SSDI to decrease the kafkaesque ness. But you are wrong to say they don’t have a program for getting back to work.
I have no problem with counting child and elder care a JG job; just limit it to one person per family member and develop some common sense rules and refine them as needed. Like if you are counting 8 hours a week of helping your cousin (because he doctor said specifically 8 hours or whatever) and you have been blowing it off you are liable if something bad happened to him. JG Jobs can be part time if that is all people want. I don’t see why they couldn’t be two part time jobs that count as one full time one. I also think that almost all JG jobs should require 5 hours a week of paid time to look for private sector jobs / train for jobs in sectors with worker shortages.
If you had bothered to read the literature from the people who have been arguing for this for the last 30 years their proposal is for local oversight of federal funds. Obviously with some graft monitoring. Jobs would be wherever people live. Actually you could have saved a whole lot of straw but just reading this FAQ first. Or this paper about where there is consensus among JG advocates.
Also stop pretending that guarantee and mandate are synonymous. It makes 7. and 8. complete straw man arguments based on your priors, including your misunderstanding of the type of capitalism the classical economists like Adam Smith and John Stuart Mill advocated for versus what we have now, without even looking at the evidence. Problematic employees can be suspended from the program, or redirected to counseling and/or rehab as needed. No one is forcing anyone to work anywhere. And I totally agree with you that we should shorten the work week. It would probably increase productivity like it has in europe. A great way to do that is by implementing a JG with a shorter work week as the effective floor of the labour market.
Yes there might be stigma with JG jobs but that is 100% better than the sadistic game of musical chairs we have now where the fed’s job is to make sure there are less jobs than workers who want them while society does nothing but tell the losers they are lazy and worthless. What a meritocracy. A JG would help with soft skills, an UBI wouldn’t. A JG could easily be used to make all of the current worthless job centers we have now (because no job seekers or employers look there) into a database of resumes for people in JG jobs (hireable) and what types of private sector work they would be qualified for while adding their JG supervisors as a reference.
The current system where what you know is 2nd at best to who you know is so past its prime. If you have had any bad luck or period of unemployment the resume scanning algorithms just toss it before a person even sees it. Which is just fine, because all the important people don’t have unforced periods of unemployment and they have nepotism to fall back on. Which is why despite me going to school and getting an engineering degree I have always made less (inflation adjusted) money than my no college dad when he was my age. And that isn’t changing anytime soon.
I think you need a lot more clarification on your inflation point.
But they’re not in the US at least. If the Fed buys bonds, that’s injecting more money/inflation, if the Treasury issues more bonds, that’s borrowing, where the money is being lent to the government instead of used somewhere else in the economy. The impact of borrowing by states is a macro question, which means almost by definition that we don’t know for sure what the deal is. You listed some arbitrary timelines of varying lengths of fiscal policy constraint and then claim this shows fiscal tightening leads to depressions, despite the fact that the ongoing monetary policy at these times varied widely, but is often seen as pretty darn important. Talking about the Panic of 1837 without mentioning the ending of the Bank of the US by Jackson or the tightening of British banks is historical economic irresponsibility!
Oh and also, there are example of deficits being pretty bad for countries, just not the US.
On inflation caused by UBI generally, it’s definitely true that a UBI would increase the real cost of labor since the leisure you are giving up is now more valuable for tons of people, so they want to be paid more for their labor. So let’s look at the market for McDonalds. Increasing labor costs for businesses mean a leftward shift in the supply curve, even with substitution towards capital. That would mean a higher price and fewer goods purchased. But whether demand would increase or decrease for McDonalds is hard to say, since there are lots of goods people may be buying, and perhaps because they are poor, they are eating more McDonalds than they really want to. Wealth effects mean they’ll consume more of it, but perhaps they are just going because they never have time to cook themselves.
I think no matter how you break it down, there is no situation in which the increased income from the poor who get a BIG is simply spent on the exact same basket of goods that it was spent on before they got the BIG. Some of it will be saved, some will be used on different goods. To say there is no change in what is is purchased is to suggest people would not change their behavior if they got richer. Additionally, some of the increased labor costs are going to be in industries that sell to people who will get no benefit from the BIG, so their demand won’t increase a bit (it may actually decrease if they are taxed more). As soon as any of these things happen, and I would wager quite a few of these things will happen, the amount of money going towards goods that poor people buy today will be less than the amount of money poor people will get from the BIG, which would result in a real transfer of wealth to poor people.
Also, see discussion here and here.
My intuition is that one of the reasons the poor stay poor is that they are unlikely to have access to the kind of free time required to actually do basic home economics correctly. Driving to and shopping at Costco (in the US) can reduce a food budget for three people to less than 300 dollars a month (well, WELL under anything the USDA says makes sense – https://www.cnpp.usda.gov/sites/default/files/CostofFoodMar2018.pdf) the objection here is that it costs time and forethought to do these things.
People treat time and planning as mere economic costs in these calculations, and barring a (weird as all get-out) version of robot empires that include pay-per-task style employment those goods are not fungible. UBI could potentially alleviate that. I think the risk of an immediate rise in costs that makes UBI worthless to be the biggest problem with UBI.
The only difference between bonds and dollars is that bonds pay interest. The Fed is part of the government, if it earns more money than it needs to operate that money gets deposited in the government’s account. This link goes through all the process in way too much detail, I actually recommend you don’t read it unless you have a degree in econ. This is a much easier to follow explanation. And here is a former Fed Chair explaining the benefits of realising it, but with less of a description of why it works that way.
My point wasn’t ‘hey look at this one time we paid down the debt and it crashed the economy.’ It was ‘hey look EVERY time, under all kinds of monetary circumstances, that we have tried to pay down the debt it has crashed the economy. It comes from basic accounting 101. Draw a bubble around the domestic private sector, the government, and the foreign sector. For any one of those sectors to have a surplus at least one of the other two has to be in deficit. That isn’t an opinion, it’s just an identity. Since we have rarely sold more to the foreign sector than we’ve bought from it we have had to either put the government or the private sector into debt. Only one of those options does not crash the economy.
Deficits are very bad for countries that don’t print the currency the debt is in. The reason Europe is having a populist backlash is because Germany insists on running a huge trade surplus and made them sign the maastricht treaty so that their governments can’t run deficits over 3% of GDP or print currency. It makes growth impossible. It’s also why we invented the IMF to ensure that whenever a small country needs a loan it is dollar denominated. That way we can keep them under our heel.
Really, once you understand just how intentionally and horribly wrong mainstream economics is it just makes you sick. Everyone treats globalization like it has been something generous the 1st world has done to help the 3rd world out of poverty. Nothing could be further from the truth. It sickens me how we have used the IMF and just plane faced lies about money creation to keep the third world in poverty while also destroying the middle class here by exporting jobs.
That first Medium link has so much wrong my head hurts. QE wasn’t printing money, it was an asset swap. Printing money isn’t necessarily inflationary, Since your referring to it as BIG instead of UBI I assume you read the paper that talked about both ways of funding it and the negative aspect of taxing for it. Not to mention he says UBI is going to replace food stamps and any UBI that cuts other programs is absolutely a non starter for me. Let them shrink on their own.
No where did I say a small UBI would be inflationary or even a bad thing. I said it cannot meet all 3 of those conditions.
Same thing for the goes for the roosevelt paper. No one is living off $1k a month. My claim was it will be inflationary if it allows people to drop out of the workforce. The inflation comes from having to bid up wages to get workers back.
The only reason I mention demand at all in my argument is because I’d say it’s a fair bet there will broadly be an increase in most sectors if you are giving out money to poor people. The inflation is really more from the decreased production if workers leave the workforce and those jobs need to get done.
That is not the case. In 1919 debt was 27,390,970,113.12. It fell every year thereafter until 1930. In particular, it fell in the first few years thereafter, the period when the Great Depression didn’t happen.
From 1920 to 1921, the consumer price index fell by 10.8%, more than in any year of the Great Depression; it fell another 2.3% in the next year. Unemployment rose to about its 1931 level. Looking just at that data, it’s obviously the start of a depression.
Harding did what Hoover is supposed to have done, reducing taxes and government expenditure. By 1923 the recession was over.
In 1920 debt was 25,952,456,406.16.
By 1923 it was down to 22,349,707,365.36
(Debt data)
Is your point that every time we have tried to pay off the debt, the economy crashed ten years later?
You will note that debt went down through the early 20’s, and that depression was over in about three years. It went up through the 1930’s, and that depression lasted ever ten years.
Debt also went down most years from 1866 to 1891.
My contention is that for the government to be taxing more than it spends means that money needs to come from somewhere. The only two places that can be are the foreign sector or the domestic private sector. In the early 20’s we were running a trade surplus but once that ended by continuing to demand more in taxes than it was spending it required the private sector to go into debt. The private sector can only be driven into debt for so long before it crashes the economy.
Like anything it depends how much and how long, but it isn’t stable. For the math behind it here is an explanation of how Norway has a huge government surplus.
With producers of certain goods or services you may have a point. With distributors, I’m less sure. At the end of a 10-hour grindy work day (which my boss and I both pretend is 8 for tax purposes), I want something like McDonald’s because it is fast, convenient, etc. At the end of a 6-hour work day in which I am (relatively) happy and productive, I can make my own burgers! UBI will likely inflate the price of meat in general, but probably not as much as it would inflate the price of meat plus the price of the labor needed to cook the meat, wrap it in disposable materials, and very-inefficiently distribute it somewhere that is about equally distant from everyone’s home, work, or grocery store. I can probably source said meat from a nearby farm. Even if there isn’t a nearby farm, there might be a locally-owned retailer, or a community “farmer’s market” event, where the materials I need to be able to prep food can be acquired without great inconvenience to either myself or the supplier. And I don’t see a reason why this particular type of transaction would be any more expensive than it already is; after all, there are few or no people in the middle, and it’s not like they need to charge extra money for their goods or services in order to get by. After all, they’re guaranteed a universal basic income!
Eating disorders and “luxury meals” aside, in general the demand for food is going to stay about the same: people need food to live, so the level of demand for food is going to scale roughly with the number of people who are alive. People having money doesn’t increase demand for food, it just makes that demand more likely to be realized as opposed to the alternative (e.g. malnutrition or suffering, if not starvation or death).
So, demand is fixed. The danger is to supply: what happens if all the people who work on producing food stop producing food? To some extent, this danger is always present anyway—everybody who works to produce food (or approximations thereof) today theoretically has the option of quitting. I get the sense people who bring this up as a reason to fear UBI are worried that laborers in the food industry only labor because it’s less horrible than something else, instead of being something rewarding. If laborers didn’t have to labor, they’d never choose to labor in food production. But surely, some amount of compensation would get enough people to want to labor in food production, even with UBI in place. So, why aren’t laborers already getting that amount of compensation? Speaking as somebody who types and clicks on things all day, and is compensated…not generously, but substantially more than the average farm worker, I suspect this is because my job (and certainly my boss’s job) are over-valued while the agriculture laborer’s work is under-valued. And if that’s true, then UBI would be the first step (wage transparency a second step) toward addressing the root cause of the problem.
I agree with most of this. The problem with the UBI is two fold then.
1. In theory I’m all for inflating away the salary differentials, in reality it’s quite disruptive, especially since we don’t who how fast or what sectors or anything else. People who live through high inflation generally don’t like it. If we could wave a wand and have 4% stable inflation I think we could sell people on it but in reality it will be much more chaotic.
2. There is still a problem with making sure the number of jobs matches the people who want to work. I worry about the people that will have to be depending on JUST the UBI, especially if we are paying much higher relative wages to ‘low skill’ workers. That gap and stigma on non workers are what are wrong with UBI.
If the point is to get better pay equity I think offering a JG as the floor for the labor market and taxing the hell out of the oligarchy on the top (because if you don’t tax them they buy the government and rig the system more) would work better.
UBI would redistribute income from rich to poor (poor get UBI and tax increases by less, rich get UBI but their tax increases by more).
All other things equal – borrowing, how much of peoples income gets spent – there’s no effect on inflation.
All other things are not equal. Gov may borrow more to finance, increasing inflation a bit. Pooer people spend more of their income, increasing inflation a bit.
But still, the idea that the whole thing would be inflated a way is silly nonsense.
I never said all UBI’s are inherently inflationary. I said an UBI that is large enough to live on will be inherently inflationary as long as we are living in the real world where robots haven’t taken our jobs yet. If an UBI is big enough to live on it will pull people out of the workforce (decreasing production) while simultaneously giving more people money / redistributing money to people who are more likely to spend it (increasing demand). Firms will need to hire back the workers they lost to keep up which means paying them more, which means higher prices, which is inflation. There is no way around that. It will create inflation until the real value of the UBI isn’t enough to live on.
I haven’t made it through the entire article yet, but it struck me reading the first section that the “bureaucracy that would put bureaucracies to shame” that Scott says is needed to solve the problem of people taking advantage of caregiver incomes or disability incomes could be solved by a combination of AI algorithms and invasion of privacy.
I.e. If you want access to these incomes, just have the government track all your data and feed that into an neural net that can determine with 98+% accuracy whether the applicant is trying to game the system or not.
Can you imagine the public blowback that’d cause when thousands of people argue (whether truthfully or not) that the AI’s algorithms are unfair, biased, and wrong in their case? Or the lawsuits it’d cause when some of them try to appeal it to court?
I mean, this already happens in property tax assessment litigation. The government values your home/condo based on mass appraisal techniques with a computer model tracking home sale/condo sale prices, and then if you appeal your assessment to lower your property taxes then it goes to some sort of assessment review board or tribunal. It’s a fairly non-political process to get it fixed.
On the other hand, that is based on a lot more impersonal data. My hobbies and which websites I visit don’t impact my home’s price, but they do impact the odds of my gaming the Guaranteed Caregiver Payment system.
(Plus, property tax rates only directly impact people who own homes; Guaranteed Caregiver Payments could impact a whole lot more people, or people less likely to have the sort of good habits that help one buy a home.)
I think this post is super important, to the point that you should probably disable the comments section so that it can be forwarded widely.
My exact thought process: “1. I should share this!! 2. But some of these comments…”.
There’s a button at the bottom of the post giving a “Link Without Comments”: https://slatestarcodex.com/2018/05/16/basic-income-not-basic-jobs-against-hijacking-utopia/?comments=false
Thank you!
If it starts getting shared, disable away, but the conversation has already been interesting
You have put an enormous amount of effort into this post, but it all seems to stem from the assumption that UBI is good without actually thinking about how it will go wrong or discussing it with anyone who has.
What does it mean to have a “basic” income? Surely housing is included, and housing prices vary wildly over different regions. Are residents of Detroit getting enough money to pay for housing in NYC or are residents of NYC getting enough money to pay for housing in Detroit, or do we have a “cost of living adjusted UBI” where some people get enough for a low end car payment and others enough for a monthly subway pass and every other conceivable difference or are we just accepting that a few (tens of) millions of people are going to not be getting a basic level of income at all while a few (tens of) millions of people are getting well over their basic level?
While we are on the subject of the disabled, well the disabled have extra health costs… are getting more in terms of UBI? Long story short as soon as UBI is introduced it will be noticed that a great many people cannot afford their health insurance payments on their UBI and there will be cries for a nationalized health insurance on top of the UBI.
What about children and married couples? How are we balancing UBI payments to families without seriously screwing up incentives there? And immigrants? And families of immigrants?
The short answer is that right after you cut the Gordian you are going to pick up the slashed pieces of rope and attempt to retie them together to hold the system in place.
The optimism that there is a simple solution to an enormous issue is overwhelming.
If the bottom 15% (by pay) of a hospital’s employees quit because they no longer needed the money what would happen? Imagine a hospital where the guy who mops the floors never shows up again and no one is there to replace him, or no one applies for the entry level security guard position, or the cafeteria workers all quit? Do you imagine that mopping floors after hours in a McDonald’s is soul crushing but mopping up blood an vomit in an ER is so rewarding that people will show up consistently and do the job well with a UBI?
Most jobs suck at least some of the time, many jobs suck frequently, and the fact that people outside the business world don’t appreciate is that people not showing up for work causes costs to explode. Bill didn’t show up to kneed the dough and run the oven means that all the time that John spent measuring and mixing, and Frank spent building a customer base and ordering ingredients worth a hell of a lot less.
Costs explode for businesses = costs explode for consumers = you gotta pay more in UBI from a lower overall productive base.
As I’ve said many times, any conceivable Jobs Guarantee will inevitably become a Shitty Jobs Guarantee. And there’s also sure to be times when we end up making useless make-work jobs to keep the program truly universal. In that case… why not just give people the money?
Freddie,
How about this one:
https://medium.com/@morganwarstler/guaranteed-income-choose-your-boss-1d068ac5a205
My take on it is that any large scale UBI system would be a death spiral to unproductiveness, immigration and having lots of kids (we can call them little bundles of UBI). I would experiment with a decentralized jobs program as above, but admit it may fail too.
The idea that human beings only are productive under the profit motive seems quite obviously incorrect to me. Look at the actual behavior of humans in their spare time. Many hobbies are indistinguishable from work. And note that this is all happening when people already work 40+ hours a week. Imagine how much productive capacity could be unleashed if people were free from tasks that they only undertake to feed themselves!
Yeah, but a lot of those hobbies produce no value to anybody other than the hobbyist. Which is fine! My biggest hobbies, flying and ham radio, can certainly consume a 40 hour week if you want them to, but they’re basically pure consumption on my part–there are a few ways that they can be remunerative, but they make those hobbies drudgery rather than fun.
Look at the actual behavior of humans in their spare time. Many hobbies are indistinguishable from work
You are surrounded by well above average people. Of course they are functional in their spare time.
Freddie,
Not sure where anyone suggested “human beings only are productive under the profit motive”.
YOU specifically questioned whether a jobs program could be other than make-work shitty jobs. I replied with a specific detailed link which (I believe) totally addresses your every possible concern. The appropriate response at this time is either to admit your error or point out the shittyness inherent in the detailed jobs program which I linked. But instead you do the good old fashioned internet trick of changing the subject to something irrelevant that nobody ever suggested.
I take it you have already made your mind up on the subject.
@Freddie deBoer
Hobbyists tend to eschew the less fun parts, though.
JWZ has written many essays on how a lot of open-source stuff really sucks.
https://www.jwz.org/blog/2013/02/wow-remember-when-people-tracked-bugs-welcome-to-the-next-level/
“I’ve done some well-known bitching about the halfassed and haphazard way that Open Sores projects have handled their bugs in the past, but man, things have only gotten worse since then.”
It’s not the fun part so it gets ignored.
Also documentation falls under that problem.
Do you assume that profits have to be in money? I profit a great deal from the existence of SSC, on which I spend a fair amount of my time, although I get no income from it at all.
In a market system you do work that benefits other people if they are willing to pay you enough to make it worth doing. You do work that benefits yourself, whether that means cooking dinners or participating in SSC, if the benefit to you is enough to make it worth doing. The logic is exactly the same in both cases.
About 60% of the American poor do not work, and 90% don’t work full time.
https://www.census.gov/content/dam/Census/library/publications/2015/demo/p60-252.pdf See table 3
Their waistlines indicate they are fed more than enough.
When can we expect this productive capacity to be unleashed? It’s been 30 or 40 years.
(Back in reality, they mostly just consume leisure, primarily in the form of TV.
https://www.bls.gov/webapps/legacy/tustab11a.htm )
One of my mom’s pet peeves in the last few years is the new trend of leaving out the preposition “from” when using the verb “graduate” and instead treating the educational institution as a direct object. Last I talked to her about it, she seems fairly convinced that this is mainly exemplified by people with a low educational background (she was first exposed to it from TLC reality shows). My take is that it has little or nothing to do with educational background but that it’s a recent innovation in American English that’s more common among people younger than her. (Also, I make this “mistake” occasionally — this first came up when she caught it in my speech — and I’m not even really opposed to this innovation.) Anyway, since then, I’ve noticed its use several times by people who don’t come across as poorly educated, so I’ve continued to think my impression is correct.
But this was the clincher.
(When I’m home and have more time, I might make a more substantial contribution to this comments section, sorry :P)
Does your mom really not know that her preferred version is also not “correct”? Before it was “graduated from,” it was, of course, “was graduated from”. Bit of a pedant fail, there…
That actually didn’t occur to me. During my lifetime at least, it would seem that graduate has always primarily been used with the subject being the person who is being promoted (e.g. “I’m graduating from college next spring”). I always assumed that the transitive causative version (as in, a teacher graduating their students) was secondary, in much the same way that marry typically uses the spouse as the subject but there is also a transitive version (as in, the minister marries the couple).
I love this post. It’s very articulate and easy to read and it argues its point well. But it ignores the biggest issue with basic income guarantees, which is that it’s really really expensive.
I understand that that’s not what the point of the article is – it’s comparing to a basic jobs guarantee, which would also be really expensive. So, fine. But I really do thing basic income proponents need to do some more hard math on how the heck we pay for this thing.
For context, last year I was working in a Senator’s office, and decided to put together a proposal for a basic income. So I actually did some math. I ran some numbers on how much it would cost, looked at the national budget and figured out what sort of expenses would become superfluous and how much that would save, figured out how big a gap was left and would need to be covered by new taxes or budget cuts elsewhere, and what sort of things could be cut to make up the money.
And in the end… I couldn’t make the numbers work. Any realistic proposal would have to include some combination of horribly unpalatable things like huge tax hikes or halving the aged pension or gutting the education budget. And all for what – so that the people who don’t need the dole can get it too? (This is Australia – we give money to unemployed people already). I never ended up suggesting the idea to my boss.
I still love the idea of a basic income. And maybe someone smarter than me can find a way to make the math work. Or maybe economic trends will make it more feasible as time goes on.
But until I see that happen I can’t call myself a proponent of a basic income anymore. There’s a lot of nice ideas that don’t work in the real world – sadly, this looks to me like another one.
My figures, assuming around 30% of the UBI comes back in taxes, suggests you could pay for a 10k UBI with an increase in taxes of around 20%, assuming states were pushed to support half the cost. (20% of existing taxes, so a 10% tax rate rises to 12%, and a 40% tax rate moves to 48%)
That without cutting any programs. You could probably make it tax-neutral with careful cutting, without even gutting medical support.
[edit: sorry if this is a repost. I deleted and then re-submitted, but it was still giving me a duplicate post flag…]
I’ll try to avoid repeating the criticisms voiced above.
One thing that stood out to me was the claim that UBI/UBJ needs to move people above basic sustenance. Why? Something something “human dignity” something something? NB that the minimum amount of money to keep most people alive is far, far lower than 10k/year. Rice, beans, used clothing, communal living and all that.
Typically, when theft is justified in thought experiments, it’s because the person is starving lost in the woods with no reasonable alternatives. So they rob the cabin. If you change the thought experiment to “this person has food, clothing, etc, but they’re bored in the woods so they break into the cabin to watch TV”, the example falls flat.
I get that it sounds really pro-social and proper to say that everyone ought to live a good life. “Hey, let’s put people on UBI so they don’t have to work at McDonalds and can attend classes at the community college to better themselves!” I’d prefer it if you clarified that this is an aesthetic that you’re chasing and definitely not something that is required by the vast majority of moral philosophies.
Second, I think you tried to strike a good balance between people in legitimately bad situations and over-coddling people. But the rhetoric is skewed because you give the opposition a name – “gatekeepers”, whereas the people who think no one should have to work at McDonalds are just well-intentioned and maybe too idealistic.
But it strikes me that there’s not nearly enough gatekeeping, so let me gatekeep a little harder. You mention that for a jobs program people might be required to leave their home city. Last time I checked, not having to move wasn’t a human right. Many, many people move cities, sometimes for a job and sometimes for stupid arbitrary reasons. You can trot out examples where someone has to take care of an ailing family member, but that scores pretty high on the conscientiousness scale. Conscientiousness is going to be very anti-correlated with the majority of people who need a UBI/UBJ.
Second, isn’t it a huge mystery why there are so many more disabled people? What’s going to happen? The graph is going to continue going up until 20% of people are too disabled to work? 50%? If I recall you have a giant blog post on this topic, but Jesus Christ. If you subsidize something you will get more of it. I know that a UBI might actually reduce disability claims because it reduces the incentive to sleeze and claim disability, but objectively society is deteriorating both physically and mentally every year.
One level of gatekeeping is to try and filter people who have disabling conditions. But a way more important layer is to gatekeep against people who self-induce the condition. Part of adulthood is getting your mind and body to work properly/consistently. There are people who can work 100 hours/week in finance or law, and for every person who “doesn’t have enough energy” or suffers from anxiety or whatever, there will doubtless be people working these crazy grinder jobs who came from a much worse developmental environment.
I think the bar to be successful in society is actually quite low and people have just figured out that they can get by doing less and less each year as society becomes wealthier and/or more generous to the lower rungs.
Obviously people will opt to stay at home and netflix/xbox if they get a UBI. I don’t particularly care what people do, but it seems to be very far divorced from any kind of moral obligation to support the less fortunate. But our ancestors would laugh at 99% of the reasons people want UBI.
Last, I believe we already kind of have universal basic jobs. The demand for low-skilled labor is extremely elastic http://econlog.econlib.org/archives/2005/05/infinite_contra.html So while you might be able to trot out examples of low paying jobs with horrible working conditions, I can trot out examples of low-paying jobs with extremely easy working conditions that are only a step removed from sitting on the couch watching TV. Take your basic desk job. You’re a receptionist and its your job to answer the phone and record appointments on a computer. You work for a law firm and its your job to redact (black out) names and personal contact information. There’s an unlimited supply of these kinds of pointless sub $40k/year jobs. Yes they sometimes require a college degree, which is why people have to work at McDonalds, but mostly this is just filtering for behavioural problems.
The world is large, so you will always find an example of a conscientious person working for pennies at an unreasonably stressful job. But currently the bar for getting an easy job that pays above minimum wage is quite low.
But if it’s so easy, why doesn’t everyone do it? Because they claim some sort of disability or disadvantage. But a very large percentage of modern disability is self-inflicted. The trend towards physical disability itself makes no sense because jobs are becoming less physically risky every year. But the incentive to fix yourself is also decreasing every year, apparently at a greater rate.
That there’s some kind of moral imperative to increase this incentive is mind-boggling to me. Well, not really, because I understand that talking about welfare makes you seem like a really kind and thoughtful caring person, and that writing polemics about how lazy and wretched people are makes you sound like an evil anti-social curmudgeon. But if the goal on SSC is to LARP as a level 99 grey-tribe rationalist, I think the OP is very far from that.
I can only parse this as “there’s an unlimited supply of these kinds of pointless jobs, for anyone who doesn’t already have problems getting a job”. So… the system works to the extent that it already works? I think Scott’s point is that it doesn’t work terribly well.
“One thing that stood out to me was the claim that UBI/UBJ needs to move people above basic sustenance. Why? Something something “human dignity” something something? NB that the minimum amount of money to keep most people alive is far, far lower than 10k/year. Rice, beans, used clothing, communal living and all that. Typically, when theft is justified in thought experiments, it’s because the person is starving lost in the woods with no reasonable alternatives.”
Well said. If we change the UBI to something three or four times higher than the average global historic income post agriculture ($3), we could afford to pay a generous stipend of $10 a day. We could throw in a free teepee and a shared porta potti in the communal fields with giant fresh water tanks. They could eat rice, potatoes and beans and easily get enough calories. On holidays they can splurge and eat at Little Ceasers for half their daily income.
I believe $10K per person UBI would self destruct. I believe $10 a day with a teepee and porta potti would work great. It would be much better than our current welfare system. Single motherhood rates would plummet, illegal immigration would plummet, useless degrees would be a thing of the past, tax rates would drop, employment rates would hit historic highs and median incomes would soar.
Let’s call it “$10 a day and a teepee”
I worked out some numbers along these lines in an old blog post. The relevant part is in the second half of the post.
Unless you plan to surround these communal fields with a wall+armed guards combo, your cities will get what TLP in his post on SSI called ‘an infrastructure upgrade’.
SSI, at that time, was $600/month (+ meds you can eat or sell) and it worked, at least according to that post, pretty much as basic income. $600 times 12 times inflation is probably $10K you don’t believe in.
So about $3,600 per year? Realistically, all but the truly unemployable would still work, but it would be a helpful amount of money. Enough to pay for a shared room in a mid sized city. Or a small shack plus some food, if land use restrictions weren’t enforced. Though they probably are — otherwise there would surely be more otherwise homeless people living like Thoreau in Walden.
That sounds like a great standard to me. Everyone should be able to live as well as Thoreau in Walden. I would even throw in one new teepee every five years.
And yes, only the truly unemployable would take it. That is a feature.
Discussions like this are weird. You get libertarians supporting it because they see it as more efficient and less intrusive, progressives support it because they see it as opposing the evils of society against the victim class, and socialists supporting it because it amounts to a giant leap forward in central redistribution.
Of course they are not really agreeing, as they are each defining the details, intended goals, the amounts, and the funding in contradictory ways. Devil and details.
Have you ever gone looking for a job with a slightly unexpected work history?
Experience with the lower level job market suggests that there is not an unlimited supply of such jobs for unattractive people who might blow up at an especially petty, tyrannical customer or co-worker once out of every 1,000 interactions. That is also true at the sub $20,000/year level. Many jobs in that range advertise for, and are able to find, an extroverted, cheerful, conscientious, college educated, 20-40 year old woman with excellent references (or man with several of those characteristics). People who are not in that demographic are better off learning a niche set of skills, which requires some support and intelligence. Warehouse workers and truck drivers are an exception, but aren’t great prospects at present for reasons described in the article.
I’ll counter your anecdote with my personal experience, which is that people straight out of high school get receptionist jobs paying $10/hr without much trouble. These people find the vast majority of their days very easy, even if they occasionally complain about negative interactions with customers.
A quick google search shows that 90+% of receptionists are women. I’d hazard that male receptionists are also working qualitatively different types of reception jobs than the stereotype we are imagining.
Are temp agencies still around? It’s been a long time but I used one as an awkward 19 year old with no work experience. Ended up stuffing envelopes in an office, then making way over minimum wage in a TV factory.
First time posting on SSC. I’m not nearly as well-versed as most folks on the issues discussed here (though I have spent the last four months avidly reading the archives) but Scott’s latest essay resonates with my favorite real-world principle: The Law of Unintended Consequences.
I agree with Scott’s argument that UBI would be better than UBJ, as far as it goes. But I also believe that there is no way that the smartest economist in the world (or even a team of the world’s smartest economists cranked up on meth) could forecast the long-term effects of a UBI. It almost seems like a problem in computational complexity–how would a UBI affect health care? The deficit? International trade? The school system? Addiction? Job benefits? Or any of a thousand other things? The rippled would go off in all directions.
If the LUC ever applied to anything, it applies to this. I agree that a UBI may be better than the system we have now (especially concerning disability–in one of my previous lives, I wrote web copy for lawyers specializing in disability claims, which left me in constant need of a shower), but it’s a giant leap into the unknown. I am simply not convinced that anyone knows what would happen once we pushed that button.
Advances in genetics and brain science might make us much better at identifying the “deserving poor.” How about instead of have UBI to solve the problems you describe of people being unable to prove they can’t work, the government funds much more research into finding objective ways of identifying these people by genetic tests and full body scans?
Let’s take this a step further. If we know that this is due to genetics and it can be tested for, should we require sterilization as a condition of getting these benefits?
I think you have just provided a “slippery slope” argument that would convince most people to oppose my plan.
I am a programmer. I have a really good job. I quite enjoy it, I get paid well, I like my coworkers. I can listen to my favorite music over headphones while working. When someone does something stupid my coworkers and I enjoy ourselves laughing about it. I am probably somewhere north of 95th percentile job satisfaction in the country.
If you offered me enough money to support myself indefinitely while staying at home playing and designing increasingly complicated computer games and board games…well…I don’t think I would take it. Probably. But I would be very tempted.
This seems to suggest that somewhere around 90 percent of people would quit their jobs. And maybe in the Glorious Robot Future that would not be a problem. However, one thing that several of Scott’s articles on this topic seem to have missed is that we are not actually in the Glorious Robot Future yet. Yes, once you get to a position where our robot armies can do everything we want, a basic income guarantee is probably the best way to convert this into a high standard of living for many people. But we are not in that position. We are not close to that position. Right now people’s jobs are actually adding value that will be lost if they quit. And implementing a basic income guarantee now feels like it would just obviously be a disaster.
(None of this should be taken as support of a basic jobs program, which sounds even more obviously disastrous and makes me want to exhume Joseph McCarthy and turn him loose on everyone suggesting it.)
Same here.
Same here. Aspects holding me back: Unsure future. We don’t know if the program gets cancelled at some point, and everybody has to re-integrate into the work force or something. Social state: “Hi, my name is… I am x years old and work as a…ah…”. Maybe Loneliness.
Actually a far lower number would already be a problem, if it starts with the people who clean public toilets, for example, and continues with garbagemen.
That’s an awesome idea for a new zombie game! If only Scott got his way…
[extreme lack of charity but I can’t resist the joke]
Wouldn’t a zombie who only ate the brains of communists very quickly starve to death?
[/extreme lack of charity but I can’t resist the joke]
I guess I was begging for it 😉
However, Joseph McCarthy interviewed playwright Bert Brecht (at that time a German war refugee) and let him go, after Brecht wrote plays that decidedly rejected capitalism like “The Good Person of Szechwan” (if you actually happen to think that all communists were/are just too dumb, watch that play, it is truly convincing ;-)). Brecht would then become one of the most important writers of the GDR.
As an ADD dungeon master I would assign intelligence: 17 and wisdom: 15 to Brecht, so there would be plenty for a McCarthy zombie to feed on.
+1
I have a great job. But every day I leave for the office thinking “man, I’d rather stay home playing games with my kids.”
+1. I have a great job, I enjoy it, and it gives me a sense of accomplishment… but I’d be tempted too.
And in a society where UBI enabled millions of accomplished people to get by without a job, the social temptations would be even stronger. Do I want to miss my friends’ board game meetup noon Thursday? What about the hike Friday morning? What about my cousins who insist they really do want to see me next week and never mind my limited vacation time? Or do I resolutely close my eyes and limit my social circle to those people who’re already working?
Good news! If you want to live on $10,000 a year as a programmer– which is the approximate level of UBI most people are talking about– while working substantially fewer hours, you can do that through becoming a contractor.
However, few programmers do this, and I do not think it is because of widespread ignorance about the concept of contracting or because of the very important difference between working twenty hours a month and working zero hours a month.
Yes, this is what lets me be fairly confident that I would not in fact stay at home all day if the temptation were offered, since in fact a nearly-as-good deal is already on the table and I haven’t yet taken it.
On the other hand, ‘save up for early retirement’ is a better plan than ‘work short hours as a contractor’, so perhaps I’m just biding my time.
Actually, there should be an even better solution: since programmer jobs make substantially more than $10,000 a year, it should presumably be possible to work, say, one year in five, living off of savings the rest of the time. The several reasons why I personally am not doing this, in decreasing order of importance:
– Social norms. Both against being unemployed while clearly employable, and against working a ~$100K / year job while living on ~$10K / year (which means that I’m not saving enough to carry this off). “Social” in this case includes immediate family. (I’ve contemplated the stay-at-home-mom job as a possible route that avoids the unemployment stigma. I would also expect to retire early, although it’s too early to talk about that.)
– Fear of loneliness. I don’t make friends easily, and for many years, I have used school (and now my job) as a way to pre-filter my interactions to people of broadly similar interests and intellectual abilities, in hopes of making friends after what feels like a reasonable number of attempts. This is also the primary reason why I don’t work remotely.
– Unwillingness to risk damaging my future employment prospects by not easily explained gaps in work history. Concerns about both true and signaled inability to commit to a job for an extended period of time implied by a pattern of “1 year on, 4 years off”.
Scott however seems to be implying a much, much more generous level of UBI. Of the kind that would allow people both basic support and free them up for “unlimited leisure”.
You can have unlimited leisure as long as you are willing to live on $10,000 a year.
I was in something close to that situation. I had a job as a law school professor. It wasn’t very much work and on the whole I enjoy teaching.
I didn’t need the income—at this point in my life I can afford to spend the rest of it at my accustomed level of consumption without ever earning any more income. I retired at the end of last year. Part of my reason was that the sharp decline in law school applications a few years back left my law school struggling, one part of the budget they couldn’t cut was the salary of tenured professors, so by retiring I made things a little easier for them. But the main reason was that I found even the easy and pleasant work I was doing a net negative–less interesting than commenting on SSC or a speaking trip in eastern Europe.
My working life has had two phases.
1. You mean they *pay* me to do this fun stuff?!
2. I hate this BS, but I can’t afford to quit. How much more can I save per year so that I’ll be able to retire sooner?!
Currently, I can afford to retire except in some contingency cases, but can’t be sure those contingencies won’t occur, and have no way to insure against them. So I’m working for another 2 years.
I am not sure when this crossed over, or what caused it, but here are some factors:
– I moved from a country with a functional social safety net (Canada), to one with no such thing (USA)
– my specialty (software engineering) went from something people were desperate to hire, to something everyone was advised to study, in order to get a “good job”
– outsourcing became a thing. I could expect my employer to have a branch office in some developing country, where they could hire people to do all/most of my job for a significantly lower rate – with worse working conditions as well
– H1B serfdom became a common thing. Many of my coworkers would be sent to their countries of origin if they quit or were fired or laid off. And they’d be stuck in this state for many years.
– I became aware that my employers routinely lied – to employees, customers, and anyone else. Switching jobs only reduced the obviousness. I was forced to demonstrate “soft skills” (lying, office politics, etc.) to be an acceptable employee.
– the US fetish for extroversion and noisy work environments, and for that matter for working on tiny screens in non-ergonomic locations invaded the software engineering workspace. We’re all required to sing the company song about how this will promote “collaboration” .
The common factor seems to me to be one of relative power, or lack thereof. The more employers expected negative consequences if they pissed off the engineering staff, the better I liked my job. The more employers regarded engineers as “interchangeable engineering units”, in a manner analagous to fast food workers, the more my jobs sucked.
And there’s a carry over. I’ve rarely been a person they’d be glad to lose. But they want to treat all engineers essentially the same, except for factors they demand that we not compare among ourselves (money). So it’s noisy bullpens and/or RSI for all, even with empty private offices. The only route out is generally to become a manager – a job that wouldn’t be inherently fun for me.
At this point, employment annoys me so much that I’ve swung extremely far over to the left side of the political spectrum. This is especially notable given that I was at one time libertarian. Now I expect just about any sort of evil from corporations, and completely fail to understand why most Americans attribute such a likelihood to big government but not to big business. Given that I believe the natural behaviour of corporate employers is to tend towards Amazon-like working conditions (warehouse-style if possible, but even their software developers work at the low end of software developer working conditions), I favour both regulation and anything that increases the relative power of employees (breaking up large companies, encouraging unions, giving employees a reasonable safety net that will let them quit a hell job, etc.).
Jordan Peterson makes the most cogent argument against the UBI:
https://www.youtube.com/watch?v=v7gKGq_MYpU
He makes a good argument that the problem of people needing structured, meaningful, socially useful work is a Really Hard Problem at the low end of the distribution. Having a few vestigial low intelligence/low orderliness jobs left in bagging or retrieving carts or whatever doesn’t do much about it. It isn’t clear that he has any ideas at this point for how to solve it, other than that UBI might make things deteriorate even faster than necessary. UBJ would just have to employ a bunch of miserable minders to get the very low end people to do anything that even looks productive, like the story Peterson likes telling about trying to get a low intelligence worker a volunteer position folding papers, and he still wasn’t able to do it.
I haven’t read your original piece on UBI, but this seems like a serious red flag.
Why are you resisting our utopia???
This post is really bad, and not just by SSC standards. As I read through this I was wondering if Scott messed up a quote tag, and what I thought he wrote actually just came from Jacobin or something.
It takes only a few seconds to recognize just how silly most of his criticisms are. For example:
I don’t think Scott thought about this for even a few seconds. For example, lets ask – why is daycare expensive? The answer is that you have to pay people to care for children, and that costs money. Under a Basic Job, you pay people to provide day care – that’s one of the Basic Jobs. It’s a beneficial policy we can now provide.
Scott instead proposes paying people to sit around playing video games, which costs the same amount of money but you don’t get valuable government services like day care.
Then Scott also discusses other currently unremunerated labor that people would perform under a Basic Job (e.g. caring for the elderly and non-fraudulently disabled), and points out that under a Basic Job this labor would be lost. He’s completely ignoring the fact that these are the basic jobs! Elder care, social work, day care for children, etc.
This part of the post is almost nonsensical. It points out a lot of labor that needs to be done and then acts as if a program paying people to perform that labor will somehow prevent the labor from getting done.
To make a similarly silly claim, “we shouldn’t pay for psychologists for people with Obamacare/other social program because all the people doing psychology for free might stop and then no psychology would get done.”
(As a tangential point, Scott is completely wrong that family caretakers don’t get paid. In NY and Washington – the only states where I have firsthand knowledge – they absolutely do.)
Similarly, the Soviet comparisons are just nonsensical. Most countries pay people to provide various government services such as day care/elder care, clean parks, building infrastructure, etc. The vast majority have not descended into a Communism level disaster. Japan, Singapore, USA and the Netherlands (to name the countries I have direct knowledge of) all pay workers to do things like visit disabled/elderly/whatever people twice/week to check on them. No Stalinism yet.
As for the people who are not disabled, but who also refuse to work in a useful manner, these people will benefit from a Basic Job. The Basic Job will force them to either shape up or go hungry. That’s the whole point. If they shape up enough, they might even manage to find a real job in the private sector that provides more value than it costs. I.e., it turns some people into net producers rather than net consumers.
People whom you can trust to care for children or the elderly are not going to be the type of people who could only get employment if the government gives them a job.
Wait, so all the people who can’t find a job (e.g. poor people) are not able to care for children? In that case, should we take the children of most poor people away from them?
It depends on the alternative. The quality of care that the state offers foster children is probably below what most working parents would consider acceptable for their kids.
Most people care more for their own children than for other people’s children.
Regarding “these are the basic jobs” specifically: I tend to see a likely organizational difference between the results of basic jobs and basic income in a great deal of the labor described, though I’m not sure if that was the intended implication in the OP. Having a bunch of people working Basic Jobs (which are presumably treated as strict work-for-pay jobs, for commensurability with all other Basic Jobs) at organizations for elder care, child care, etc. doesn’t seem to me to be all that fungible with them working (and possibly rearranging a lot more of their lives, minds, hearts, etc.) to aid their own close relations. Caretaking that’s of good quality is inherently emotionally intensive, and trying to realign people’s strong social and emotional bonds to match a government jobs program is fraught. (This of course doesn’t account for the current balance of such care organizations with more direct care via social ties, but “which form of distribution of the partly-emotional labor is incentivized” is still relevant in a relative sense.)
> which are presumably treated as strict work-for-pay jobs, for commensurability with all other Basic Jobs
Why would you assume away the entire point?
If you change things, they will be different, and perhaps even better. What they will rarely be is the same.
A job guarantee, done properly, means that if you have terminal cancer, your job description is ‘go to chemotherapy’. If you are a fun person who people like to hang around with, your job description is ‘party planner’. And so on.
You can compare that to, say, a $60,000 UBI with zero stigma for relying on it. Or you can compare osme realistic policy proposal to say, a $5,000 UBI funded by welfare cuts. But it is fundamentally pointless to compare a Utopian version of one scheme to a GrimDark version of the other.
What makes you expect it’d be done properly? How can we measure if the government’s doing it properly, and how will we correct it if they aren’t?
The same way we do it for Obamacare, or Seattle’s minimum wage, or all the other existing programs. We’ll occasionally run a study and ignore the results if we don’t like them. But mostly we just won’t do anything.
This is literally how government caretaker programs in NY and WA work. You can get a job caring for the elderly and explicitly get assigned to care for your mother (or other relative). There’s paperwork and admin hassle, they verify your fitness, etc. When your mother dies they ask if you want to keep the job and want to care for other people’s mother.
The only thing that needs to change under a Basic Job program is the specific account that the paychecks you receive are drawn from.
I’ll stand partly corrected on how things currently work, then; I had never heard of these (I’m an American, but I don’t live in either of those states). Do you happen to know if programs with that same property exist in other states as well?
I only know about these from personal experience.
A quick google search suggests at least one version of this program is available in many states: https://www.payingforseniorcare.com/longtermcare/resources/cash-and-counseling-program.html
In any case, the point is that we’re discussing policy changes. Scott is claiming that a Basic Job will somehow destroy a system that we already have, and which fits perfectly into the basic job framework.
It’s good to know that all the needy people in the country are untrustworthy horrible people who will harm children and others around them.
I wish left wing types would bring this fact up more often when they talk about how we need to reduce inequality and help the poor. I feel like if more people recognized this fact, then they would be far more accepting of inequality and allowing the poor to suffer.
But you’re right, those folks can be given other basic jobs like building trails in national forests where it’s much harder to hurt innocents. If the trails don’t get built, they don’t get paid. It’s a great way to distinguish the deserving and undeserving poor.
I’d say the actual argument here is that caring for young children is actually incredibly important and difficult to do to a standard we’d be comfortable with; see https://www.nytimes.com/2018/01/09/magazine/why-are-our-most-important-teachers-paid-the-least.html and there’s already an elder-abuse problem in a fair number of homes. Care like that really ought to be paid a lot better than it is, and rather than driving down salaries by making it a guaranteed job we should drive up the effective wage of the people who do it so that we can encourage a more-skilled slice of the people with the relevant temperaments to do the work.
A non-zero number of the people who are providing the services of child / elder care are going to be people who want to victimize children / the elderly. And what’s more, if law enforcement is any example to follow, it seems the incentive would be to minimize or deny the problem & shield the perpetrators from any responsibility.
You’re right, there are pedophiles out there. We should close the *already existing* government schools because a non-zero number of the people who *already work there* might want to victimize children. And what’s more, it seems the incentive of *already existing school systems* would be to minimize or deny the problem.
Your argument also seems to imply we should close the public schools, old folks homes and senior centers.
You can fire those people. You can sue some of them. You can’t fire people from a guaranteed basic job, and the State won’t allow itself to be sued just because its incompetence traumatized your child (see, inter alia, Castle Rock v. Gonzales).
So I disagree with your assessment that Scott’s criticisms are nonsensical or silly. To me you’re saying “hypothetically, the State could do this great useful thing!” while ignoring its proven track record of doing horrible, irresponsible things and then trying desperately to cover them up and avoid any responsibility to the people hurt.
If you’re public schools, old folks homes, and senior centers are hotbeds of abuse with no recourse, yeah, you should absolutely close them. And yeah, that results in a lot of sob stories about the poor sympathetic kids/seniors who now have nowhere to go, and all the poor complicit employees who now have to find other work.
Sure you can. A Basic Job is still a job. You work effectively, you get paid. You don’t work, you don’t get paid.
And furthermore, not every single job is day care. Picking up trash by the side of the highway is also a job. If you don’t do a good job of the indoor work, you get outdoor work.
If you truly wish to exploit the system, this is your job, and you get paid when the grass is cut: http://s9.sinaimg.cn/bmiddle/002lwqRggy6FCTtkVWE68&690
I suspect most of the horrible antisocial poor people you guys are worried about will rapidly change their behavior in the face of good incentives.
“As for the people who are not disabled, but who also refuse to work in a useful manner, these people will benefit from a Basic Job. The Basic Job will force them to either shape up or go hungry.”
This is the assumption that your entire argument rests on, but I see no basis for it. A job guarantee is going to be a “paid job” guarantee, and anyone who gets fired is going to sue for their right to income.
Because we emphatically have plenty of jerks abusing the existing welfare systems, and we generally aren’t willing to let people starve, even assholes. Maybe you are, but not a democratic majority. The thing about jerks is they will take advantage of any system you offer them, and are usually able to be more clever and persistent about it than the actually disabled / needy people you want to give the benefit to. Any system tough enough to weed them out is going to weed out a lot of deserving but exhausted or crippled people.
It’s not clear to me that this is true. I think a lot of people hold mistaken ideas about what poverty really means, because the media and politicians frequently misrepresent it. That’s why I favor policies like BJ which automatically make these distinctions.
Similarly, if we implement Nazi concentration camps but label them “Basic Income”, “Basic Income” is also a bad policy. But in general, consider the argument: “If we implement policy X and call it policy Y, that would be bad, so we shouldn’t implement policy Y.”
I can make that argument against literally any policy. It’s an argument that proves too much.
This makes zero sense. If there is no abuse of the current system, then much of the justification for basic jobs goes away – most of the people who aren’t working, either can’t, or they will once a private sector job opens up, and we might as well just give them their benefits.
Your last two paragraphs are an uncharitable non sequitur. There is no reason “Basic Income” would lead to “Nazi concentration camp”. I am saying “guaranteed job you can’t be fired from and can’t have pay withheld from” is the inevitable result of a Basic Jobs program, because that’s kind of the whole point of the political drive to create them in the first place. We have compulsory education, and we emphatically don’t kick out the people who refuse to “shape up”, resulting in a ton of misery. You need to explain why Basic Jobs would be any different.
The whole point of the Basic Jobs program is to provide a welfare program to the otherwise unemployable. If you’re okay with letting a bunch of people “shape up or starve” you wouldn’t be creating a basic jobs program in the first place.
There clearly is abuse. A Basic Job is one tool to reduce it. Cracking down on disability fraud (which is rampant, as Scott notes) is another.
It seems like you’re saying that the political system is unable to provide anything other than a basic income, and other policies will be subverted by the deep state into becoming a basic income in disguise. Is this a fair summary?
I can’t say I disagree.
I’m accepting the standard left wing claim that some good people fall through the cracks, find their skills not matching the market, and just need help. I’m proposing a program to help these people. I want to design it in a way that it weeds out the the lazy bums who refuse to work.
I’m very surprised that this idea is so controversial.
@stucchio
You are proposing a bunch of jobs provided by the government that don’t necessarily employ all the people who are able to work (if they aren’t actually willing, or turn out to be abusive), and doesn’t necessarily employ all the people who are willing to work (if they aren’t emotionally capable of handling any job properly). What you are proposing then, is not a Job Guarantee, but a Government Work Program.
1) I believe that one of the benefits of the conservative/libertarian model of rely-on-charity-instead-of-the-government is that it provides a lot more discretion and local knowledge about a person’s circumstances to be taken into consideration. This results in less predictable outcomes, but probably faster/easier ones.
2) Why should we even attempt to address people who’s net utility is negative? Why bother to override natural selection and the laws of thermodynamics? Why is it more moral to take money from people who have earned it by providing something valuable and give it to the person camping/defecating in public streets, spreading Hep-A, and yelling “Grrrr” instead of spending $0.25 on a bullet to the head and a few hundred on a discount cremation?
Expounding on the advantages to charity/mutual aid/civil society institutions compared to state charity:
*Being closer to donors creates incentives for donees to behave better with their charity, as they’re more likely to not want to disappoint the people helping them that they more closely interact with.
*Being closer to donees creates incentives for donors to be judicious in their charity, as they can more easily see if their charity is being taken advantage of and they have a stronger interest in their aid being effective compared to impersonal bureaucracies.
*Mutual aid societies didn’t just provide care, they worked on instilling important values like thrift, hard work, and conscientiousness. There was more of a focus on hand-ups rather than hand-outs, with effort to obviate the need for charity.
*Mutual aid societies create reciprocity, so those who are helped at one moment in time will help out others when they need help. This creates stronger communities and provides a boost to the soul; no one is consistently a taker, with everyone giving as well as receiving.
*It’s more moral for people to provide assistance voluntarily rather than using physical threats to induce assistance.
Regarding point 2: Probably because we still have some of the values of Christianity embedded in our moral culture, even if we’re mostly post-Christian? And whenever people just let other people die when we could, as a society, save them, most people find it morally repulsive?
Not sure you’ve got the causality right.
A widely-popular religion says “love thy neighbour” => We don’t like the thought of other people suffering and dying when we could help them
or
We don’t like the thought of other people suffering and dying when we could help them => A widely-popular religion says “love thy neighbour”
If nothing else, I reckon there are many cultures that are neither Christian nor post-Christian that nevertheless value charity and compassion.
Fair enough, though I am less comfortable with an answer to “why not just kill the homeless guy?” that goes something like “because it goes against our moral intuitions,” than almost any coherent religious explanation that sounds less arbitrary. Probably because it offers less resistance to some psychopathic leader saying “but my moral intuition is that a million deaths is just a statistic.”
It certainly does, but I don’t think it actually is any less arbitrary. (Of course, followers of one particular religion will believe that its moral rules are not at all arbitrary, and I respect that, but they probably will regard other religions’ rules as being somewhat arbitrary.)
Indeed, but it offers more resistance to some psychopathic leader saying “but my interpretation of my religion says that killing these people is doing God’s work.”
In my opinion (and I think this is backed up historically) it’s easier to persuade people that “our” religion tells us to do this horrific act than that “our” evolved moral intuitions tell us to do this horrific act.
Ah, there’s the SSC comment section I know and love.
Why is our go-to example for basic job program empiricism “kolkhozes”, and not the Public Works Administration or even the Civilian Conservation Corps? Sarris even mentions both in his article. They weren’t Universal Basic Jobs and they weren’t without flaws, but a few million people in a government jobs program for years ought to be an obvious history to mine for empirical results.
It sounded like the Obama administration wanted to restore a program like that, but got caught up in red tape and zoning regulations. It seems like things like that are fine if you can get the projects through all the levels of bureaucracy, but also don’t address the least able members of society, and are therefore a different kind of enterprise than a job guarantee.
Those programs operated in an era where there were many fewer environmental and work regulations and the entire economy basically collapsed, leaving a ton of able bodied, willing to work people with no other options.
Today, the Hoover Dam would never get past the planning stages. Environmental groups would sue. Unions, whose workers would be displaced by the Basic Job Corps, would sue. If it ever got started, OSHA would shut it down in a heartbeat.
I was a gifted music student who was put on psych disability decades ago. A few years ago I realized the disability was all done fraudulently. This means I lived as “disabled” for decades when I didn’t have to. I only wish that I had known sooner.
If this had happened to me, then I knew in my heart that there were others. And others have indeed approached me. Decades lost, they said, just like me. They have told me, “Me too.”
Now what? We cannot take back what happened. We can only forge forward, and do what we can. I am employed now. I can tell you the main barriers after all the years I spent unemployed were age discrimination and the cataracts I developed. During the time I was “disabled” I earned my bachelor’s and master’s with high honors (against medical advice, of course) and my doctors continued to insist I was severely mentally ill! What a shame! I wonder who the crazy ones really were!
I have come to conclude whoever is “crazy” has nothing to do with anything in the brain at all. Those in power determine who is “crazy.” In general, those in captivity, or those who are not in power are called crazy, for obvious reasons, so that their rights can continue to be denied,and so that those in power can remain in power.
Great for you, but I know several people who really can’t work and have nothing more to prove that than a doctor’s psych diagnosis. How do we make a policy that distinguishes you from them to the bureaucrats that need to administer such a system.
This is a problem for any system that needs to decide who really needs the benefits. There will always be false rejects (genuinely disabled people refused benefits because debilitating lower back pain doesn’t show up on an MRI) and false accepts (lazy people who’d rather collect a disability check than work).
UBI solves that by dispensing with the process of deciding who gets benefits. But then there are at least two additional problems created:
a. The program costs a whole lot more, because you give it to everyone instead of only to people who can pass your decision process. You’re effectively taking money from all taxpayers and giving it to all citizens, but the way taxes work, that’s going to raise taxes at the top by quite a bit.
b. Its not clear how many people would decide not to work at all, if they could collect disability checks without having to get through that decision process, and without even having to lie or break the law.
For (a), there’s no way around the idea that this will be a really big program. It will mostly not be the government spending money, just moving it around, but that will still raise taxes quite a bit on current net-federal-taxpayers. The bottom tier of net-taxpayers will get enough UBI to offset their higher taxes, but lots and lots of people will be looking at their taxes going up $30K and getting an extra $10K in UBI payments.
For (b), markets work pretty well at solving this kind of problem. Wages will rise until enough employees can be found. But you can imagine people living on their UBI for their whole early adult life and never acquiring the basic skills needed to keep a job (I’m thinking basic stuff like showing up to work every day), and at some point, it’s probably *really* hard for them to enter the workforce.
There’s also this social problem: at least the subset of middle-class white culture I grew up in involves defining yourself by your job, and getting a lot of your social status and contact and daily interactions that way. If we somehow went overnight from 60% of adults in the workforce to 30%, I could imagine that creating *massive* social problems as lots of people stopped working and more-or-less came unmoored. I’m not sure this would happen, but I’d like some evidence about how likely it is.
“at least the subset of middle-class white culture I grew up in involves defining yourself by your job”
This is true. But why should we assume it’s a good thing worth keeping? And anyway, if quitting your job is so horrible for middle class people, then few of them would quit, and your problem b) mostly goes away.
gbdub:
Why should we have a lot of confidence that we can replace that culture with something new from the outside, and actually make things better? ISTM that the Coming Apart phenomenon makes a pretty good case for how this sort of thing can go really badly.
I agree with GDub in questioning whether this identification of identity with job is even a beneficial thing? I can see being proud of skills, and hard work put in to accquire these skills, but jobs are transitory and only one of many facets that make up our identity. Why not spread that out to identifying as a good parent? An athlete? A community leader? Etc…I always felt like using your job as a personality identifier was a bit of a cop out, and in the case of job loss or family neglect, a potential psychological problem
Would you be willing to provide more details? From the experience of folks I’ve dealt with, getting disability for psychiatric reasons this is not an easy thing to do and maintain, especially if you are able to accomplish something like successfully pursuing higher education.
And, where was the incentive for this to continue? I can understand the financial incentives for parents to falsely claim that their children have some form of disability in order to get benefits, monetary or otherwise. But not for people as adults who don’t feel disabled from being able to do so.
An additional consideration for critics who think this will collapse production:
It is my observation that people who don’t want to work succeed in not working, with or without a job. The whole “20% of the people do 80% of the work” thing.
Even assuming half the population dropped out of the workforce, are we actually any worse off? People applying for a job are more likely to be the sort of person who will actually do it. It will be easier for those willing to work to get a job, it will be easier for companies to hire willing workers, it will be easier to manage that workforce.
And you can more easily pay people more, since you can employ fewer people for the same tasks.
Even assuming half the population dropped out of the workforce, are we actually any worse off?
You are if you can’t get the still employed to buy into your system.
I consider myself a libertarian leaning toward anarcho-capitalism and you’ve just about got me convinced that UBI would be a good thing. The biggest problem I see with it is it only takes one well-publicized case of someone suffering or dying because they couldn’t afford food or medical care despite being on UBI before we bring back welfare. Then we have UBI on top of food stamps and medicare not instead of them, and the economy collapses.
My thoughts exactly. Even if this is the best policy in the world, how does it ever pass? How does it survive 24 hours after passing?
One person spends all their UBI on lottery tickets. One person has 12 kids and can’t afford to feed all them on UBI, so how is it fair that they get the same as everyone else? Thinkpieces (written by well-to-do, educated people living in the most expensive cities in the world) appear in all the media about how UBI isn’t really livable; or it’s racist somehow. There are already frequent calls for drug-testing welfare recipients, despite the fact that programs like SNAP ostensibly go to feed their poor, starving children rather than being some sort of reward for good behavior.
How do you preserve political support when the media obediently bleat out this parade of horribles on endless repeat?
“The biggest problem I see with it is it only takes one well-publicized case of someone suffering or dying because they couldn’t afford food or medical care despite being on UBI before we bring back welfare”
Are you sure this is how things work? People die from not being able to afford health care a lot, but we still don’t have universal health care.
We do have some kind of weak version that prevents extremely poor people from literally dying on the street, but UBI would cover that too.
“We do have some kind of weak version that prevents extremely poor people from literally dying on the street, but UBI would cover that too.”
I think my problem with UBI is I’m not sure it does cover that too. The only way UBI is remotely fiscally viable is if it replaces existing welfare programs like medicare and medicaid. But then what do you do with someone who’s spent all their UBI and is dying in the street?
After thinking about it for a few minutes the obvious solution that jumps out is to garnish their UBI, or a part of it, until their medical bills are paid. You could do something similar with food if you had to but now you’re building more complexity and bureaucracy into it. I feel like that could raise other problems. Still, it’s a solution I didn’t think of when I made my original comment.
Also I’m not as familiar with the medical system as you are, obviously, so it’s entirely possible I’m misunderstanding something fundamental about the entire situation. Probably more people die on the street under our current system than I appreciate. Overall I would say a UBI has some problems but it’s probably a net improvement over our current system of welfare. If we’re going to use force to redistribute wealth, we might as well be efficient about it.
It certainly allows back in a a degree of personal responsibility in managing one’s resources, which is a rather right wing/Libertarian mindset, I would think.
Would you expect UBI to replace in-kind benefits like EMTLA? If not, do you see a movement to provide similar benefits via regulation while still being able to claim that only the UBI is being used for benefits?
This post seems like an extended meditation on Hayek’s quote, “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”
A basic jobs program has a lot more designing than a basic income program, with all the risks and unintended consequences that entails.
No? Feeding people is filling a fundamental basic need for them. When I worked fast food a lack of meaning was never one of the issues I had. That was real work that real people really wanted done.
If that job was avalible with a $10,000 subsidy and a guarantee that all my coworkers would be people who wanted to be there rather than the miserable and desperate, you better believe I would be leaving the ridiculous little hell that is this office.
Wouldnt people be better off buying healthier food from the market over fast food? I understand that feeding people is more immediately useful than clacking at a keyboard, but if thats the case, its the farmers that get the credit, is it not?
vOv
I never beat the feelings that i feel with raional arguments so i dont think you’ll have much luck, but carry on if you want.
See I currently work it, and while I do understand that I wouldn’t be there if this wasn’t a thing people wanted done if anything that makes me hate myself and my job more for being complicit in feeding people this absolute garbage. I can’t emphasise how disappointed I am perpetually that people willingly queue up, purchase and consume the fat-laden, calorie-filled, sugary muck we churn out on a daily basis. For Christ’s sake some of them come here every day to feed their kids.
It’s been highlighted that much more strongly since my country’s government decided to introduce a tax on sugary drinks, which has only fallen on the regular coke. Dozens and dozens of people just order it anyway, paying no mind at all to the increased cost. Sure it’s a negilgable amount but working there and watching it happen just kind of brings home how little these people even care about their own health.
TL;DR: I may be being uncharitable but I don’t understand how you can find any dignity in selling ignorant people poisonous filth to shovel into their faces.
If it were poisonous they wouldn’t survive to come back.
What you mean is “selling people food less good for them than the food you think they should be eating.”
I’m one of those “UBI will destroy us all” folks.
I feel like a long time ago we got away from savagery by building a machine I’ll shorthand as the Little Red Hen. LRH means that you get the rewards of your work, or whatever other arrangement you have agreed to. Call it responsibility, or capitalism, or whatever. But the point is coupling folks happiness to their performance.
Bandits want to destroy this arrangement because they don’t want to have to give value to get happiness. And history has been a long rear guard action against them. But this is a threat from the other side, folks arguing that OTHER PEOPLE shouldn’t have to perform to receive their joy.
First off, I suspect false flag. “I am totally a productive person and I sure would love to make the system such that folks like me pay for people smart enough to take advantage of us.” makes me want to know what that person produces. But that might be uncharitable. I’m reasonably sure that OP has the job he has described, and this seems to be his earnest position.
That leads me to my fear. I feel like if you break the Little Red Hen machine, we have nothing to replace it. We have partially broken it a bunch of times in the past, every time with disastrous results. Agreeing to pay those who ‘couldn’t’ work incents folks to fake it, etc. But the proposal you are making is to explicitly take the engine out of our car.
And, like, once you do that, where are we gonna go? Like, imagine me in a capitalist top hat sneering down my monacle at the poor…now I am putting all that aside and asking you as a fellow technician, how will this work?
I have personal familiarity with Cold Stone Ice Cream, so let’s use that as a shorthand for a zillion other places like it.
Cold Stone:
1: Is a boon to customers.
2: Is entirely dependent on labor that would rather not work there and get paid basically nothing.
You used McDonalds for an example, same principle.
So, Ok, on Friday you pass this. You go to all the young ladies of Cold Stone and give them their 20k for the year. They quit. Now where do you get your ice cream?
In your McDonalds example you pointed out that they might invent ice cream serving robots. That won’t happen. You said the alternative was that they raise wages in a desperate attempt to lure their workers back. Again, won’t happen. Profits aren’t NEARLY enough to pay people to work in a Cold Stone if they already have their subsistence met.
They will close. The franchiser will lose his shirt, and the ice cream store will close.
So now we can’t buy ice cream (go to the gas station, get our hair cut, whatever). No problem, we all have our basic income money, or for us poor saps who still work, our job money. But what can it buy? The businesses that can’t afford to invent robots are being driven under
Are they going to reopen and pay their workers more once we are all willing to pay more for ice cream? Because, as the worker who has the same money before and after this shit, that doesn’t make me terribly happy. It kinda looks like prices for everything will shoot up so that they can afford to lure the UBI folks to work these jobs.
With UBI, you still have the machine. People still get paid for working, they just get paid something for not working. So if you want to live in small town Idaho and buy cheap food and do nothing you can. But if you want to live in a large town in Idaho and order pizza delivery, or go out to get beer and barbeque you need to do something useful like working as a teacher or in an office. And if you want to live in NY or Bay Area, you would need to work a high paying job. Its not like under UBI the gov is paying people to do nothing and live in NY. The people who want the world still have to work for it.
My worry is that I live in small town idaho, and want to buy cheap food and do nothing, sounds fine, but I won’t be able to.
I cash in my UBI check, and head over to the liquor store. But it is out of business, because the guys who used to work there quit, since the UBI pays just as much and gives them forty hours a week of their life back.
My UBI is only enough, per Quixote’s example, to buy ‘cheap food’, but selling cheap food is a business model that needs cheap labor, cheap facilities, the whole nine yards. But increasing the money supply is making the facility more expensive, and the labor now competes with UBI, so that is more expensive too, etc.
Maybe this is too esoteric. You mention small town Idaho. Ok. I come from there (or rather, another inland state small town area). The town revolves around Wal Mart, which ABSOLUTELY depends on cheap labor. How does that work? UBI folks flock to towns even as small businesses and big chains pull out of them?
Wal Mart is already increasing numbers of self -serve checkouts. Using your Cold Stone example, I can compare the various self -serve yogurt stores that have popped up in recent years in my area. 1 employee, sometimes 2 in the store front, to re-fill machines, toppings, and take payments/keep things orderly. Whose to say cold stone couldnt morph into that, except for hard ice cream? Most locations I know only have 2 or 3 peeps working there at a time anyways. Many cheap , fast eateries have a strong automation potential as the tech becomes more and more refined. Even if Mc Donalds lacks a robot division, all it takes is a robot making entrepreneur to offer Mickey D’s the robot workforce of the future and they will take it. Workers are also customers, so prices will have to remain low enough to entice people to buy Burgers, and as the US workforce in general shrinks, where will this income come from?
Apropos of your post.
Cold Stone Ice Cream would raise prices like 20% to compensate for the new labor costs, and they’d get away with it, because their competitors at Frozen Rock Ice Cream would have to do the same, being equally fucked for low-wage labor. Their new employee class would still be able to afford the product, thanks to the extra $20k in their pockets. As supply and demand models go, it’s a really really simplistic one; not that hard to follow.
Nearly everything in any capitalist economy is already predicated on that reliably happening! You might as well be concerned about suffocating because the air molecules around you all bounce in the wrong direction.
But I’ll tell you what, it gets better. If you did somehow find yourself in small-town Idaho without a liquor store.. you could OPEN THE ONLY LIQUOR STORE IN TOWN. Does *that* at least sound like a good deal?
What, stump up a bunch of capital to buy a store, stock it, sell liquor to UBI people and hope that it makes enough money to afford more stock? Why bother when I could just buy cheap brewing equipment and drink home brew instead? Hell I could even set up a still, assuming I can hide it from the cops of course.
20k lol?
8 hours a day 365 days a year gets you 20k if you’re on minimum wage. before tax. (if american minimum wage rate is $7.25)
This isn’t a big deal, but the tranquilizers graph appears to be in terms of numbers of people, not taking into account increasing population, which is… suspicious. And it doesn’t stretch back to the 1970s, which makes me wonder at how relevant it is. It doesn’t actually address the concern, maybe there was a drop in per person tranquilizer use between the 1970s and 2000. I wouldn’t be surprised if you were entirely right, but that would still make it a bad argument for a correct idea. All in all it feels deceptive, not up to par with the usual kind of arguing in this blog.
The post as a whole is excellent as usual, thank you!
The number of tranquilizer events increased 7x during that ten year period. The US population increased 1.1x.
I trust people to be able to figure out extremely obvious things. Please don’t make me spend a half hour redesigning graphs because you can’t figure out whether a 600% change is more or less than a 10% change.
We do not have to choose between one and the other, there might be a UBI just there on the poverty level and an extra level of guaranteed jobs for people who just want to work and make some more money. Couple this with a child rearing money (not too much so that we’ll make sure people will not be incentivized to make 10 babies and live off that money) and we’re good.
So after that introduction; (1) firstly there can be jobs for all kinds of disabled people except for the ones that are so disabled that the bureucracy will not take long (oh, he has neither of the 5 senses nor any of the 4 limbs) and faking it will be nearly impossible. If you are blind, you can receive phone calls. If you are paralyzed from the waist down, you can train AI by doing captchas. If you are deaf, you can swing a pickaxe. If you are good some days and bad some days then you can work on your good days. And if you don’t want to work at all, there’s still the minimal UBI to fall back on.
(2) For caretaking as well, you can take care of somebody and get reimbursed through their universal basic insurance (what are we without that, barbarians?) in addition to the minimal UBI. If it doesn’t take your all day you can still part time work on the universal job and get paid extra.
(3) For parents as I already said some fixed amount of money per month per baby/child. Not so little that it will screw people over, not so much that people will just procreate like rabbits. Something like a fixed fraction of the minimal UBI.
(4) I am envisioning to put a sizeable portion of these jobs in the middle of nowhere working in a construction yard or offices of that improving the infrastructure of the country. People will live (bunkers, meals, uniforms etc supplied by the employer) on the premises so if they cannot afford a universal job which needs extra clothes or a car etc you can just take those ones and since you will not be spending any money on fixed expenses you can even save more money.
(5 and 6) For all the crappy employees, well how bad can one screw up living next to the construction yard, waking up with everybody going to breakfast mess and then work, and swing a pickaxe? I mean not every job would be like this but this is like the bare minimum. If one is not good enough for this, than that person is probably disabled or belongs to a kind of institution.
(7) everybody can ask for a rotation and get it granted. So if the boss at the ditch digging facility in coyoteshit, montana is an asshole and you want to move, you can. In turn, this rotation requests data can be used to assess bosses and demote/fire them so they will not behave like assholes. And still, if nothing works out, you can still fall back to minimal UBI.
(8) I am not thinking to put these people to work where they will challenge private companies (except maybe for private companies abusing their monopoly). So if it is not profitable for the private industry to fix the infrastructure we will do it.
(9) if you do not want to spend your entire day doing these, you can fall back to minimal UBI and improve yourself on your free time. Better yet, you can take the half day working part time program and still have some more money over the minimal UBI, and have time to improve yourself. Even better yet, there are on the job training courses that you can improve about the thing you are doing if you’re interested. One can rise through the ranks.
(10) we still have minimal UBI so everybody is still on the same side.
(11) we still have minimal UBI so if one does not wish to work then one does not have to.
of course there will be universal healthcare that includes everything. I do not know what is wrong with you american people.
one thing that might be problem in all 3 (UBI, basic jobs, my hybrid approach) is that poverty probably keeps prices of some stuff down since not many people can afford those items. If all poverty is eradicated some inflation should be expected but if that is the price to pay to solve poverty and a lot more social and infrastructural problems on the way, then so be it.
I love hybrid solutions.
Okay, I’m leery of UBI for reasons I already mentioned in another comments thread here: if UBI becomes a sizable hunk of the population’s primary or sole source of income, those people will become essentially a net negative from the perspective of the rest of the human race, who will then be highly incentivized to annihilate them. That problem is tied into the whole technological unemployment deal.
However, a lot of our perspectives about jobs vs UBI seem tied into our bizarre tendency to place disproportionate emphasis on shirking, thieving, idling, what have you. I’m not sure why, but a huge chunk of America is simply enraged by the thought that somebody might make money by dishonest means, to the point where they’ll behave in decidedly irrational ways. Hence the welfare office makes people go through an extended, expensive, punitive process to PROVE that they “really need” that money. At least, the office in my part of Florida does. I’ve worked there. Not going into all the details here, but you can lose whole days sitting around the office waiting in line, providing documentation, going through interviews, etc. And the end payoff is pitiful, something less than $200 per person per month. Going to the welfare office is a variant on working for slightly better than minimum wage a couple of days a month, and you can only spend the money on food, and the workplace is depressing, and there’s no chance of promotion, ever. It’s not even worth defrauding, unless you run a (rare) organized ring exploiting several dozen ignorant illegals. Not what most people are scared of. But everyone’s convinced the system is being robbed blind by people in Lexuses.
The flip side of this is people who put extravagant effort into being really pitiful shysters. More than once, I’ve run into people who hang around trying to pull cons on random passersby. These cons, again, work out to less than minimum wage even assuming an implausible success rate. It’s a pathetically inefficient way to earn money, and I assume the thrill of suckering people is its main appeal. I don’t resent these people, even though they got me more than once because I wrongly assumed that nobody was actually lame enough to defraud for that little a payoff. I feel kind of bad for them, reduced to hanging around gas stations pretending they’re out of cash. Other people, apparently, are outraged by their existence. None of this makes sense in terms of cost-benefit analysis, it’s just something rooted in our brains where we dread being defrauded in any way, for any reason, to any extent, ever.
I don’t think the real thieves will go away, because like I said, they seem to like the idea of swindling in spite of all reason. But if we can get rid of the pathetic spectacle of the welfare office, even if they’re still only getting $200 worth of groceries a month by asking for it and providing minimal credentials–leaving the “universal” bit aside for a while–we’d probably save money in the form of man-hours wasted on paranoia and bureaucracy. You’d see more applicants, but also a lot less overhead. It’d balance out, I think. Call it a subsidy for grocery stores if you like.
There has been a universal employment trial in a Finnish town Paltamo, which lasted 3 or 4 years. Apparently it costed the government more than just paying unemployment subsidies, and they found that undesirable.
re: Disability rising and experts expect it to continue — can I get a cite? Your chart seems very outdated.
http://ssab.gov/Details-Page/ArticleID/1107/Disability-Chartbook-Chapter-5-Beneficiaries
Chart 2 here for instance shows disability claims that rose somewhat, but that turn at the end makes me sceptical of anyone saying they know where claims are headed.
Now — if you are merely talking absolute claims, not as a portion of pop/insured pop — then okay, but you should realize you’re talking about something meaningless. Absolute claims could rise and the program could still shrink away to meaninglessness if pop grows faster.
Regardless — disability claims rising in the aftermath of a recession is not shocking. Nor is their rising as pop grows, nor is their rising as women become insured (after entering workforce).
I would describe myself as mildly disappointed by the level of evidence in this section of the piece.
CCC is a good historical example, though it also reveals some problems–the work can be awfully rough on the body, especially if you’re older and creakier to begin with, and pretty rough on family life as well if you happen to be living in a work camp thirty miles up the Hassayampa as CCC crews often did. Remote Forest Service duty stations have trouble filling entry-level positions even today.
Not sure that I buy this, see e.g. here.
(This specific point is actually discussed reasonably well in Scott’s link, but it’s probably the best pull quote from Ted’s piece.).
Scott, basic income just raising rents is a real problem.
Your argument is good, but it’s also easy to just solve the problem _and_ finance your basic income as the same time:
Collect a land value tax and distribute the proceeds equally amongst residents.
That automatically sets the level of basic income as well without politicised levers to pull. The only real decision is on what level to aggregate (eg county, state, country?).
For an individual to get a net payment out of the system, they just have to use less land by value than the average person. (That includes consuming products that use less land in their making.) Your hypothetically rural dweller caring for their parents would be a good candidate. The programmer living and working in downtown San Francisco would most likely be a net payer: but not that they would notice any change, because their rent would stay the same.
(Zoning reform would help, too. But that’s an independent change.)
> 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.
I can’t see that ever being politically feasible. You’ll be called a racist and aristocrat for suggesting to wind down such a subsidy. It’s going to be “wound down” if and only if the government goes broke, and then suddenly.
Given, the basic jobs failure isn’t immune from that either. I don’t think winding down basic income is safe at all.
That being said, it would be interesting to see a single state try to implement UBI as an actual sustenance way, rather than the level at which Alaska does it. Alaska also isn’t super great as an experiment, either; it’s simply too remote. People aren’t going to make decisions about moving to/from Alaska based on this policy. Try it in, say, NY, or Oregon, or Illinois and people in the surrounding states, particularly those who commute to the major metro areas on the border, can provide good data.
For min wage the Govt just left the amount the same for decades. Inflation means you can leave the benefit exactly the same and it becomes meaningless. $10,000 is a pittance today, but if you look at the inflation adjusted value of $10k in the 1980s or 1970s is falls into normal tax credit numbers in today’s dollars. So winding down a UBI is as simple as refusing to adjust for inflation. Only nerds would realize that you were cost-of-living adjusting at 1% when inflation target was 2%.
It could be feasible to freeze the adjustments to the program in cases of a massive lack of tax revenue, say in a depression , but to do so on a long term basis would be damaging, I would think, and lead to a resurgence in the issues a UBI proports to address
If the government had any good ideas for millions of jobs that anyone could do that would be valuable to society, nothing is stopping them from posting them on job sites.
But that isn’t what will happen – only with threatening people with taking away their medical benefits and pressing poor people into indentured servitude will the government fill these jobs.
During the Great Recession, Obama eventually realized that very, very few projects are “shovel ready.” In fact, hardly anyone uses shovels at all. We can clearly see from the cost disease article that even repairing bridges is mostly lawyers and permits. Concrete and labor aren’t costing hundreds of millions of dollars.
“Guaranteed” jobs are going to be hard to fill stuff like lumberjacks, call center employees, truck drivers, warehouse package sorters, fishermen, or meat processors. And companies in those industries that don’t lay off all their existing employees and switch to guaranteed workers will go bankrupt.
This is a terrible idea. Basic income >>> basic jobs. Because we all trust the govt to dispense $10,000. Nobody trusts the govt to centrally manage employment for poor and vulnerable populations.
Finally, I’ll close with this: Why does this proposal by Democrats dovetail perfectly with Trump’s work for benefits policy? Are there still two parties? Hard to tell.
Scott, you mention aristocrats as a group who seem to flourish without needing to work for a living, and cherrypick a lot of great examples, but surely you’re aware of the phenomenon of corrupt wastrel layabout aristocrats too. It’s at least perceived as common enough that today, parents who have enough money that their kids don’t ever have to work typically spend a good deal of time and effort devising constraints on the kids’ ability to access their inheritances so that they don’t become corrupt wastrel layabouts. Do you think the perception of commonness is incorrect? Are the parents worried for no reason? Note too, as other commenters have, that these parents are much more capable of instilling responsibility and work ethic in their kids than the typical parents of those who might depend on a large UBI.
This is one of many reasons why I think we should start with a very small, Alaska-fund sort of level of UBI, plus a child allowance for primary caregivers of young kids, and see how that goes for awhile before taking up the question of an increased UBI level. Other reasons:
— that’s already a very expensive difficult thing to get people to agree to; if you can’t get there first you’ll never get to a “full” UBI and even getting there is going to take decades
— it has none of the feared downsides of a “full” UBI and the same simplicity of a pure, easily administered cash transfer (primary caregivership of young kids being one of the few classes that you can establish membership in with relatively little complication and fraud through existing mechanisms)
— it combines policies that have been shown to work fine elsewhere (Alaska, the European countries that have child allowances)
— it will get you a good deal of the benefit of a “full” UBI. Contra other commenters who claim that “a low UBI might as well be no UBI,” marginal changes here can make a big difference to lots of people by marginally decreasing their burn rate in unemployment. There’s a whole spectrum between “have no savings, cannot leave job for even a week and still pay bills” and “have enough money to go do something else indefinitely.” For any smallish N there are folks who could better themselves, get out of a shitty job or relationship situation, etc if only they could make their existing resources last N months, but right now they only have enough to last N-1. A very small UBI can still give them that last month and thereby change their lives.
Perhaps this can also be billed as a replacement to unemployment insurance, particularly if this is to heppen first at one or two test states. It gets rid of a whole ton of bureaucracy. It can be pitched as being revenue-neutral. Steps would be:
– get rid of unemployment insurance tax
– raise state income tax by the same amount
– close down the unemployment insurance bureaucracy
– start cutting everyone checks for their partial UBI
I’m not sure if the numbers add up for this to work. But I think it’s an easier sell to libertarian-leaning types.
I strongly agree with your idea of starting small, rather than jumping in too deep with the UBI experiment, but I disagree with your using of Rich Parents as a semi-comparison for the need to address bad habits developed by those that may be recepient of a small UBI. For starters, the wealthy can indulge in far more superflous activity and not be in danger of starvation or stripping of basic necessities than the less well off, so the need for these parents to control kid’s access to funds is quite acute. In the case of the less well off, the gravity of a mis-spending of their UBI funds is of the sort that would allow people to sink or swim more on their own merit or life-learning , as they would be given the privilege of UBI with the responsibility of utilizing it wisely, but lacking the fall-back of the extremely wealthy, as the UBI is in essence, the fall-back. Use that up, and whats left?
Has the rate of disabled former-workers doubled, or just the number?
(The graph is minimal and I don’t see a link to a source, so I can’t tell if it includes retirees in “former workers”, or if it’s purely working-age SSDI recipients or what.
But even if it’s the latter, did the size of the pool change in those 20-plus years?)
Most males of reproductive age engage in status games, mainly to attract females. Status is correlated with wealth, but above a certain level, it becomes zero-sum. In modern societies, status is primarily obtained by working.
Schoolchildren, most homemakers and most retirees don’t try to attract females for biological reasons. Aristocrats get arranged marriages according to their own status system and attract lower-class females by showing off their wealth. Hunter-gatherers do perform hard, risky and productive work, even if it only takes them a few hours per day. They are happy about it because they are evolutionary adapted to it. Male college students who aren’t particularly beautiful or star athletes or something are unhappy. You are indeed a weird asexual with four or so girlfriends who gets most of his status by writing blog posts, which is also work.
Universal basic income wouldn’t provide any zero-sum status, but neither subtract it, because everybody would get it. Basic jobs would be lower status compared to the real jobs, but could allow some internal competition that creates its own status system, which could be used by males to establish hierarchies in a socially acceptable way. I’m assuming here that the high-end basic jobs would be productive to some extent, while the low-end basic jobs would be something like Japanese high school, but for adults. If they were more like DC high school, then men would resort to anti-social ways of establishing hierarchies, like many teenage and unemployed males in DC already do.
Wait, is your argument that retirees are mostly female (which is true, but male retirees don’t seem noticeably less happy) or that male retirees aren’t interested in sex? The latter seems hard to square with the four-billion-dollar erectile dysfunction medication industry, and very unlikely from an evolutionary perspective.
Well, they may be interested to some extent, but not very able to attract fertile-aged females anyway, and their sexual drives are scaled down accordingly so they aren’t particularly unhappy about it.
From the charts that I was able to google it looks like in men testosterone level peaks in their 30s, while in their 60-70s it falls to teenage levels. Teenage males are interested in sex, but they are often more interested in playing games.
EDIT: also, male retirees already have accumulated status that can be used to attract some lower-status females on the margin.
Teenage males are often quite horny, but the awkwardness of those years makes games more desirable and accessible than women, despite often ramped up sex drives. Granted, ive had some varying health issues in my adulthood, but my pure “horniness” was higher at 18-20 than now (28) , but I am also more confident and expereinced now.
Are you seriously arguing that men in their 30s are hornier than teenage boys? I’m a man approaching my late 20s with memories of being a teenage boy, and unless something is going to drastically change in the next couple of years, that idea seems utterly preposterous.
I think the takeaway from that data should be that testosterone levels are a very poor proxy measure for horniness.
To extend: in the previous link thread there was a discussion about Haredi Jewish men who receive a stipend from the Israeli government to study the Talmud. Not to become Rabbis, just to study it for personal erudition, which is apparently considered the sexiest thing by Haredi women.
Maybe, for Voldemort reasons, this specific thing could work only for Jews, but for other groups it could be playing basketball, or Starcraft, or music, or anything else that rewards talent and effort with a broad range of easily observable performance levels. The guy who shouts “GRAAAAGH” would be still sitting in his cardboard box, outside the system, but for everybody else who can attain a minimum level of performance at anything this could be way of decoupling income from productive economic activity while maintaining status hierarchies.
Sometime back I mentioned a series of novels by Carl Gallagher, of which the first is Torchship. Part of the plot of the third involves the breakdown of a society where a sizable part of the population is living on a UBI and entertaining itself with computer games.
Sounds a lot like my pet dystopian vision of UBI future where you get UBI but only in exchange for getting enough points by playing the specific MMO, which amounts to ~40 hrs/week of computer gaming, with Pokemon-GO adjusted reality elements.
AR elements keep the population minimally fit and matchmade with opposite sex. 40 hrs/week of gaming prevent them from loitering and property destruction so that the working part of the society can get things done.
This illustrates the point that hierarchies arise in almost every milleu, and if it isnt based on jobs, it would be something else. Any school teacher or youth coach could verify this quite strongly.
But without some kind of authoritative recognition, would those hierarchies be pro-social or would them be “Lord of the Flies”-style antisocial systems that reward being the biggest asshole?
I think it would raise the bar significantly for men to count as impressive enough to get female attention. Already young men are kind of useless. No middle class people want to have kids at age 20 anymore, so their value as a breadwinner is nil. What if no one ever wants a breadwinner ever again because of UBI?
We can sit here and fantasize about alternative arrangements. Like, what if people liked each other for their personalities? That’s cool in a Disney movie, but for 99.9999% of human history, getting sh!t done has been a large part of what makes males attractive. An excess of leisure time has never been a prized male aesthetic in any trope.
Among the women I know, volunteering, playing instruments, writing philosophy papers, backpacking in the forest, leading events, and many other non-job things count as worthwhile activities and are attractive. It’s already unattractive for men to just play video games and watch porn in their free time, no matter what job they hold — that probably won’t change too much.
Volunteering is potentially high status because it signals extra energy on top of an already-promising future. Volunteer hours are often also used to gain admission to prestigious universities and certain jobs.
I have known music and philosophy majors. The majority of women find discussions of Wittgenstein’s Tractatus to be boorish.
Even if this weren’t probably-going-to-signal-a-good-career, we can’t all be leaders when we’re UBI NEETs.
There’s a huge difference between someone who works 80 hours a week and uses those vices to unwind in his spare time vs. people who live at home with their parents. All else equal, my wager is that women find the former to be much more sympathetic. Women don’t hate porn and videogames so much as they hate lazy useless men.
Obviously, tastes vary. I find working 80 hour weeks actually less attractive than living at home with parents, because they’re hardly there to be in a relationship with. But some people are obviously into that. If such a person then unwound with porn and games, it’s baffling how they could possibly be in any kind of relationship outside the occasional hookup.
In any event, UBI is at least not actively hostile to marriage and stable relationships the way the current welfare set up is, where women lose benefits if they admit to even co-habitation, and certainly if they marry. It might be a net benefit for working class family formation.
And what do you think the typical unemployed adult man who lives with his parents does all day?
If he’s not watching porn or playing videogames, then he’s watching tv, or getting drunk or high, or something like that. Yes, there is the occasional guy who plays musical instruments, writes philosophical papers, etc., but that’s the exception. The typical NEET doesn’t have any sexy passion.
I went through an (albeit short) stretch after finishing up a section of schooling and not being employed , living at home w/ mommy and daddy. Did I have too much free time? Yes. But I did not game, and didnt even have a smart phone at that point. I spent a lot of time outside, got stronger in the Gym, grew some plants, swum, hiked often, and even obtained a Girlfriend for a while. Granted, even I felt a tinge of uneasiness after a while, but this was largely due to limited options via lack of funds, which I eventually alleviated. The stay at home/video gamers are being enabled by their parents, and this isnt created by welfare nor would a UBI lead to an explosion of these men.
Why would anyone want to marry a breadwinner given the option to be the breadwinner instead? My childhood was full of stories, jokes, etc. about high income successful men turning in their similar-aged wives for a newer, younger model. The obvious take-away is “women need to be able to support themselves, and any children they may have; don’t count on a ‘good provider’ to keep providing.”
Obviously, there’s the desire for two incomes rather than one. And there’s the idea that earning good money is a proxy for other things – e.g. that one’s offspring may inherit some talent that will make them better able to support themselves.
But whatever may or may not have been true for 99.9999% of human history – we’re living today, not in either a real or a fantasized past. All UBI does is make more changes at the margins. Girls already seem to be more interested in e.g. getting a good education than boys – judging by drop out and non-learning rates. Maybe we’re well on the way to a class of decorative drones, picked by mostly self-sufficient females for reasons other than ability to produce income, and UBI would just push this a bit farther and faster.
Because getting stuff given to you can be more pleasant than having to work for it yourself? Of course, this depends on what the non-breadwinner is expected to offer in return. Some people, those who are sometimes referred to as gold-diggers, seem to offer little more than good looks.
No stories about men paying lots of alimony?
Perhaps. Or perhaps men will be expected to meet impossible demands and most of them give up. Perhaps the self-sufficient women end up sad and lonely, blaming men, who blame women and then the AI will turn us all into paperclips because humans whine too much.
To some degree, sure. But generally speaking, it’s undesirable to be reliant on other people for financial stability, since that greatly limits the amount of control one has over their own life. As arlie mentioned, a housewife who’s totally dependent on her husband will find herself poor and helpless if he decides to leave her. And if they do stay together, he can use her financial dependence as a form of leverage to control her life (what she can buy, where she can go, who she can talk to, what clothes she can wear, etc.), or to coerce her into doing what he wants (including forcing her to have sex with him), or to get away with abusive or unethical behavior (hitting her, screaming at her, insulting her, cheating on her). Sure, the majority of people wouldn’t take advantage of their spouses like that, but why take the risk by putting yourself in a situation where you’re totally at the mercy of someone else?
And what if a woman’s husband isn’t controlling or exploitative or abusive, but she just loses her attraction to him over time and wants to leave? If she finds herself stuck with him for economic reasons, that’ll just lead her to resent him, causing mutual unhappiness. I’d imagine this situation is much more likely than the more extreme risks I mentioned above. In fact, I’d imagine it’s fairly common, and was probably even more common before the majority of women had careers of their own.
@LadyJane
Sure, but that is just how you see it. I’ve know women who thought that the advantages were worth those disadvantages.
Male college students who aren’t particularly beautiful or star athletes or something are unhappy.
{Citation Needed}
Found this.
“There is evidence to suggest that university students are at higher risk of depression, despite being a socially advantaged population, but the reported rates have shown wide variability across settings.”
I can’t access the PDF, so is that data broken down by gender? The abstract, at least, doesn’t mention any gender differences.
No.
The fact that he likes writing posts more than doing other stuff does not make it any less work.
Related: I’m amazed that in the comments to this post, a Kipling poem has been linked, and it’s _not_ https://www.poetryloverspage.com/poets/kipling/imperial_rescript.html
I’m not quite sure what argument about UBI that poem implies; but I’m sure there is one.
One interesting thing about that poem is that it was written well before the Calculation Controversy, and the question of how to coordinate a socialist economy never comes up.
I don’t think it’s a strong argument against a modest UBI, although it might be against one with a high level. Men still work both to get wives and to support themselves, wives and children in the style they wish to become accustomed to.
Hello, long time lurker first time poster here.
This is an interesting post but it seems to miss the boat on the whole Jobs Guarantee debate and analysis that has been going on for many years. This is partly due to your post being a response to another interesting article by Simon Saris, which also, but less so, misses the boat on this debate. Still he does raise points that you sort respond to as if they were never raised e.g over disability and he emphasized no removal of those benefits.
I also read as much as I could of the 100+ comment stream and only two commentators correctly identified the real issues : ShamblerBishop and userfriendlyy.
Anyway a more substantive issue is the body of work and analysis done on the JG done by many economists over the years. You mentioned economists who had argued for a CBI or UBI where you included Milton Friedman who really argued for a Negative Income Tax which is not the same BTW (as others have noted).
However why did you not mention those economists who have argued for a JG? Where were Keynes’ On-the-spot employment, Minsky’s Employer of Last Resort, Mitchell’s Buffer Stock Employment, Mosler’s Transition Jobs and, in general, collectively named by the Modern Monetary Theory economists called the Job Guarantee?
Simon’s post using the non-standard term “Basic Jobs” – which he is entitled to do – is somewhat indicative that this is an unorthodox presentation of these ideas. He (and, for that matter, I) are unknown bloggers on this topic and, regardless, stand or fall on the quality of arguments and analysis. Whilst writing for a particular audience might have been a motivation for him, for whatever reason he omitted the critical, IMV, macroeconomic basis which is particularly important both for the JG and for a more complete evaluative comparison of the JG to BI.
If you really want to do this topic justice I humbly suggest you look to the main economist out of the MMT group who has specifically focused on this topic. (Of course, the others – mentioned above or not – have researched this aspect too, this is only my recommendation). This is Pavlina Tcherneva who has written for a range of audiences from the interested lay person to the mainstream economist academics. You could start with her Job Guarantee Faq or her team at Bard
Suffice to say all your objections have long been answered. That does not mean you agree with the arguments in those answers, of course, but a clearer discussion should start with those answers not write as if these have never been considered.
I have read Tchernevas Job Guarantee FAQ and I strongly disagree that it answers the points 1 to 11 raised by Scott. It doesn’t. It doesn’t even cover most of them. At least not to the degree elaborated by Scott. Only #8 is covered and to some degree others.
To be fair it is a nice FAQ and references to some further materials (the most interesting one “forthcoming” though).
Maybe McDonalds has to raise prices; maybe they even have to close some stores. But again, something like McDonalds continues to exist and workers are relatively well-off.
What about the people who get their food at McDonald’s? You can laugh and say “well they should go someplace else.” Do you know where that place is? Or are you just fucking with the poor? You compare guaranteed jobs to Stalin but a UBI is an ever bigger change.
Over 200 comments and the post and no one has said the phrase “wage subsidy” (maybe they said it in a way I failed to search, so sorry). Wage subsidy is taking something that works right now — our current jobs market — and improves it. You might say the job market doesn’t work for people like X or Y or Z but 1) with enough of a wage subsidy lots of those people could have it work 2) the fact that it actually works for a majority of people is not something you mess around with.
UBI also runs into the problem that you need buy-in from the people who still have to work their jobs. If my son said he wasn’t going to work but that I was going to support him but don’t worry he’ll still stimulate the economy by spending my money, no way. If I wouldn’t do that for my own child, why would I do it for some stranger?
+1 Came to the comments to make a similar remark, in that an hourly wage subsidy makes way more sense and while not perfect (and maybe even still not a good idea), avoids many of the drawbacks. A comparison of proposals to that would make things a lot clearer.
This seems to be like comparing shovels to spades in figuring out how to dig, but ignoring in the conversation that someone has already invented bulldozers.
Mc Donalds jobs arent exactly the most dignified , neither are Call Centers, etc… how is a wage subsidy to alleviate this? Neither are exactly linchpins of the economy…
I’m looking for some clarification: What’s your objective, to ensure no one ever has to do a job you (or they?) find undignified?
My goal would be that everyone who can contribute is allowed to, even if they only thing they are currently qualified to do is slowly sweep the floor. Currently we make that illegal for the least qualified/most needy among us, which seems counter-productive.
If a job at McDonalds or in a call center wasn’t usefully serving someone else in the economy, then they wouldn’t exist. Private enterprises only make money if they provide a product/service someone else wants to purchase due to the benefit of acquiring that product/service to them.
Where does this idea that call centers are horrible places to work come from?
I’ve worked in call centers at various times since I was 18; my first full time job was in a call center earning $8.63 an hour with no benefits in 2001; today, 17 years later, I’m again in a call center, earning $26 an hour plus performance bonuses and full corporate benefits. My job does not require a college degree (though it requires FINRA licenses) and many of my co-workers do not have one.
Why are factories – which sound like boring, dangerous, dirty places to me – held up as great “American Dream” places of employment, yet call centers are denigrated? I’d much rather be working at my call center with Big Evil Bank than working the line at most any manufacturing plant. The pay and benefits are solid, I have lots of downtime between calls I spend doing things like reading SSC and studying for another master’s degree (fully paid for by my employer!), we have a huge break room that feels like something out of a Silicon Valley campus with a top-floor view of Big Northern American City, meditation rooms, management that treats us like adults, a food court on the first floor… it’s a corporate grind, but hey… compared to welding all day long, I’ll take it.
Seriously, call centers aren’t all hell.
McDonald’s isn’t the cheapest place to eat. But there is a valid concern: if every business that employs low-skilled labor has to rise prices to be able to the workers discouraged from work by UBI, wouldn’t this cause enough inflation to effectively put UBI below subsistence level?
I am glad you mentioned the wage subsidy as that was what sprang to my mind as well.
And we already have several levers in existing policy that we can pull that work like a wage subsidy. The EITC is an obvious one, but we can also cut payroll taxes (possibly with revenue neutral increases in income taxes).
Not sure if I found this piece unconvincing because it violates my previous beliefs or if it was actually less convincing than other pieces. I don’t think either policy is very good right now, but the jobs guarantee seems a lot more incremental while still being actually useful.
This is true for both, and while the granularity with which jobs can be made shitty is more diverse, the technocratic jargon for redefining what is meant by ‘subsistence level’ is not immune, c.f. chained CPI. The upside of this pressure in the jobs guarantee is that governments and central banks would have fiscal incentives to achieve full private sector employment. Currently there are ~3.5 million unemployed people in the US, and the fed is raising interest rates. The EITC, which is one of those ideas that everyone in DC thinks is good but no one has the will to pay for, would end up paying for itself. This is another way of saying that in the ideal world, the cost of a jobs guarantee goes to zero, while the cost of a UBI stays the same.
If people are switching from work to leisure, there is less work being done. So maybe McDonalds continues to exist somehow, but there’s a lot less of it (read: it becomes more of a luxury). Similarly with Amazon. And Uber. And healthcare. And fresh fruits. Essentially everyone will have more time and less stuff/services. When people say that a jobs guarantee will cost more than a UBI, that is true both in terms of cost to the government and cost to the economy. If large numbers of people switch from high productivity private sector jobs to low productivity public jobs then this could be a problem with UBJ as well, but again, when UBJ works correctly there will not be many people using it.
Many people I know that shop on Amazon do so because they lack time and energy to shop. Is this really something we want to further promote? Or the increase in fast food consumption due to its convenience? And what of the other purchases people make due to lack of time that would be alleviated by working less?
These two things are the opposite of each other.
This idea is the opposite of reality.
There are 325.7 million people in the United States [source]. About 22.8% of United States citizens are under 18 [source]. If we only provide UBI to adults (we probably wouldn’t…), this means there are 251,440,400 United States citizens eligible for UBI.
If UBI was set to $10,000 per year, the program would disburse $2,514,404,000,000 annually.
About 31% of health administrations cost is devoted to administration [source]. A forgiving estimate of administrative costs for UBI would be 10% of its total costs. This means the total cost of the UBI program would be $2,793,782,222,222.
Social Security costs $916,000,000,000 annually [source]. If we replace Social Security with UBI, this means the net cost of UBI would be $1,877,782,222,222 annually.
The IRS collects approximately $3,422,000,000,000 in annual tax revenue [source]. Subtracting UBI costs from annual tax revenue leaves $1,544,217,777,778 to fund other government programs. In order to fund UBI, we would have to effectively reduce the size of the government’s budget by 55% – or double taxes. After-tax incomes would flatten out significantly.
If we perform the same calculation with UBI set at $2,000, we must effectively reduce the size of the government’s budget by 16%. The largest per-person disbursement possible (without a budget shortfall) would be $12,249.62.
A basic jobs guarantee is so obviously horrendous to me that I’m surprised that anyone in the world would seriously propose this. So I was pretty happy to find that almost every single one of the arguments against it that I wanted to write, was addressed by Scott above. Still, I’m going to write them out here.
Problems with basic jobs guarantee:
1) OK so what are the jobs?
Well-meaning social planners look at poor unemployed people and think “if only they had jobs, they would have something to do and feel meaning in their lives”. Thing is, well-meaning social planners have very cushy jobs, all things considered. Typically they work in comfortable, climate-controlled offices, in major urban areas near tons of convenient amenities. They probably draw a paycheque that is above the median for their local area. They probably have a lot of autonomy (if not in the wider, “I do my job my way” sense, then in the more restricted “I have free time to fuck around reading SSC on the clock” sense).
A basic jobs guarantee is not going to provide these jobs. At best, it will provide jobs that those very same armchair social planners deride as “bullshit jobs”. But that’s probably not going to happen anyway, because the specific kinds of bullshit jobs laid out above are very expensive to employers. If the government is providing these jobs out of tax dollars, they don’t have tons of money to spend. Various estimates I’ve seen of what a sustainable basic income looks like varies from about $3k to $10k a year. Given that full time work at the federal minimum wage pays about $14k/year, a budget much smaller than that isn’t going to result in relatively cushy, relatively good bullshit jobs. It’s going to result in backbreaking labour in intolerable conditions.
1b) We might not be able to legally afford it
Writing the above just made me realize that the federal government may be fundamentally incapable of affording the cost of a basic jobs guarantee that actually satisfies all the legal requirements in labour law.
2) The purpose of a job is not the distribution of welfare payments (Alt Title: Some people are unemployable
A basic jobs guarantee is proposed as a form of social safety net. But jobs are fundamentally not about social safety nets. Jobs are about accomplishing things. Jobs aren’t an entitlement that is bestowed upon deserving people as a way to reward them for their virtue. They’re responsibilities to accomplish goals. Goals that are important.
If a given impoverished person is unemployed, there is already a good reason for this. This good reason could be one of many things, but whatever it is, it can be boiled down to “this person is not worth employing”. To use what I hope is a relatively uncontroversial example: a coal mine isn’t going to hire quadriplegics. So, if it’s the case that the people we would be guaranteeing jobs for are already in one way or another fundamentally incapable of working effectively… what job do you propose they do? Whatever job you end up giving them will get accomplished terribly. And this is a big problem, because jobs exist to serve a goal. If you would, for example, guarantee them jobs as janitors, then whichever place provides the job guarantee will very quickly become a disgusting dump. If you guarantee them jobs as construction workers, their buildings will fall down. Because if this wasn’t true, they would already have those jobs.
Unless, of course, nobody was hiring for those jobs in the first place. If that’s the case, then, it’s because nobody needs those jobs done. To continue the analogy, more construction workers might sound great, but if the population of your town is slowly declining, who is buying all those houses that get built? One of the main arguments for a basic jobs guarantee is “it gives people a purpose”. I can think of no better way to drain someone of a sense of purpose than to make them work 40 hours a week at a job building things nobody wants for people who aren’t there.
2b) Some employees are not worth it even if they’re free to you
You might say to the above: Yeah, so, all of that is true, who cares? The government is paying for it, and they would pay for it anyway (in the form of a UBI) in counterfactual world, so what’s the harm? If they’re totally useless, the company can just let them sit in a corner. If they’re actually valuable to the company, the above doesn’t apply.
Well, some employees are not worth it even if they’re free. Some employees can cost you metric assloads of money. There’s the simple and mundane cases: oops I spilled coffee all over this $2000 computer and now it’s a paperweight. There’s the abstract, systemic cases: this guy is sufficiently distracting that he reduces net productivity by $10k. And then there’s legal liability issues. So say your Jobs-Guaranteed Janitor is cleaning a room one night and he sees a list of names on a whiteboard. Most of the names are Arabic, and your JGJ is a white trash from rural Raciststatia. He takes a photo of them to post on social media along with some choice words. Tomorrow morning your business is subject to a massive boycott that costs you millions of dollars. Oh, also you’re a medical company, and that photo was a HIPAA violation so you get fined twenty million dollars. That “free” employee isn’t looking so free now.
3) Being able to fire people is a very important part of why the private market works
A while back I saw the blog post of someone that was affiliated with SSC in some way. It might have been linked in a linkpost, or linked to in a comment. I don’t remember the website it was at, or the name of the blogger, so I’m sorry for that, but if someone else does please leave a comment reply with the link.
Anyways, the gist of this post was that this guy was someone who worked in some branch of civil service where it was de-facto impossible to fire anyone (short of them committing rape or murder), and he explained all the crazy dysfunctions that resulted. I think one of his examples was a coworker who didn’t show up for a single day of work for six months straight, but who still drew a paycheque. I can generate a ton more potential issues just reasoning from first principles.
If a person working at a job knows that, no matter what happens, they will keep this job, then they have very little incentive to behave well. Combine this with the fact that the people being helped by a jobs guarantee are already people who have trouble operating responsibly in public society (impulsive/high time preference, substance abuse problems, mental health issues, etc), you’re asking for trouble. What happens when, eg., highschool bully dynamics start popping up. Let’s say your software engineering firm takes place in the basic jobs guarantee and gives five guaranteed janitor jobs to such people. What do you do when those janitors start physically assaulting your programers? Sure, physical assault is illegal, but there’s no actual evidence beyond the black eyes and bruises, so the police won’t get involved. You could shell out the million dollars to get a comprehensive surveillance system set up, but why should you be on the hook for a million dollar cost when you’re not the guy assaulting people. Meanwhile, your programmers are fed up, so they all quit to start their own five-person startups in their garages where they won’t have janitors. You can now no longer perform your core business function, and the entire company collapses.
4) There’s a slippery slope to quazi-slavery
This argument is more handwavey than the others, in that you could apply it to a lot of other things the government does. I, in general, _would_ apply it, but most people would contest that, so I’m not going to argue for the general case.
The basic reasoning goes like this. Presumably a ‘basic jobs guarantee’ would be a guarantee, not a mandate. We aren’t going to force everyone to get the jobs. But, as the purpose of a jobs guarantee is explicitly welfare in nature, and it’s presented in contrast to a UBI, I think it is a safe assumption that the intention would be for this to be the primary form of welfare. Medicare is abolished, eg, and replaced with an automatic health insurance deduction from your guaranteed job salary.
In other words, you end up with a welfare system where your payments are conditional on you taking the job.
So now imagine that one day, your employer wants you to do something that you have ethical qualms with. If it bothers you that much, you can (at least in principle) quit your job and go get another one. You also often have a limited ability to protest within your job. A recent example is a friend of mine who works at a software consultancy. They took a very large contract from the DoD, which prompted protests from a lot of the staff who did not want to be indirectly complicit in building weapons to bomb the middle east or whatever. So many of the staff protested that the company allowed them to opt out of any assignments concerning the DoD contract.
So what happens when this happens with the job guarantee? Say one day the government decides to use it’s gigantic new supply of construction workers to engage in a bunch of urban renewal that just so happens to involve demolishing an African-American neighbourhood and building a highway through the rubble. Unlike in the private industry scenario, these people likely do not have the option to opt out of their job guarantee, as they would lose all their benefits. They probably also do not have the ability to transfer to a different guaranteed job. (This is an assumption I’m making but, in general, government social services are not known for their ample consumer choice). They have no meaningful way to oppose what they see as immoral.
But it gets worse. Because this isn’t a private employer doing this, this is the government. The government can pass laws and regulations. A private employer can ask you to do ethically dubious work. But they can’t pass laws mandating that you have to do ethically dubious work. Say the government wants to accomplish something they know will spark outrage. All they have to do is tweak the administrative rules governing the jobs guarantee and suddenly they are in a position to force the issue.
But it gets even worse. Once the government has this ability, they will use it. Once the government has a convenient pool of construction workers that they can mandate do whatever they please, they will use it to do whatever they please. Maybe this works out for the best, and results in more bike lanes and public planters. But colour me skeptical. That seems extremely optimistic, given human nature and human history. More likely it’s used to build controversial things more conveniently, using a workforce that cannot meaningfully refuse. You think Keystone XL was bad? How many pipelines do you think the government’s going to build once they have a “free” workforce that can’t go on strike?
There are so many obvious, and extremely basic flaws with a jobs guarantee, that I really can’t take seriously anyone who would propose it in good faith. That’s not a very constructive comment, though, so I’ll instead end with three simple questions that any basic jobs advocate needs to answer to my satisfaction before I’ll even entertain their arguments at all:
* What jobs do you propose to guarantee to people?
* Why do the people who you would guarantee these jobs to, not already have a job doing this?
* What would you do with the people who are not capable of performing that job?
Umm, correct me if I am wrong, but didn’t we try a Basic Jobs program back in the 19th century in England? Namely, the Workhouses, carefully calibrated to make any private sphere job heaven by comparison.
I feel that a program that literally uses the first chapters of Oliver Twist as a technical manual might not need such a comprehensive debunking, but I’m glad one exists.
I don’t disagree with anything Scott has said, really. But, as someone who feels uncomfortable with basic income but less uncomfortable with basic jobs, I don’t think he’s addressed my objections at all.
For example, he’s spent many words arguing that people who are jobless-but-financially-secure would be happy. I believe this already, and I’m confused that anyone would disbelieve it.
Here is my worry about basic income: if implemented, nobody would work any more.
Let’s imagine a world with two classes of people. One class is unemployed but has a meager income. They get crappy housing, like “you get half a bedroom in a house containing ten of your friends”. They eat plain food and cook for themselves a lot. They can’t afford fancy travel trips, so they have to stay home and watch tv and play video games all day.
The other class of people have jobs which take the usual forty-hours-per-week, plus commute. They can eat at restaurants if they want (and, in fact, they usually do, because they don’t have time cook for themselves). They can watch movies and go to parties. They can have their own apartment. They can take vacations to foreign countries if they want. They probably get better medical care.
For me, it’s super super obvious that I would rather be in the unemployed class of people. My software job is wonderful — I’m well-paid, I get good perks, I get opportunities to be creative. But it eats a huge chunk of every day. There is no amount of alcohol or beach vacations that would be worth forty hours per week of my life. I don’t even like alcohol or beach vacations.
I think — maybe this is the Typical Mind Fallacy — I think over ninety percent of the workforce would make the same calculation.
It gets worse for the next generation. At some point, children are going to realize that they could study hard and get good grades, doing make-work for the next ten years to demonstrate their willingness to obey orders and do make-work. Or they could goof off, drop out of school, and still have food and shelter as an adult. Who’s going jump through all those hoops? Seriously?
I would like to see a post addressing this concern.
I suspect that UBI proponents will argue: “well, supply and demand will happen here. Once the demand for jobs drops, employers will respond by making jobs less unpleasant, until the amount of work that gets done reaches some sort of steady state, hopefully involving a lot less unnecessary work.”
I can’t prove that this argument is wrong. But it reminds me of talking to libertarians. Somebody says: “if you don’t have government, you won’t have a police force.” And the libertarians come up with these elaborate frameworks describing why the private sector would build a police corporation that would be every bit as good as a real police force. Libertarians will also explain why the private sector would come up with good solutions for pollution, military defense, and other social goods that usually the government has to provide. Libertarianism hasn’t really been tested, so it’s hard to prove them wrong, but this sort of blind faith makes me glad that libertarians aren’t running the country.
And I feel the same about the “jobs will get less unpleasant” argument for UBI.
Doesn’t this same argument apply to having any welfare state at all?
If by “welfare state” you mean a situation where people can choose not to work and the government will pay for their food and housing, then yes, it does.
Please note that the United States does not have a welfare state by this definition. We have rules around unemployment, there’s a bunch of bureaucracy around who qualifies for disability, et cetera.
The other argument I think UBI people might make is that unemployment will actually be really unpleasant compared to having a job, so that most people will want to have a job despite the UBI.
I have a hard time understanding this. Above, I described the unemployed class as being people who lived in a house with ten friends, and they stayed at home and watched TV and played video games all day. If you decrease the actual cash amount of the UBI until people are suffering from malnutrition, I could believe that would motivate people to get jobs. But then I wouldn’t really think of it as a UBI any more.
And Scott has actually dedicated a lot of words to explaining how great it would be to not have a job, so I don’t get the sense that he’s laser-focused on making sure enough people will remain in the workforce.
Scott makes some points about how some people are terrible, and guaranteeing these people a job is not a good solution to poverty.
I think Scott is correct. We should not actually offer people guaranteed jobs. We should offer people reasonable jobs which they can keep as long as they don’t screw up too badly. Ideally we should let them keep their own hours — show up, spend two hours chopping wood or cleaning the subway or whatever, get paid enough to buy food, repeat the next day if you feel like it. Perhaps, if one does well at this job, one can get a letter which would encourage employers to give one a private-sector job.
I hope we can find real work that needs doing, but if we have to resort to make-work, I think making people do make-work is a better solution than telling them they never need to work in their lives.
The point of the work is not to generate value, though that would be a nice side effect. The point of the work is to avoid a situation where everyone decides to never work again.
They can eat at restaurants if they want
Who is working at the restaurants?
People who want to supplement UBI.
If sitting at home playing video games is so much better than the current average working life, then we should seek to increase it.
Seriously, economic growth is fun and all, but if life under capitalism is so bad that sitting at home, crowded with other people you may not like, eating bland pasta 12 times a week and playing low brow video games is better than a middle class professional with a fulfilling job, good perks, their own pad, and control over their food and social life. THEN JESUS CHRIST WHY ARE WE NOT DOING THIS NOW!?
Like, unless the point is that it will become better for us or our children than sitting at home playing video games, or unless sitting at home playing video games is utterly unsustainable even in a rapidly automating society, there kind of is no point aside from a slightly calvinist desire to see people suffer for their self-actualisation.
You don’t seem to have noticed that video games, pasta, houses, electricity, … have to be produced. In the world where everyone is taking the paid unemployment option, nobody is producing them.
Or is your “rapidly automating society” intended to imply that nobody has to, that the robots will do all the work?
What’s the price of white rice, red lentils, a small house in the middle of nowhere, Idaho and electricity? (£0.45/kg, £2/kg, not sure about the others)
Producing essentials is easy. It’s the luxuries that are hard.
My old calculation of the minimal cost of life, a bit more spartan than yours, was about $500/year.
(towards the end of the post)
Why do you jump from 40 hrs a week to 0 hours? With the rise in Gig and free-lance work, isnt the reality more like 30-40-25- whatever per week, based on jobs lined up? Thats how ive worked for the past 2 years or so. A UBI would potentially supplement that , and I would have more to circulate into the economy at large. Would I want to live unemployed with 10 others? No , of course not. Do I love weeks where I work 50 hours? Nno I dont. What I like is that middle ground zone….
You should REALLY REALLY check out Mr. Money Mustache’s blog. If you save 75% of your income– which is extremely doable with a software engineer’s salary and the cutbacks you’ve said you’re willing to make– you can retire within seven years, even if you have no savings right now, and then live the life you want to live.
I can’t believe that the OP didn’t address inflation, except in the narrow sense of rent prices. If we dump more money into the economy, prices will rise to adjust to it. Everything will cost more. Inflation is always and everywhere a monetary phenomenon.
The only way to avoid this is to make payments small enough to be meaningless, or remove money from something else. Looking at the federal budget deficit, it’s hard to see where that would be. Many advocates of UBI claim it would replace existing programs like Medicare and Social Security. That will not happen. There are too many people who depend on those programs. Enough people will lose from the transition to oppose any change. UBI would have to be done in addition to the status quo. Old people get 50,000 dollar medical bills all the time. Medicare pays.
We could raise taxes dramatically, which I suppose would work, but political support for that is lacking.
Are we going to adjust UBI for inflation? If so, how do we keep prices from rising again? Without cutting spending or raising taxes UBI is simply printing money. How does that end?
And the amount it would cost…. 20,000 dollars times 300 million people is 6 trillion dollars. Six trillion dollars a year? Even if we don’t count children, and only adults, that’s 4 trillion a year. How the hell is that going to happen? That’s hyper-inflation. Let’s say 10 grand . Two trillion dollars a year. No, that’s not happening. The entire federal budget is 4.4 trillion. We’re going to increase that by 50%? Not without wrecking the entire economy.
Another problem would be the shift from investment to consumption. Give a rich person 10 grand and he invests it. A poor person spends it. That’s not a moral failing, it’s just reality. A poor person has to spend it. Either way, investment drops because we are taxing the rich to pay for this, right? So investment declines, stocks decline, jobs don’t get created, more people try to live on UBI, but prices keep going up, etc.
UBI is only possible by ditching many things we pay for now, like Medicare and Social Security. Even then, the inflationary impact throughout the economy is impossible to predict, except it will be bad.
There’s no way around the problem that some work is worth more than other work. People have choices as to what work they do, and what skills they gain. I say this as someone who has worked in fast food and managed restaurants for many years. I get the suck. I also took enough economics courses in college (which got me out of restaurants) to know that printing money is a quick way to ruin life for everyone.
> People have choices as to what work they do, and what skills they gain. I say this as someone who has worked in fast food and managed restaurants for many years.
Imagine if everyone in fast food internalized the idea that it’s a dead end and that their work isn’t going to be worth a decent living, ever. Would you like to live in a society like that?
“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.”
Government wouldn’t have to pay everyone basic income’s worth of money, just those that go to the guaranteed job. (Note: I’m not actually supporting this:) For example, you could have people in closets watching blinking circles and pressing a button whenever they see a square instead, rewarding correct detection by what would amount to $8 per hour. While I’d rather have a basic income, that specific argument for costs is not valid.
Related: The best argument against basic income is that it would be too costly to have one that would actually be livable. First, some portion of people would just opt to live with just UBI instead of working and paying taxes. You would also need to rise taxes to fund UBI, decreasing value of working one hour, further making not working appealing. With more people not working it becomes socially more accepted, thus further decreasing the amount of tax payers. Maybe the math still works out (richest peoples’ willingness to work is not changed much, except maybe by changing social norms), but I still fell this is the strongest argument against UBI and would like to see realistic UBI funding calculations that take the necessarily decreasing work force into account.
Furthermore, stuff like talking about tranquilizers sounds like collecting bad arguments to slam dunk the case for UBI. Scott definitely didn’t steelman opposition to UBI here.
One more thing: the OP doesn’t account for behavior. A lot of people really are poor because of bad decisions. I was married to a grocery checker while working at Domino’s as a pizza driver. I lived a fairly comfortable middle class lifestyle with a household income of about 65k/year. OMG how is this possible?
1. I worked
2. My wife worked
3. We were married and joined incomes
4. We had one child but an extended family to help
In other words, acting like middle class people made us middle class. I had one married co-worker. The rest were single. Many had children. So instead of having a household income of 65k, they had half that, with dependents. So, they were poor and I was middle class while working the same job.
It’s not income, it’s behavior. It’s not having a job or not, it’s family structure. No solution exists for this other than individual choice. No one makes you have children. No one makes people self-destruct. I’ve seen it happen. Someone gets drunk and drives their new car off the road, costing them their job and ensuring they pay for their loan on their car that they don’t have (and they cancelled the insurance right after registering it). I could list DUIs all day. It’s simply stupidity.
Middle class people behave in middle class ways. Poor people act like poor people. If someone acts middle class, they will end up being middle class. Someone can start middle class and make poor decisions. No government program can stop this.
Sure, plenty of people end up in bad situations because of bad choices. But we’re going to have some kind of welfare program for people who end up on the bottom, either by bad choices or bad luck or bad genes or whatever. The question is, how should we operate that program?
The current way we do this is with a fairly complicated interlocking set of federal, state, and local programs that have complicated eligibility requirements to make sure the money only goes to people we think really need it/deserve it. And that imposes a lot of costs on the recipients of those programs, including sometimes limiting their ability to make or save any money at all, lest they become ineligible for their programs and end up losing way more in benefits than they make in extra income.
One possible alternative is an UBI. That basically requires that we raise taxes a lot, and then offset some of the tax increase by giving everyone a check for $X, where $X is deemed enough to live on at some minimal level. We have to raise taxes by a lot, though, because there are a lot of people who will be getting UBI checks and we’ve got to cover them all.
Another possible alternative is some kind of government-provided job tied to (essentially) welfare. That strikes me as a pretty awful choice (as it does Scott), but you could imagine ways to make this work.
Still another possible alternative is to try to redesign our existing welfare programs to be less intrusive and to create fewer perverse incentives.
But none of these will address the concern that many people got poor by making dumb or evil decisions.
That was my experience growing up with a stay at home, homeschooling mom while my father worked as a baker in a fairly low cost city. My grandmother helped with the down payment on the house. Sure, we didn’t get to go on vacation, but we also weren’t poor in any super important way. It seems reasonable that if you want pastries to be sold, someone like my father has to make them instead of getting to just talk about Kierkergaard all day.
On the other hand, I believe the argument that the amount of social savvy or niche skills needed to remain consistently employable may be going up, and continue to go up due to automation, at which point a UBI may become necessary.
This is so wrong. Not the facts of the case. But the last paragraph. “Middle class people behave in middle class ways. Poor people act like poor people. If someone acts middle class, they will end up being middle class.”
You could substiute “good” for middle class and “bad” for poor – in an ethical sense, not a functional sense. I translate it as “following a set of norms labelled ‘middle class’ raised our social standing, making us better people in a moral sense”.
I agree that e.g. budgetting skills, living within your means, and having people willing to help all make it far more likely you’ll live comfortably, even compared to others with the same income. I’ve even personally lived that, many years ago. But what that has to do with “middle class” is beyond me.
And yes, maybe marriage (“2 can live as cheaply as 1”) is one way to control costs. I’d hate to be in a position where I had to get married for that reason – I’d much rather live with roommates, where similar economics might apply. Or other members of an extended family, for that matter.
Rereading carefully, I see part of the set of bad choices you mention are single people with dependents. Avoiding having children when you can barely support yourself is a good thing. But getting pregnant while single sure isn’t the only way people wind up poor with dependents. Put another way, sh*t happens, and making the right choices only makes it more likely that you’ll be comfortable. There are no guarantees. Welcome to widowhood – enjoy all the people accusing you of irresponsible childbearing, on top of the financial issues, on top of the grief and shock 🙁
You write:
Define “subsistence level.” You also write:
“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.”
That suggests that what you are arguing for is at least $20,000/year, although perhaps your point is that $10,000/year and not having to work is better than $30,000 and forty hours a week.
Unless I have missed something, you wrote the entire article without bothering to do the relevant arithmetic. A UBI at $20,000/year, applied to all adults, costs $4.8 trillion/year. That’s a little more than the entire federal budget.
Suppose we reduce it to $10,000/year, which still gives $20,000 for a couple. That’s $2.4 trillion. The UBI is supposed to substitute for all other antipoverty programs. Abolishing Medicare, Medicaid, and Social Security frees up about $1.9 trillion. I don’t have exact figures for unemployment compensation, SNAP, etc., but a little googling suggests that all of those things add up to about another $.2 trillion. Abolishing all state and local welfare, for which I haven’t found an actual figure, should get you up to $2.4 trillion with perhaps a bit left over.
So, as a back of the envelope calculation, if you abolish all of those things you can manage a UBI of about $10,000/year. You don’t say how much your insurance payment to substitute for medicare and medicaid is, but it’s going to take a large chunk of that. Does the result fit your definition of “somewhat above subsistence level”?
Currently, the maximum social security benefit is about $32,000/year, the average about $17,000. The people receiving those payments are also getting medicare. That’s a lot of people who have just been made poorer by your proposal.
Basic income goes to everyone. Basic jobs go to only those people who prefer them to their current options. At $10,000/year, that comes to about $5/hour for a 40 hour week, so not very many. Suppose we take it all the way up to $20,000. About 20% of the population make no more than that. Suppose everyone one of them accepts the government job. That’s one fifth as many people as the UBI. So what you should have written was something more like:
I agree with many of your arguments to show that UBI is better than universal government jobs. Also better than thermonuclear war, another glaciation, or a variety of other things. But in order to make your case you also have to show that it is better than the present situation, and that requires thinking about actual numbers. Until you do that, you are talking about a fantasy world where a benevolent god has just dumped an couple of trillion dollars a year on us.
“Subsistence level” in this context is mush, like the “minimally decent lives” that I criticized in an old blog post. Either it means a level of income far below what you or any other supporter of UBI would approve of or it is rhetoric to make a subjective preference sound like an objective fact. Put an actual number on it, then do the calculations and see if you are still in favor of a UBI.
Why do you assume a fixed budget for the government, and assume that 100% of the UBI is actually distributed? Presumably you would, at a minimum, adjust taxes such that someone making more than say UBIx3 gets no or minimal net benefit from UBI.
I was assuming that all of the UBI got distributed–that’s the point of a UBI. I was not assuming any increases in taxes.
If I am paying $20,000 in taxes and getting a $10,000 UBI, my total tax bill is only $10,000 but my marginal rate, which is what is relevant for the incentive to work less or try harder to conceal taxable income, is still the same. So if you raise my taxes by another $10,000 in order to make me not get a net benefit from the UBI, my marginal tax rate goes up, probably by quite a lot.
Do most proponents of UBI actually make that assumption? I thought a lot of them just bite the bullet on the marginal (or actual) tax increase.
Or actual propose something UBI-adjacent like a negative income tax.
I’m not sure “keeping the size of the budget the same” is a key assumption either, unless you think we’re at the peak of the Laffer curve, right?
I think Charles Murray proposed that you could use a UBI to replace social security, Medicare and Medicaid which is politically insane but that’s where it comes from.
>I was not assuming any increases in taxes.
Every single UBI proposal with actual numbers does propose at the very least clawing back the UBI itself, and usually a lot of other tax increases.
So then you disagree with Scott’s premise that a basic jobs guarantee, while not ideal and inferior in his eyes to UBI, is still better than nothing (i.e. better than the current welfare system and better than a hypothetical situation with no welfare system)? If so, what do you think should be done about the fact that increasingly more people will become unemployed as automation takes over more and more jobs? I’ve heard some people suggest that automation will ultimately create more jobs than it displaces, but even assuming that’s true – and I’m skeptical that it is – many of those new jobs will likely require skill sets that the people displaced from their old jobs won’t have and can’t easily or quickly learn, which means it’ll still leave a lot of people unemployed and unemployable for the foreseeable future. Assuming we both agree that this is greatly undesirable, and assuming that it’s at least theoretically possible to solve the problem in question, what do you think would be ideal?
As for your challenge to put an actual number on the cost of a “minimally decent” standard of living: Sticking to just the bare necessities, I currently spend $450/month on rent, $50 on bills, and $250 on groceries. (I also consider my $120/month in transportation expenses to be a necessity, but only because I have to get to work and school; if I was unemployed and living off UBI, it wouldn’t be as much of an issue, so I won’t count it here.) By focusing more on bargain items, eating more nutritionally-efficient meals, and eschewing snacks and desserts and comfort foods, I could probably get by on as little as $100/month in groceries without suffering hunger pains or fatigue, let alone serious nutritional deficiencies. My rent is already extraordinarily low for this city, since I’m splitting a rent-controlled three bedroom apartment between four people, but if I was willing to live in a worse apartment in a worse neighborhood and have two people living in each bedroom, I could imagine a monthly rent as low as $300. I can’t see bills getting much cheaper than they already are, since they’re already on the far side of the low end for this city.
$300 on rent, $50 on bills, and $100 on groceries adds up to $450/month, or $5,400/year. However, I live in one of the most expensive cities in the nation. I went and used an online cost-of-living calculator to see how much a comparable lifestyle would cost in other parts of the country, and it comes out to between $3,500 and $4,500 in most other major cities, and between $2,500 and $3,500 in most places that aren’t major cities. So for the average American not living in a major city, roughly $3,500/year should be sufficient to live a lifestyle free of starvation, exposure, or extreme discomfort, with at least a minimal degree of modern amenities (e.g. indoor plumbing, heating, electricity, and even internet access, which I included in the cost of bills). Granted, it would also be a Spartan lifestyle with very limited food options, no entertainment that isn’t free, and no means of transportation other than walking, living in a small apartment in a bad neighborhood with two people to a room. Still, that’s significantly better than the $500/year lifestyle you described on your blog, with people living outdoors in tents or in cramped apartments with ten people to a room – and in the modern era, I think we can afford to raise the standards for a “minimally decent” lifestyle to something beyond what would be expected of a medieval peasant. Does that strike you as a fair compromise? And more importantly, do you think it would be economically viable?
A $3,500/year UBI as a substitute for all current welfare broadly defined would be an improvement on the present situation and result in a decrease in total government expenditure, as I think is implied by my earlier calculations. But I don’t think it’s politically possible, since it involves a sharp reduction in income for almost anyone on social security or anyone with substantial medical bills currently on medicare or medicaid.
One interesting question is whether you could fund it without eliminating the programs whose beneficiaries would be much worse off, and my guess is that you could not.
About financing the UBI, a common idea is introducing a demurrage on the money: For each dollar you own, pay half a cent per month, and suddenly there is plenty of money for the UBI.
The effects of this idea are difficult to estimate, and I wonder what people think of it? People would spend their money faster, which helps the economy. People spend their money on land, gold or buy other currencies, so prices for that will rise. Interests would go down, which will help the poor.
Basically, demurrage plus UBI would be a giant redistribution of money from the wealthy to the poor.
It was tried successfully in Austria during the Great Depression — people would buy little stamps to stick on their banknotes. Today, in the age of mobile payment and the blockchain, there should be fancier methods than sticking little stamps.
On the other hand, the UBI probably won’t come. The government doesn’t like people to have too much spare time. Hence the phenomenon of bullshit jobs.
The advantage of seeing how people want to fund a UBI is that you get to here all their bad ideas.
We already have a tax system, so it’s pretty clear how we will be funding any UBI we create.
I was responding to someone who wanted a wealth tax. A really nice thing about an UBI is that the government climbs out of everyone’s asshole because it can stop deciding who’s really “worthy,” but now we’ll be shoving the IRS back up there to make sure that no one is hiding wealth.
A wealth tax is a good way to redistribute money. Unearned wealth is a large part of many wealthy Heirs income. Is this really that ethical for them to just sit on it?
What gives you the right to decide what isn’t and isn’t ethical for somebody to do with their money? If I want to leave my money sitting in my bank account but I’m going to have to pay the tax man half of it for the privilege, then sod off I’m just going to stuff it into my mattress in order to start saving.
There is no privacy in a world with a general wealth tax.
Taxes on land are quite different, in that land titles need to be public anyway. It wouldn’t take that much work to get me on board with a land-value tax, at least in comparison to general wealth or income taxes.
Hey, at least this way the government is mostly harassing people who can afford to hire lawyers if they’re being treated with blatant abusiveness…
— “A common idea is introducing a demurrage on the money”
I keep reading this as “a demiurge on the money”, which I guess would be an interesting replacement for Washington’s portrait.
— “On the other hand, the UBI probably won’t come. The government doesn’t like people to have too much spare time. “
I don’t know if I accept this level of paranoia/sadism. In particular, the government’s failure to ban Bitcoin tells me they’re not really up to speed on the whole “having an iron fist to crush any threat to the existing system” thing. Maybe they’re as tired of all of this as we are.
The government may not be banning Bitcoin because they don’t care about the iron-fist thing, or they may not be banning Bitcoin because they don’t understand it and therefore don’t understand how it could be a threat to the existing monetary system, or they may not be banning Bitcoin because it’s structurally weird enough that the parts of the government that understand it are having a difficult time making a case to the parts of the government with the power to ban it, or they may not be banning Bitcoin because they understand it very well and believe that it’s limited in ways that prevent it from ever becoming a realistic threat. Or because they believe Bitcoin is in their interests for some reason. If you really want to get speculative, the government might even be behind it — they have plenty of crypto expertise and no one knows who Satoshi is or what he was trying to do.
At the moment, any of these interpretations are plausible. But back in the Nineties and early 2000s, the government quashed several gold-backed digital cash schemes, which strikes me as evidence for the second, third, or fourth interpretations.
Total currency in circulation is about $1.6 trillion. The estimates I found of how much of that was held abroad ranged from thirty to seventy percent–call it fifty percent for simplicity. So your tax of 6%/year brings in about $48 billion/year. That’s about two percent of the cost of a modest ($10,000) UBI.
You really shouldn’t be using the amount of physical currency in circulation here.
Total “savings deposits at all depository institutions” in the US are about nine trillion, or about $28,000 per capita. You can work out for yourself what kind of UBI that would pay for at various tax rates, but 6% of $28,000 is $1680.
Yes. However typically BI proposals include some form of change in how the tax brackets work and/or the elimination of much of current social spending. Combining these three ideas paying for a basic income doesn’t seem that hard.
Also it would be interesting what effect charging such a tax on money would have on bond yields. It could well push them negative, which would mean that the government could essentially borrow for free. Essentially the worry becomes inflation
I don’t agree with the proposal to tax currency but it is still important to get the facts right here.
Why shouldn’t I use the amount of physical currency? The proposal was for taxing dollars, not assets. If it’s for assets, is there any reason to tax dollar denominated assets such as money in your checking account but not other assets, such as your money market account, T-bills, stocks and bonds, … ?
Because if you’re using the amount of physical currency, your choice of the yearly figure of $10000 becomes arbitrary. That’s the amount of currency in circulation at any given time, not the amount that changes hands over the course of a year.
US tax receipts are something on the order of $3 trillion. If you understand why tax revenue can exceed currency-in-circulation, then you understand why expenditures can also exceed currency-in-circulation.
The proposal was:
That’s a tax on cash balances, not on transactions, so it is the amount of currency in circulation that is relevant.
I’m fairly sure the figures you gave for currency in circulation are counting actual paper bills etc., not cash balances at banks. Banks, as I’m sure you’re aware, are not required to fully back the balances they hold with paper, so the latter figure could be higher.
(If the numbers I found above are correct, it’s specifically about five times as high — which still isn’t anywhere near enough to pay for a UBI unless you tax it so much that everyone’s going to start using the First Bank of Coffee Cans Buried In The Backyard instead.)
Correct. The balance in my bank account is an asset measured in dollars–but so are my house, stock I own, … . I took the proposal as being a tax on currency.
If it is a tax on currency plus any asset that is defined as worth a fixed number of dollars with fixed interest, such as a checking account or savings account, people will shift from those to money market accounts or the like, which provide the same convenience, a little more risk, and avoid the tax.
Savings are how we do investment in our system. (My wealth is in the form of a bunch of stocks and my savings account, which my bank invests.) We traditionally see investment as good (money goes into helping other people build new things instead of immediately being consumed).
I’m trying to save up for a car, and long-term the deposit on a house. Please kindly don’t take half my money every month and get your grubby hands out of pockets.
You’re off by two orders of magnitude here; he’s proposing to take 0.5% of your savings every month.
Compared to the current 20-30% of your income every paycheck, that’s probably a good deal. But I don’t think the math will work out for him, any more than it did a century ago when the plan was “only 1% of your income every paycheck, and then only if you’re a 1%er”, so I’d worry about the rate growing to worrisome levels.
From a little googling, labor is about 20% of the cost of McDonalds franchisees. Double wages and, if they pay those wages instead of substituting more skilled labor or machinery, and prices go up by about 20%.
Is that just labor at the store itself, or does it include the share of labor costs in their supply chain?
I think that’s in the store itself. I was assuming that most of their labor was low wage labor but not that most of their supply chain was.
I don’t remember which way this points, but isn’t McDonald’s a bit weird in that there are both corporate stores andprivately owned franchises, and statistics about McDonald’s (particularly related to labor) are often confused when it’s not clear whether they cover one, the other, or both categories?
I was working from an estimate for the franchises, which are most of McDonald’s.
I’ve said it before, but beyond the Alaska permanent fund, there’s an area where we could see a TON of extremely varied UBI case studies that I’ve never really seen anyone talking about UBI mention, one where we could see the limits, the pitfalls, and the benefits of a UBI as applied to a population with extremely deep historical poverty, intergenerational trauma, and serious substance abuse issues: Native American tribes with (more or less) successful gaming operations who distribute a portion of profits to their members in the form of a “per capita” payment.
My anecdotal experience is that it’s no panacea, but that it sure as fuck helps–but there’s a lot of potential data out there to move beyond anecdote.
+1
It’s way, way too easy to think up better social programs that seem like they’d make everything better, but turn out very differently in practice. We really need data to decide what the likely impact of the programs is likely to be.
Tribes vary widely n their “tribal Health” if you will. An overly limited study would be of grave dis-service.
Be careful of making that particular claim. It seems like NA tribes that gave direct cash reimbursements to their members saw substantially worse outcomes than ones that didn’t: https://www.economist.com/united-states/2015/01/15/of-slots-and-sloth
Also NA tribes are not a good model for UBI because the cash amounts involved are unlikely to cause inflation in the overall economy.
Basic income has some attractive properties, but when someone starts talking about it in terms like “a real shot at utopia”, all sorts of heuristics go off in my head, and they aren’t good ones.
Great post. Agree that Job Guarantee wouldn’t work, for largely the reasons Scott points out. Agree also that UBI won’t happen, but also suspect it’s not optimal even if it were actually within the Overton window and economically possible.
Why? My kids go to school with a lot of kids whose parents are on welfare and/or disability. I’ve noticed that some of these kids get only one square meal a day (subsidized at school), but they have very expensive toys and their parents never seem to have a lack of beer and weed. I’m not saying that this generalizes, but the recent bestseller Hillbilly Elegy suggests it is a thing. Some fraction of people don’t make good choices with money, and their kids (at least) suffer real consequences.
The point? Going back to Sarris:
I think a better way to steelman this is to say that money isn’t what we should try to guarantee to everyone. What they actually need is nutritious food, secure shelter, sanitation, and healthcare. I think some version of this might actually be within spitting distance of the Overton window and maybe even economically possible in the foreseeable future if bootstrapped from existing institutions.
What they actually need is nutritious food, secure shelter, sanitation, and healthcare.
And who decides what counts as adequate provision of each of these things? I get the argument that some fraction of people won’t be good at making these choices for themselves; but everything I know about government bureaucracies tells me that those will be even *worse* at it.
That may well be true; I’m no fan of giving this sort of responsibility to government. I’m merely pointing out that money isn’t the fundamental need, and that it might be no harder to meet the actual fundamental needs than it is to try to figure out a fair UBI.
For example, can a single uniform UBI can fairly meet the needs of people despite widely variant costs of living between different areas? It might be fairer and more rational to make sure they all get an equivalent nutritional ration and living space etc.
I guess I am confused. This , to me is support for the purely Libertarian “personal responsibility” support of a UBI program, that also replaces a large chunk of existing welfare programs administered by the government (which costs lots of $$$ to merely administer)
I keep thinking of the scene in The Shawshank Redemption where the warden gets the pie from the contractor with the kickback money in it. The allocation of basic jobs will be a political football of galactic proportions, and it’ll be a damned slippery football once the corruption is smeared all over it. I think this alone comes close to disqualifying basic jobs as a serious option.
But UBI is really, really, really expensive, if done without means-testing. Yes, I understand that we under-tax at the federal level compared to a lot of other OECD countries. Yes, I understand that Hauser’s Law is really more Hauser’s Observation (“How’s your maneuver coming along, Dr. Heimlich?” “Well, so far it’s not really much of a maneuver–it’s more of a gesture.”), but so far nobody has adequately demonstrated that the observation doesn’t hold invariantly for the US. So: it’s prudent to assume that we can stretch the entitlement pie very little, and that sure seems to militate toward something that’s means-tested, with a lot of reform of the existing system.
There is a reasonably simple way of getting most of the non-gatekeeper-ish aspects of UBI while ensuring that it only goes to the most needy: You make UBI taxable income, and then put a very high marginal income tax rate on earnings just past the amount of the UBI stipend.
Example: Today’s marginal rates on taxable income for single filers, assuming the standard personal exemption and standard deduction, are roughly:
$0-$10K: 0%
$10K-$20K: 10%
$20K-$48K: 15%
$48K-$102K: 25%
$102K-$202K: 28%
$202K-$427K: 33%
$427K+: 39.6%
Suppose you provide a UBI of $10K/year/person, but you want an easy way to means-test it. You make the UBI taxable income and set the marginal rates like this:
$0-$20K: 0%
$20K-$45K: 50%
$45K-$48K: 15%
$48K-$102K: 25%
…and so on.
The idea here is to claw back the UBI once low-income workers have a little breathing room, without completely discouraging them from working. This isn’t quite as bad as your typical welfare cliff, where earning a single marginal dollar can cost you thousands of dollars of lost benefits, but it definitely makes earning $10K-$30K a bummer. However, it’s a lot less of a bummer than having the federal budget collapse and losing all support.
I agree with Scott’s answer to the objection about rent-seeking in #iii, bet it still begs the question: If any kind of low-end subsidy gets discounted by landlords, what’s the point? I’m unpersuaded by the “you can move to Walnut Creek because you don’t need a job downtown” argument, because there are a whole bunch of sellers of goods and services whose business is disproportionately low-income customers, and they can all gouge just a little bit harder and get away with it.
This transforms the argument from a pure abuse of rent power to something closer to selective inflation, and that’s extremely bad from a budgetary standpoint.
Anybody who’s serious about coming up with a sustainable solution to poverty has to understand that US entitlement spending, at close to 60% of federal outlays, is already crowding out essential “discretionary” spending. Converting the existing entitlement system from something that mostly supports middle-class retirees to something that actually reduces poverty requires staring at some very uncomfortable political choices. But I’m sure that the courage and integrity of your average congressperson is up to the task.
Just remember, Hauser will be watching, and likely laughing his ass off.
I really don’t understand how people just assume that business owners will be free to increase prices. Does competition not exist?
Forget business owners. What business owners want isn’t significant here; prices of goods are determined by supply and demand. The demand effects of a UBI (plus the taxes to pay for it) are not going to be consistent across income levels, but we could probably expect demand for things like WalMart diapers or McDoubles to increase as more people in their target demographic have the money to buy them — and supply might also be expected to decrease as some number of marginal burger-flippers and WalMart greeters drop out of the labor force to live on their UBIs, though that’s less predictable. So their prices will go up. How much? Dunno. But they’ll go up.
The reverse is true for the prices of things like yachts and Gucci handbags.
I have so many problems with this article and it’s murderous delusion of utopia on earth, but I also have limited time, so…
“Basic jobs don’t help the disabled.”
I’m against “basic jobs,” but let’s be reasonable. They do help the disabled. Disability comes in many forms, and there are jobs that all but the most catastrophically disabled can do. For instance, my blind grandfather had piecework delivered to his house until minimum wage laws prohibited it. Charity is appropriate for those so severely disabled that they cannot be productive enough to feed themselves.
“Basic jobs don’t help caretakers.”
Anyone taking care of their family is their responsibility. You might ask why families don’t do this as a general rule, but the fact that they may not is no justification for screwing up society even more. Be a good parent and your kids will take care of you. And if they don’t, that’s on you and them, not me. You’ll just distort society even more by doing this. Think it through.
“Basic jobs don’t help parents.”
Again, what you’re thinking of is charity. Remember, we are a world of humans, not animals. People are responsible for the kids they have. Just because you had kids doesn’t mean you won the prize of not working. Think it through. Do you think the rise in the welfare state, which specifically tells women that if they have kids and no man they get money, has had anything to do with the rise in children born out of wedlock? Do you think this contributes to the poverty you’re so concerned with? Do you think this contributes to the problem of children not taking care of their parents in their old age? Think it through.
“Jobs are actually a big cause of poverty.”
What a joke. I feel like I’m reading Slate, not SlateStar. Move. Get a different job. I want to be a Thai stripper, but the cost of flying out for each shift would bankrupt me in a week. Scott, are you proposing to give me a UBI because of this “problem”?
“Basic jobs may not pay for themselves by doing useful work.”
Well no shyte. Neither would a UBI, right, but who’s counting? They are both terrible ideas, but to defend doing nothing for money by saying that it’s more efficient than doing something for money is not using your thinking cap, let’s say. You say: “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.”
Scott, have you considered that it might be a bad idea to set up a lethal bureaucracy to extort honest, hardworking people so that the bureaucrats can transfer wealth to people who act like this? Is your argument really that we have to take money at gunpoint from people to subsidize this behavior?
“Private industry deals with bad workers by firing them; nobody has a good plan for how basic jobs would replace this.”
LOL. So you’re worried that terrible people will not be able to be fired from picking up trash on the side of the road, and your solution is to just give them money instead? So they have ZERO motivation to improve themselves? So they are REWARDED for being as difficult as possible and for contributing as little as possible to society? Holy Flirking Schmidt.
I believe that charity is a better solution because it implies that the receivers must conform to some standard in order to receive it. Now you are thinking, “Well, then it might work out that not every single human being gets goodies!” But that’s just the Nirvana fallacy. No system is perfect. But let’s not try as hard as we can to create one that incentivizes bad behavior for crying out loud.
“Private employees deal with bad workplaces by quitting them; nobody has a good plan for how basic jobs would replace this.”
I’ve got an idea: Suck it up and keep working until you’ve acquired some other skill and can get your own job. OR, barring that, just suck it up. OR, barring that, be a good enough, deserving enough, person to get charity.
“Basic income could fix private industry; basic jobs could destroy it.”
You said: “Maybe McDonalds has to raise prices; maybe they even have to close some stores. But again, something like McDonalds continues to exist and workers are relatively well-off.” Umm, remember how the poor were given “a basic income at somewhere above subsistence level.” How far above subsistence, Scott? Be clear. Because you know there’s a level above that’s “too much” (though you won’t deal with this problem, you just fudge it).
But there’s a problem, Scott! You start by paying them just above subsistence, but then YOU RAISE PRICES. So you’ve just starved all the people you put out of McDonald’s jobs. Congratulations, you good-hearted short-sighted society-wrecking murderer. Or they have to go back to work, but accept less pay than before to compete with the robots.
“Basic income supports personal development; basic jobs prevent it.”
Such drivel. Yes, in the Utopia, comrade, we’ll be able to be poets in the morning, steamboat operators in the afternoon, and king of the world in the evening… Sure, since we’re just ignoring cost, then taking 1-75 years off work for “personal development” is an unalloyed good. There’s no cost, right? Oh, well maybe then the cost should be borne by that person who wants the time off?
I’m terrified that someone as bright as you, Scott, is reasoning from anecdotes.
“Basic income puts everyone on the same side; basic jobs preserve the poor-vs-the-rest-of-us dichotomy.”
No. This is just a lie. Warren Buffet, and me for that matter, are smart enough to understand that we are net payers into the system. I am not on the same side as someone who, through an armed proxy, appropriates my labor. This level of thinking and of morality is frankly disgusting to me.
“Work sucks.”
Did you originally write this in 7th grade and then pull it out to fill up space? Yes, there is dis-utility to labor. If there wasn’t the world would look very different. But you hold up as examples jobs that people take voluntarily. That they could leave. That they seem to like the pay for so much that they put up with what you’re complaining about… sheesh.
“Studies of UBI haven’t been very good, so we can’t know if it works.”
It won’t work. It has been blown up a thousand times. I dunno, Rothbard is the most readable and enjoyable. Look him up and write a post where you refute his logic. Until then, leave this alone.
I can’t keep going. It’s all so wrong and so … not thought through. Well, it’s thought through, but only the Nirvana Utopia Kumbaya version. Not the Earth in the known universe version. I can’t go on. Doubt I’ll get a response from you, Scott, but if I do I’ll hit the last points.
This was harsh sounding. I love your work. I don’t always agree, but it’s always thought out and I usually learn something. This time, however…
edit: Dang it, I did it again! Love the blog, Scott, and best wishes.
“Basic income puts everyone on the same side; basic jobs preserve the poor-vs-the-rest-of-us dichotomy.”
I forgot this. Basic income puts people into two sides: the people continuing to work to make that basic functions of society keep on happening, and those who have the free time to politically organize for increases in the UBI.
If you want the people who continue to work to support this program, you need to not antagonize them. And having an essay with Work sucks in bold isn’t helping them think “oh, how nice, I’m helping.”
People working 80 hours a week with a UBI in place would be delusional or extremly greedy/focused on some hyper intense goal. The average worker in a UBI system would highly likely still find time to organize politically, and in having a higher income /wealth, would have more clout.
But does that average worker have anything like the energy after an 8-hour working day providing services to UBI bums to argue and organise? Compared with people just living on UBI who have nothing but free time.
As just one recent example, protestors seem to like blocking roads. It won’t matter that they are stopping people from getting to work and paying the taxes that support them: public choice theory says they DGAF about that. I sure don’t have time to get out of my car and engage the crowd; I need to get those TPS reports filed.
The workers are going to be outnumbered by the jobless. Dollars don’t matter as much as votes. The one thing the workers do have is the ability to strike. It would be hilarious to watch the massive change-of-mind as the lower-class talks about how to break strikes and the upper-class talks about how to protect workers’ rights, but I’d prefer to watch that hilarity from far away.
>be a good enough, deserving enough, person to get charity
>it’s thought through, but only the Nirvana Utopia Kumbaya version
Um.
Great reply! “Um” back atcha! I get it and have edited my post to conform to your logic.
Awesome comment, Bill. Fun to read and spot on.
That was the only cringe-inducing section for me. How can a job be the CAUSE of poverty? If you DON’T have a job, you will certainly be impoverished- working offers you a way out.
>How can a job be the CAUSE of poverty?
You mean except for the list of examples given? (Rent, transport, childcare, kafkaesque welfare/disability systems, clothing, time and energy that could be spent living more frugally, etc.)
It’s the two-income trap, but for single people.
If you don’t have a job, you will probably be impoverished and you will probably be looking for a way out. You may find one.
If you do have a job and it sucks in the ways Scott describes, which many real jobs do, you will still be impoverished but you will be too busy and too burdened with job-related expenses to look for a way out.
Since our society does not and will not let unemployed people literally starve to death, it is plausible that a poor unemployed person has a better chance of escaping poverty than does a poor employed person.
I find that strange since a poor employed person can always choose to become a poor unemployed person.
Rather than a universal jobs guarantee, we could just reverse a lot of the government jobs losses from the 2008 recession. Making stuff suck by cutting funding and then pointing to its suckage as an excuse for cutting more funding has been in the core playbook of the small government types.
I was in Turkey in 2011 and while I don’t know why, they had massive staffing at every government agency counter I had to visit. All the service windows were open at the post office, airport, etc. It was so glorious. I had no idea that was possible, and now I want it for the US too.
Cronyism.
I mean, sure. But what if cronyism gives us good things sometimes? I’m so confused.
All government employees, January 2008: 22,388
All government employees, January 2018: 22,319
(Source)
Per capita, the lowest level since 1984, e.g. immediately after the second-worst economic crisis of the 20th century.
Fair point.
It’s a drop of about 7.5% in the per capita figure.
Apart from yelling “FUCK YOU”, which I do appreciate, I think we might want to give equal time to yelling “BROKEN WINDOW FALLACY”. In this simplified UBI world, Susie gets a paycheck, and she has 40 extra hours per week to do with as she pleases. In this simplified Basic Jobs world, Susie gets a paycheck, and society gets the economic value of whatever her job is. To compare those two things, it’s not enough to argue that that economic value of the job greater than zero. You need to argue that it’s greater than the economic value of whatever Susie would have done with those 40 hours. The hours don’t disappear!
Obviously that’s not an easy question to answer objectively. If Susie loves playing Xbox, what dollar value do we give to an extra hour of her being able to do that? Who knows. But we can’t just say “Basic Jobs create transactions” and leave it at that. It’s not enough to account for the visible transactions directly caused by some policy; we also need to account for the invisible, missing transactions that don’t happen because of the policy.
“…cost disease is mainly caused by creeping socialism…”
In my ignorance I must ask someone to unpack this one for me. This sounds like an important argument/narrative that I’m not aware of. What is the proposed mechanism/evidence for this?
The problem I have with a UBI is that it is mistakenly promoted as a SIMPLE solution. It’s not. It mostly just shifts complexity elsewhere. To the extent that it’s possible for the government to solve social problems with redistribution, it has two types of tools at its disposal – transfers and taxation. It’s the combination of the two tools that dictates exactly what kind of redistribution is happening. If optimizing the redistributive outcome is like solving an equation, then instituting a UBI is like setting a few coefficients as constants. This MIGHT simplify things, but depending on the nature of the equation, it could just as easily be tying our hands. Either way, once we institute a UBI, the ultimate outcome will ENTIRELY depend on the taxation half of the redistributive toolkit.
Figuring out who benefits from a transfer usually isn’t that hard. When someone receives a transfer payment and buys an apple that they wouldn’t have bought otherwise, they are a beneficiary of that transfer. But who is burdened by that transfer? Redistribution doesn’t create wealth, so the apple that beneficiary eats has been taken out of someone else’s mouth.
One of my favorite economic lessons is that a tax only burdens you if it causes you to consume less of something. If a redistributive policy doesn’t cause YOU to consume less, somebody else must be consuming less if the beneficiaries are consuming more. Based on that, I have a sneaking suspicion that taxes on “the rich” as they currently exist are mostly smoke and mirrors. Doing something like doubling their taxes to finance a UBI might not cause them to decrease their consumption very much.
Imagine Richie Rich spends 5% of his yearly income on consumption (private jet/megayacht lease, maintenance and fuel, servants, high end sex work, etc), 55% on positional goods (houses in SF and the Hamptons, competitive philanthropy, rare art), and 40% on taxes. We institute a UBI and double his taxes. Now he spends 5% on consumption, 15% on positional goods, and 80% on taxes. You might think that means he’s consuming fewer positional goods, but since everyone like him has had their taxes doubled, no one’s position has changed and the prices of those goods should fall enough to allow everyone to consume the same positional goods as before the tax. Ironically, I have heard people use this argument to try to convince the rich that they shouldn’t worry about higher taxes. Somehow I doubt the people making it realized just how true it is. If the rich aren’t going to be burdened by higher taxes targeted at them, somebody else will be.
So where does the burden fall? Part of it will be converted to inflation. Part of it will fall on the recipients of competitive philanthropy. Part of it will fall on brokers of positional goods facing lower commissions. There are likely many other people on whom the burden would fall, and few of them would be “the rich”. The point is that determining the impact of the tax side of the redistribution toolkit is not as intuitive as it is on the transfer side. The people best able to finance a UBI have the resources and motivation to come up with an endless array of taxes that would appear to be targeting themselves, but which would actually fall on everyone else. A UBI by itself won’t be enough to prevent a future with 99% of the populace toiling with drudgery.
There are other things that you can do with money besides spending it on consumption and paying taxes with it. Saving and investing money has historically been another popular option, although less so today.
Take a few seconds and Google what percentage of income people in the top 1% save and invest. Roughly 40% of “Richie Rich’s” income goes towards savings and investments, another ~30% goes towards federal income taxes, and the remaining ~30% is spent on some combination of consumption plus state and local taxes.
Notice that their savings are pretty much the same amount of money that you’re proposing to tax away. Except positional goods as you’ve defined them are zero-sum, while investments are positive sum. In other words your tax that “won’t burden” the rich is forcing them to adopt the same habits which keep the rest of the country poor.
The possibility the 1% might invest less under higher taxes doesn’t detract from my point. First, I’m sure some of that 40% savings and investments are positional goods. Real estate and rare art count as investments. Second, whether reducing their investments would burden the rich depends on what they were planning on spending their investment proceeds on. If they were mostly planning to use the proceeds on positional goods, then they haven’t really been burdened by the tax. Finally, as you said some investments are positive sum for society. To the extent that a tax on the rich means a widget factory doesn’t get built, everyone who consumes widgets would share part of the burden.
A UBI paid for via higher taxes on the “1%” results in shifting existing wealth from investment (using it to produce even more wealth in the future) to consumption (using some of it up).
One fairly obvious negative consequence of that is significantly less overall wealth in the future as this process compounds over time.
That may not seem like a big deal to you, but it’s that process of compounding wealth from investment over time which has caused the current situation of much higher standards of living compared to a couple of hundred years ago. Where that process has been derailed, we seem to run into what Heinlein called “Bad Luck”.
Do you have empirical evidence for this? Higher taxes tend to squeeze people closer together in income; if what the wealthy care about is relative income (for status reasons), they have an incentive to invest more (and work harder) in a high tax environment to keep their income up and counteract the squeezing effect. IIRC, at least some studies have found that increased taxes (within reason; up to, say, 60%) are for this reason more likely to increase investment than to increase consumption by the wealthy.
Don’t you also want open borders?
“Basic Jobs” and “Basic Income” are both well-intentioned but evil because they undermine major economic incentives for a human to love other humans tangibly. If I had a good job and a good income but no tangible love from my family or a surrogate for my family, I would want to die. Those who are too old, disabled, disagreeable, or for other reasons unable to support themselves need not just food and shelter, but to be under the personal care and supervision of relatives in their extended family. And family isn’t strictly biological. Think of adoption and of lifelong servant roles.
What governments should do is (1) enforce the right of the individual to be cared for by his family and/or to be placed in a family that will care for him, (2) enforce the authority of leaders of families, and (3) provide material assistance to the leaders of destitute families, unless/until those leaders prove themselves irresponsible.
Also, governments should cease disincentivizing the multi-generational cohesion of extended families. Two major discincentives are Social Security and no-fault divorce. An old man should be dependent upon the younger, productive members of his extended family, not upon a faceless mass of younger, productive taxpayers who do not love him. And alimony and child-support payments do not absolve a man (or woman) of a lifelong obligation to personally care for his spouse and train his children, an obligation governments should try to enforce.
It might be interesting to run a pilot program version of UBI as a test. Say, choose ten thousand or so of the active social security numbers at random and see how it works for them.
Admittedly, this doesn’t tell what would happen if UBI were guaranteed in a nation with open borders, but it might produce some informative results. Anyway, being random, it would be far from the most corrupt and stupid use of federal funds out there.
Sounds like a good experiment. We could call it a lottery and give the winners say, 20 years of annual guaranteed payments.
Heck, I bet people would even pay a nominal fee to participate in it and we could divert half of the proceeds to help fund the government! 😉
“Guaranteed jobs” isn’t meant to be thought out. It’s an empty slogan for a stupid, unworkable policy. The reason why it’s becoming popular on the left is that empty slogans for stupid, unworkable policies win elections.
You might as well write a thinkpiece about why building a wall won’t stop illegal immigration.
My issue here, and this comes from someone convinced of the futility of the Keynsian approach embodied by basic jobs (the left wing are clearly bored of re-hashing the bad ideas of the 1970s and are going back to the 30s for their inspiration now…), is that basic jobs appear to be much safer for a functioning democracy than basic income. Democracy is ill served if leaders are able to use their power to effectively bribe voters: any study of the working of machine politics in US cities, or of the small electorates of English rotten boroughs, will reveal this. Basic income is a tool that in the right hands could be used to bribe voters by promising an increase in the income; in the US at least I find it easy to imagine populist figures on both sides of the political divide promising voters higher basic income. Democracy requires a certain restraint from voters and basic income would be a potential danger to this by creating a clear incentive for voters to focus on self-interest in their decision making, to a degree not currently seen (mind you, it is possible I’m just repeating arguments made when income tax was introduced…).
Even if this didn’t happen, if basic income on a national scale turned out to be a failure, what would be the odds of getting it repealed when the recipients are the electorate? I wouldn’t like to bet on this, which means a national scheme has to be considered permanent if introduced.
Basic jobs, as part of welfare, would be treated differently and other than the creation of more people directly dependent on the state (yes, I am fairly libertarian…) is therefore not a danger to democracy in the same way. Obviously, as Scott demonstrates it is a silly idea on lots of other grounds. But however there is always the option of doing neither, which looks most sensible from the point of view of preserving democracy and not trying to follow the familiar socialist pathway to economic collapse.
Plus 1.
To summarize the argument so far,
1) we can’t afford it at any level that the proponents suggest it would work (I am all for the idea at $10 a day plus Medicare but no one seems to agree),
2) it would incentivize horrible behavior, especially not working, not getting a productive education, not developing marketable skills, not relocating to jobs, and having lots of kids (aka lil’ ubi’s),
3). It would penalize anyone continuing to work, leading to a death spiral, and
4) once implemented it would be an undieing program where the masses vote themselves steadily higher incomes, while criticizing the “privileged rich”.
I cannot see how anyone, other than those on the far left who want to replace the current system with socialism, can see any appeal in this idea. I would be willing to bet huge sums of money this idea if ever implemented on a large scale, fails spectacularly. Problem is it would fail so hard nobody would be able to pay their bets.
I think a lot of people who see the appeal believe we are on the verge of a technological society where the top 1-10% of the population will be the only ones capable of effective work, and robots/AI will take care of the rest. This society will have enough resources to support everyone, but without some mechanism for equitably distributing to everyone it will result in a permanent miserable underclass that will either revolt or live miserable repressed lives.
I don’t really think that’s true, and if it ever is it’ll probably not be for another 25-50 years. I think we have plenty of high to medium skill jobs, we just don’t have people either capable or motivated to do them. I don’t think UBI solves that at all, in fact it will likely make it much worse.
Yeah, In robot utopia this idea has a lot of merit. Of course implementing it prior to robotopia will likely derail ever getting there.
This is the elephant in the room.
I think Scott made a big mistake by not mentioning it, resulting in a lot people talking past one another.
A lot of the objections made in the comments section go away *if* a sizeable chunk of the labour force are made unemployable my machines:
‘I think GJ is worse than UBI, but both are worse than the status quo.’ The status quo isn’t an option. Pretending it is leaves truckers to starve.
‘Utopianism is dangerous: If it ain’t broke, don’t fix it’ It’s going to break whether we like it or not.
‘Where does the money come from?’ Automation vastly increasing productivity. If labour is worthless, capital is correspondingly more valuable. Tax the people with capital.
I support UBI if and when a large minority of people go long-term technologically unemployed.
@Lambert:
> The status quo isn’t an option. Pretending it is leaves truckers to starve.
The ‘technological unemployment’ theory is precisely analogous to the ‘China is stealing our jobs’ theory; both are falsified by the law of comparative advantage. I have written an essay on this — http://jttlov.no-ip.org/writings/no-robots.html — which it seems to be my designated fate to repost links to on SSC every couple of months.
The latter half of that comment should be taken as a hypothetical.
I don’t know whether it’s going to happen or not, but a lot of people think it’s plausible enough to be worrying about.
I don’t have the economic chops to do this quantitatively, but I ought to point out that labour is an awful long way from being a spherical free market in a vacuum.
With enough friction, comparative advantage breaks down. Maybe Uber and MTurk and all that can reduce friction costs an order of magnitude, maybe not.
Tl;Dr: Sufficiently advanced technology is NOT indistinguishable from Portugal.
> With enough friction, comparative advantage breaks down.
To which the answer is, stop throwing sand in the gears. The friction (a Coasian analysis would identify it as _transaction costs_), while partly coming from unsolved problems (which technology is fixing at least as fast as it’s automating away existing jobs, and in some cases (e.g. estate agents) the need for those jobs _was_ the friction), mostly comes from all the ways the State forces us into rows of perfectly square boxes so that it can tax us.
In a truly _free_ labour market, Uber and MTurk would be not merely unremarkable, but perhaps even rather quaint.
Besides, friction only hinders movement towards equilibrium, it doesn’t prevent it. Thus, for any given level of friction, there is a maximum sustainable disequilibrium, and it takes a _lot_ of friction to sustain a disequilibrium like “99% of human race starves while robots produce vast quantities of goods”.
(Congratulations on the Clarke’s Third Law joke, though, that was _brilliant_. I may have to steal it 😉
It’s a little more complicated than that.
Suppose technological progress makes capital enormously more productive than in the past. Workers can still do the same things and produce the same stuff as before but to do so requires capital as well as labor, and capital is now much more expensive, so the wage producing those things is lower than before.
The same argument applies if the other input is skilled labor, of a sort now much more productive than before and so commanding a higher wage.
Either way, it is possible for technological progress to cause some forms of labor to receive a lower real income than before. You may not want to call that technological unemployment, but most people would say that if the only job you are qualified for pays a real income of three cents an hour you are unemployed.
It’s worth noting that Ricardo, who invented comparative advantage, notes this possibility in his Principles. Chapter XXXI On Machinery.
I don’t, as it happens, think this is likely to happen, but it isn’t logically impossible.
> It’s a little more complicated than that.
The same complications apply to the international trade case, no? So the “precisely analogous” bit holds, and it’s the “falsified” claim you’re disputing/nuancing?
> but to do so requires capital as well as labor, and capital is now much more expensive
In real or nominal terms? I’m struggling to follow the argument. (Personally I’d find a mathematical model easier to work with than words; maybe I should try to construct one.)
In particular, while an effect of this kind _can_ move capital into working with a particular subset of labour, thus depriving the rest of labour of its augmentative powers, I don’t see how the real wages of the latter can fall below what they would be in the absence of any capital in the system. (This should be much higher than those of primitive man, since the division of labour can still operate _its_ augmentative powers).
So while technology can make some individuals worse off than before (I don’t dispute that. So can trade. So can _any_ economic change; pecuniary externalities are like that), I’m not sure it can taketh away anything it didn’t giveth in the first place. Whether that’s relevant is another question — it depends on what one thinks the “technological unemployment” theory claims.
One other point to note is that capital formation will be incentivised by the higher price of capital, applying a restoring force; moreover, higher-priced capital means that a worker needs to create less capital to derive a given income from it. (Of course, it _also_ means that a worker who gets into debt is more likely to find the debt-service ruinous.)
> It’s worth noting that Ricardo, who invented comparative advantage, notes this possibility in his Principles. Chapter XXXI On Machinery.
I do indeed note that in the first paragraph of my linked essay.
Correct.
Not the case I was considering. Current real wages are the result of the availability of capital (and land) at a particular price. Dropping the real wage of labor to what labor could produce with no capital could get it lower enough to count as involuntary unemployment by modern standards. And that’s even without considering the fact that labor generally uses land as well, and in theory that too could be bid away into more productive uses.
Yes. I think if you told a believer in that theory that the unemployed worker could still wander the woods collecting acorns and deadwood and make an income greater than zero, the believer would not take that as a rebuttal.
Correct. In a plausible version of one of these futures, any worker with sufficient foresight and prudence to have accumulated a little capital could live on that.
The basic point, as per Ricardo, is that it is logically possible for technological progress to lower the equilibrium wage received by labor even while it makes the society as a whole richer. Since there is no theoretical limit to how much it can lower it, that’s consistent with the mass unemployment story, given that moderns will take a sufficiently low wage as corresponding to unemployment.
Checking your webbed essay, you indeed write:
If I were making a list of early economists who I would be reluctant to believe had made an error in theory that I could correct, Ricardo would be at the top of it. He doesn’t put his argument in terms of the modern theory that would not be invented for another eighty years or so, but he correctly sees that a change in the production function could reduce the marginal product of labor even with an increase of the amount of capital.
> a change in the production function could reduce the marginal product of labor even with an increase of the amount of capital
Yes, it was the marginal analysis I was missing (silly of me!); if we take (say) the product-labour curve for a fixed amount of capital, keep the asymptote, but make it more convex before that, then the gradient sufficiently far to the right is reduced. The part where we “[make] capital enormously more productive” is separable and irrelevant, except that we can’t reduce the marginal product of labour without either increasing the average product to the left or decreasing the asymptotic product to the right (and the latter is forbidden since the technology can only expand our production possibility frontier; the old process is still available).
And going from one two-dimensional slice to the entire societal production function, we’re basically saying that there’s now a glut of labour that saturates all the capital that the economy can muster, such that adding these labourers to the inputs only fractionally advances the production possibility frontier.
This also, I think, puts constraints on the product-capital curve for fixed labour, since its convexity is also a measure of how much more (in quantity, rather than value, terms; so the constraint depends also on demand curves) could be produced by dividing the capital and putting into motion more labour.
Yes, it’s mathematically possible (albeit, that is one _weirdly-shaped_ production function).
> wander the woods collecting acorns and deadwood
What’s wrong with my argument that “This should be much higher than those of primitive man, since the division of labour can still operate _its_ augmentative powers”? Even without capital, why can’t all these passed-by labourers trade labour for labour amongst themselves and thereby specialise? Or are you saying that acorns-and-deadwood is the limit of what the division of labour can achieve without capital? (Is this because anything more, even if not calling upon fixed capital, requires circulating capital?)
> reluctant to believe had made an error in theory that I could correct
I’m not sure (it being some time ago) of precisely what I was thinking when I wrote that “he of all people should have known better”, but there _is_ an interpretation to the effect that “yes, you’re right that _in theory_ this can happen, but you’re the one who invented the theory that shows _just how pathological_ the premises have to be to produce this effect, so ‘you of all people should know’ that it typically won’t happen _in practice_.”
Though in his defence, as you say, he did not have the modern theory and couldn’t, therefore, talk about the shape of the production function in the way I have above.
I do wonder whether his condition “if the increased production, in consequence of the employment of the machine, was so great as to afford, in the shape of net produce, as great a quantity of food and necessaries as existed before in the form of gross produce” is actually the correct necessary condition for labour to be unharmed; as it constrains only a point-value of the production function rather than its entirety or its derivatives at that point, I don’t think it can be (though, again, no blame attaches to Ricardo for not seeing eighty years into the future). Perhaps that is why he reaches the in-practice conclusions that he does, in which case it is unfair of me to suggest he ‘should have known better’.
Anyway, thank you for the free economics lesson; I have definitely learned something today. Do you mind if I add a link to this conversation as a post-script to my webbed essay?
No problem. Always happy to get people interested in looking at Ricardo. He managed to invent general equilibrium theory without any math beyond arithmetic, which is impressive.
Marshall somewhere discusses the risk of doing economics by analysing particular examples, because your example might have some implicit assumptions you didn’t notice that drive your conclusion. He offers an example of Mill making such a mistake.
Then adds (from memory, so not verbatim): “unless your mathematical intuition is so good that you can, like Ricardo, step from example to example without ever drawing a false conclusion.”
So far as the world without capital, I was assuming division of labor. After I gather deadwood in the forest I trade some of it to the villagers for some of their potatoes.
> mind you, it is possible I’m just repeating arguments made when income tax was introduced
One man’s “proves too much” is another man’s modus tollens. It is also possible that income tax _is terrible too_. There’s a lot of ruin in a nation, especially when the long boom of the Industrial Revolution and consequent demographic transition has been frantically patching up the damage for centuries.
I’m torn. On the one hand, this is a really well written piece. I also have fond memories of carefree summer vacations, and not-so-fond memories of people that I can’t imagine being useful for any sort of work.
On the other hand, I also remember when I was unemployed, how easy it was to fall into a routine of laziness, depression, and bad habits, and how hard it was to break that trap when I had a huge gap on my resume and no-one wanted to take a chance on hiring me. I also look around and see a lot of jobs not being done, which could really help society if they were. Building more housing is one obvious example. Can’t we take some of the people like I was- reasonably healthy and intelligent, but unemployed or marginally employed- and find something actually useful for them to do?
Traditionally, there *was* a program like this- the army. Anyone who can march and hold a gun was easily put to work. If they caused trouble, there were super hard-ass drill sergeants to keep them in line. If the sergeants or officers caused trouble, there’s- at least on paper- a process for reporting them, too.
Luckily our modern military no longer requires massive amounts of cannon fodder. But that does unfortunately take away the one path that was always there, the job of last resort, and also a time-honored means of teaching discipline and work ethic to the young people that need it most. The army is now having trouble finding recruits that can pass it’s entrance exams.
Is there a model for using military-type organization to make civil infrastructure instead of war? Yes. Now this is very much a “I have noticed the skulls” disclaimer here- you’d have to be *very* careful in how you implemented this- but Mussolini rather famously made the trains run on time.
What I’m proposing would be something like a low-skill Army Corps of Engineers. Take anyone who wants to work, and put them through a boot camp. It doesn’t have to be super physical like the army boot camp, it could involve just waking up on time to use construction tools or something. Anyone left at the end gets a job, for as long as they want it, but they are subject to army-style discipline. It doesn’t have to be cost effective, because the point is as much to train people in construction skills as it is to actually build things- but if we went crazy and build a ton of extra houses, we could potentially beat cost disease at the same time.
When I read people talking about working Americans being poor, I can’t help but call them whiners. I’m Hungarian. The average Hungarian salary is approximately as much as the American minimum wage at purchasing power parity (that is, accounting for the lower prices), and we still make do. And there are countries as much poorer than Hungary as Hungary is than the US, and they still make do. And there are countries as much poorer than those countries as Hungary is than the US, and they… nah, those places are pretty shitty.
I’m currently living in Italy in a mid-sized town (prices similar to the US, I guess), and I spend little more than half of the American minimum wage.
Sure, I can believe that a working American may get into financial trouble, if he makes poor spending or planning decisions. E.g. buying a house on a mortgage he can barely afford, then if he gets fired and gets a lower paying job, he’s in trouble. With basic income, he would buy an even bigger house when he has a good job, and then get in just as much trouble. That girl who got pregnant? She couldn’t afford good birth control without decreasing her spending on some other stuff. With basic income, she would’ve been used to a somewhat higher spending, and still
couldn’t havewouldn’t have wanted to afford birth control. From what I gather, Uber drivers make around $10 an hour. Can that guy who drives 80 hours a week really not survive on any less than $3200 a month? Can’t afford a car? Take the bus. I get that public transport is pretty bad in the US, but is it really that nonexistent? (If yes, why?)Of course there are legitimate reasons, such as caring for a sick relative.
(Btw I don’t understand the discussion about which family member gets to care for someone. Why not just pay the sick person enough insurance money to pay for a caretaker, whether any family member or a hired person?)
So I’ll take a stab at your Uber driver example, or at least the numbers you presented:
So say he makes 38400 a year at 80 hours a week; if he really drives that much, he has to either replace the car about once a year or have a super-expensive lease. He immediately only makes about 32,000 a year, takehome. Let’s assume he replaces the car once a year with a car that costs about 8000; he’s now at 26000 a year. Let’s assume his accumulated utility bills are about 200 a month(which would be cheap, most places) and he’s at about 23400. Let’s assume he rents a one bedroom apartment at about 600 dollars(cheap, in most metropolitan areas, in a bad neighborhood and a bad complex but slightly less likely to get burgled in any given month than otherwise) and he’s at 16200. Say he has car insurance built for Uber(which he must) and that this insurance, liability only, is about $150 a month. he’s at 14400. He has to have a cell phone; the cheapest his service could possibly be is about 40 a month. He’s at 13980. He has to have health insurance; that’s about 150-ish a month at the dead cheapest, so he’s at 12180. Realistically, he’s eating out for every single meal; at an average of $8 a meal, $6240 takes him to $5940. So at this point, he has to pay for the entirety of his vehicle maintenance, medical copays, entertainment, clothes, toiletries. He might make it, or he might not if anything significant goes wrong, or he gets in a car accident(his insurance was priced at liability only). And that’s if he’s single. If he’s supporting other people, he’s just not going to make it without significant subsidies.
First, I’m not sure what numbers 10240 is drawing on, but the ones I’ve seen claimed an uber driver made ~$10 an hour after expenses. This would obviously make a huge difference since you would no longer be counting on the order of 10,000 dollars a year in car expenses.
See note above about estimates of Uber pay.
This is on the high end for one person everywhere I’ve lived. I’m not sure I’ve crossed this threshold for utilities unless you count utilities that are often part of rent like water and garbage. Even then… a more typical amount I’ve paid would be $110-$150 a month.
On the other hand, this sounds too low to me for most high density areas. Some cheaper areas, I think may still be densely populated enough you could get a lot of uber hours in but I’m very unsure.
Maybe the difference here is in how where we’ve lived affects how we got billed for a few utilities. Whether bundled with the rent or not.
All of these sound reasonable.
Eating out for two meals a day every day at $8 a meal? There are leftovers. There are rice cookers. There are $5 footlongs. I’m sure there are plenty of people who max out carry out spending when they don’t have too, but it doesn’t take being a spartan to cut this bill by 1/3. There are very easy ways to do so. A spartan would get this down well below half of $6000.
Entertainments, clothes, and toiletries are very cheap. After adding back another $2000 wasted on a crazy food budget, we’re at more like 7500 a year for mainentance and medical copays. I’m pretty sure that’s enough although not great.
But my broader complaint would be that 38,400 dollars is roughly the 33% of the household income distribution. This is not a terrible income (although the work hours are insane which would make life terrible). This isn’t middle class by any means, but it could reasonably be described as upper lower class. Except maybe for the crazy work hours.
I don’t think the food budget is particularly crazy, considering he’s essentially spending every waking hour of the work-week in his car. I did the math weird, but what that’s hiding is that I didn’t count his weekend meals(or any supplimental snacks and beverages, although its hard to sell these as a necessity) and tried to roll them into the quick math as best I could. As for leftovers and rice cookers, I find those are usually fixtures of a world where you aren’t working 16 hours a day; 16 hours of driving a workday isn’t leaving people with “cooking and planning” energy.
That being said, it’s entirely possible my math is pessimistic, and good on you for checking. I still hold that it’s unsustainable, since one major car crash removes his income directly and 16 hours a day is likely to generate some health problems sooner or later that eat those copays pretty fast.
More importantly, though, I think the original question is “cheating” a little bit, in a minor way – rephrased, it goes “well, why is this guy whining if he can work two full-time jobs with zero time off and survive?”. The easy way out is to go “well, because that’s a terrible and unsustainable lifestyle in the first place, and wouldn’t give any kind of space for a family or any life outside the job, and wouldn’t generate enough revenue to give much opportunity, either”. I know that’s not the part you are objecting to, but I think it’s relevant to the greater thread.
Isn’t this true for most people though? Although obviously your risk is greatly elevated (~10 fold) by driving all the time compared to the typical commuter. A car crash that wrecks your car is likely to badly injure you as well. Obviously terrible, but I think most people are probably screwed by this. Maybe the top 10% or something is hurt less but it’s still a big hit.
I think the broader point of 10240 was not the throwaway example, but that even most poor Americans are still often rich by PPP compared to the middle class of most countries.
I think the example is just complaining that Americans are profligate often even when they are poor by American standards. This may be true by the standards of most non-Americans. America’s actual individual consumption amount is incredible and surpasses almost any other country (maybe actually every country). Check out the figures in this blog ( top figure from and citing Random Critical Analysis, but the RCA post is about healthcare).
Quanta: It’s true for a lot of people, for sure – it’s true of me, except I am lucky enough to be a bike-able distance from my(non-driving) job. But that’s why I think this applies to more than just the throwaway example – Americans make more money/have more buying power than Ukrainians(probably, haven’t googled) but if life in Ukraine is relatively cheap and Ukraine is set socially in a way that accommodates the poor(everyone you know is poor, every neighborhood is poor so poor doesn’t mean crime in the same way, ect) then it’s not necessarily 1-for-1. Like, for instance, our Uber guy has a ton of car expenses that Ukrainian poor guy doesn’t have, knowledge of how to get by in a cheap way might not be as universal so he might not know as much/be as good at it, ect.
Mostly I don’t disagree that it’s not impossible to survive – like, I survive, and I make less than Uber guy. I was primarily trying to illustrate that it’s not a situation where the guy is blowing all his money on records or something like that – he’s legitimately working very hard and barely getting by, and that’s true considering only his absolutely necessary expenses. He has no margin. It doesn’t mean he’s doing absolutely everything right(he’s a 80 hour a week uber driver, he makes bad choices) but I think it does mean he’s not a wasteful over-spender, either.
@benjdenny
Unless I misunderstand, theoretically AIC (actual individual consumption) is adjusting for all the issues of differences in cost of living, etc. So poor Americans will tend to be richer than middle class Eastern Europeans in almost every way that matters (consumption).
I think this points to a lot of U.S. poverty really being a positional issue. Issues of material privation are relatively rare. There’s probably no good way to fix the positional differences. All you can do is reshuffle. The new reshuffling may be better or worse by some criteria.
I disagree about there being no margin. He has a margin of ~7500 minus maintenance and medical copays. 7500 would be a lot of maintenance and medical copays. I briefly had a car that was 20 years old with ~150,000 miles on it and I spent only a few hundred on maintenance in a year. And it just happened that year a lot of mainentance had to be done. Most years it was just routine stuff that’s pretty cheap. Oil, tires, etc. Even compressing a lot of maintenance into the year for high driving, I doubt you’re going to eat more than half the margin (especially if you plan to just replace the entire car every year anyways).
You have to be pretty old, really unlucky, or need a lot of expensive drugs to incur significant copay expenses. My copy and OTC med expenses per year are ~$100.
He should have a few thousand left over each year. He can save up money over time. He can insure against a significant amount of remaining risk. He can probably do both.
I think the hypothetical worker here is actually doing okay except for the insane work hours.
I’m not saying that there aren’t people in rough places in the U.S. My guess is just that most people who are in trouble are making something like less than half of what hypothetical Uber guy makes or more likely are unemployed.
There is an ingenious solution to this in an SF novel that I won’t name so as not to give spoilers. In a society where the bottom chunk of the population is living on UBI and getting their status playing multiplayer computer games, create a bunch of virtual people to occupy the bottom of the distribution. They, on average, lose at computer games, lose arguments and insult exchanges with the people at the bottom of the distribution of real people, and thus convince the people at the bottom that there are a fair number of people below them.
The problem arises when the fraud is exposed.
WoW does a less dishonest version of this at present. You may be one of the weakest players in the game but you are still super good relative to the NPC’s you beat up.
Speaking as someone who has worked a fair amount at gig economy driving jobs (food delivery instead of rideshare, but close enough), eating at home costs you a lot of work time because you have to drive back to your apartment from wherever you happen to be and then, after you’re done, drive back to a busy area so you can start picking up jobs again. Unless you live in an area that is busy a lot of the time (which means higher rent in most cities), it is almost always less expensive, after you factor in lost income and mileage expenses, to just eat at the nearest fast food restaurant and then immediately go back online after you’re finished.
Granted, some fast food options are cheaper than others. I was especially fond of McDonald’s two cheeseburger meal that cost less than $5 where I worked at the time. But I imagine that in some American cities, $8 per meal during workdays for a Uber driver is a pretty reasonable estimate.
I’ve had the opposite experience. I find cheaper food more easily in cities. Chicago’s been good for cheap food when I’ve tried. New York’s got mid range delis with meals for ~$8; I haven’t been there often enough to know what the bottom is, but I’m pretty sure it’ll be McDonald’s or something. The density of restaurants is just so much higher in cities too.
I’m really not shooting for the “eat every meal at home plan” to shave expenses down though. Just doing what you said and paying ~$5-6 per meal instead of $8 per meal cuts the bill ~1/3 like I claimed was easy. And $5 footlongs or whatever equivalent you can find can be big meals if you want. Like 800-1000 calories big.
It kind of depends on your eating habits. If you eat at the end of the day before you sleep, TV dinners can cut the cost down a little more than $5 footlongs, and a rice cooker really brings the cost down. But it’d be understandable to not want to constantly eat dinner late.
I’m going to be That Guy and point out that you can make a week’s worth of stew/curry/chilli at the weekend, freeze it in batches, then reheat at work, or before work and put it in a thermos.
Replacing an $8,000 car per year? Am I understanding you correctly?
Yes, if you drive 80 hours a week once a year would be conservative.
I love your post. It is well thought out, logical, documented, educational, and WAY too long to have any political impact.
For a Universal Basic Income to get traction we need better branding! UBI is terrible! It’s not quite as bad as Basic Income Guarantee, but it is still really really bad.
What is the initial word picture produced by “Universal Basic Income?” Answer: millions of people living on the dole, that’s what. You and I know, that the able-bodied will want more than what a UBI provides, and will do productive work to supplement the Basic Income, but that requires thinking. Once the Shields are raised, provoking thought is challenging at best.
How about Universal Income Supplement? Or Universal Supplemental Income? This is a bit better. It creates an image of the government turning minimum wage work into living wage work. Many conservatives grok the idea that you cannot raise a family well on the minimum wage and you cannot raise the minimum wage without creating unemployment.
But we can do better. MUCH better.
Try Citizen Dividend. Both words are automatic positives to traditional Republicans. The Republican Party has lots of citizens who are already collecting dividends. There are millions of well-behaved people who collect dividends.
Yes, there are wastrels who inherit a fat dividend producing portfolio early in life who deserve contempt. But to say that getting dividends early in life is always bad is to make an argument for a very steep inheritance tax — as you observed. Renaming UBI to Citizen Dividend primes Republicans for your argument with but two words.
Citizen Dividend also also implicitly addresses the concerns of the new nationalists. It clearly states that the dividend is for citizens only. It also answers the fundamental problem that caused the nationalist revival: How do you have a First World working class when it has to compete against Third World labor? You can answer this question with taxes on imports and immigration restrictions, or you can let wages fall to world market levels and grant all citizens a dividend check.
As far as I can tell, the name “universal basic income” is usually used by people who want to finance it via income taxes and the name “citizen’s dividend” by people who want to finance it via land value taxes.
(I’d prefer the latter. And it’s a pity that Scott didn’t even mention land value taxes except in one throwaway paragraph.)
The old term for it I’m familiar with is “demogrant.”
You can call it Citizen’s Dividend when we’re all truly consensual citizen-shareholders á la https://eldraeverse.com/ (which does in fact call it exactly that). But I think if you try to rebrand the current involuntary-kratist-taxation system and _pretend_ it’s just as good… well, how many Republicans do you know who believe the “social contract” counts as a real contract?
(For those not familiar with the Eldraeverse: it’s basically a Utopian vision of Friedmanite private law plus a populace devoid of the social-primate irrationalities that led us to (as they would see it) screw up so hard we actually vote for tyrants.)
One thing that strikes me as odd: some of the people apparently pushing for a basic job guarantee, including Elizabeth Warren, have in the past heavily criticized e.g. Wal-Mart for the fact that many of their workers qualify for government assistance.
But isn’t that in a sense functionally equivalent to a guaranteed basic job? The Wal-Mart worker doesn’t produce enough value to justify a “living wage”, so the government makes up the difference with a subsidy in the form of benefits.
That’s exactly what guaranteed basic jobs do! You’ve got some group of people that can’t be profitably employed at a “living wage” so the government gives them a job that pays what they are worth plus some subsidy to make up the difference.
A big part of the argument is basically that if Walmart is paying you $X to live, living prices are closer to $1.5X-2X, and WalMart makes profit on the order of $3X-4X per worker then it’s more efficient and arguably better to require companies to pay them at least $2X and it won’t actually hurt WalMart’s bottom line much (arguably it’s also better for the economy as money in the hands of low-income people typically gets spent quickly and translates fairly cleanly into demand.
The other question is who profits; if the government were to provide guaranteed basic jobs, it strikes me as fairly likely that a lot of those jobs (at least in theory) would go toward infrastructure projects for things we badly need (ranging from obvious basic things like caring for public spaces to difficult and dangerous work on things like road repair, rail expansion, water/sewer/electric maintenance, etc.) where the public would be paying them to provide a public good. At least in theory a jobs guarantee like what Warren wants would simply be “The public needs a given thing Y, so it pays people a decent wage to build Y with minimal overhead”. The details would likely be a lot more complicated, and I could easily see it getting corrupted quickly if it moved outside a WPA-type thing.
The overall concern with jobs that pay so little that people are taking out welfare while working is that the public is now effectively paying executives and shareholders at a few poorly-behaved megacorporations and seeing little to no direct good come of it. I would also question the idea that people who work at WalMart don’t add enough value to WalMart’s bottom line to be employable at a living wage.
The government already does employ a lot of those people. There’s a good case to be made for them hiring more of them, though they’re largely union jobs, so it would be expensive.
Hiring a bunch of currently unemployable people to do those jobs for cheap, only to piss off the people who know what they’re doing and spend a bunch of extra money on healthcare when they get injured is probably going to be much harder to implement — and maybe not even cheaper in the long run — than simply hiring more tradesmen.
When the Obama administration last tried to get more public works programs going, it looked like the bottleneck was in regulation and zoning, not hiring workers.
The bottleneck was that feminist organizations didn’t want men to get jobs, so they lobbied against it and succeeded.
Ah, that’s a different problem then.
Too bad, because it would be nice to have more updated infrastructure. It seems like it should have been possible to pitch it in a way to make it clearly good for young minority men who are at risk of dropping out of the workforce or something, with images that look more like Detroit than like the Hoover Dam.
That would not have worked either.
The Obama administration’s “My Brother’s Keeper” initiative, promoted as a way to help the overwhelmingly at-risk population of black and Hispanic young men stay out of trouble and in school, was roundly denounced by women’s groups.
They were angry that minority girls were not included even though minority girls do far better than minority boys on many measures, including college degree attainment, and even though a multitude of initiatives already exist prioritizing all girls’ achievement and success.
@ ARod1993 :
I think if you actually do the math you’ll discover Walmart would go bankrupt pretty quickly if it had to double wages. Their margins are thin.
Heck, let’s try it right now: Wikipedia says Walmart’s net income in 2018 was $9.862 billion and they have 2.3 million workers worldwide. divide A into B and that’s income of $4287 per worker. Let’s massively oversimplify and assume all workers are full time (2000 hours/year) – that would mean if they gave ALL the 2018 corporate profit to the workers they could do so by giving all the fulltime workers a raise of about two dollars and ten cents per hour.
To put that another way, their profit per worker is barely 20% of the worker’s salary, not 300% or 400%. Forcing them to double salaries would mean they go from about a 10 billion dollar annual profit to a 40 billion dollar annual loss. If they somehow kept losing money at that rate (and didn’t immediately shutter half the stores to staunch the bleeding) losses of that magnitude would wipe out their entire asset value in 5 years.
Scott,
I am wondering how much of your concern for UBI ties in with your Ars Longa, Vita Brevis mindset:
https://slatestarcodex.com/2017/11/09/ars-longa-vita-brevis/
If you haven’t considered the intersections, I’ll call attention to it, because it forms a lot of my basis for actively persuading people to adopt a UBI as quickly as possible. We are reaching a point, as a society, where to meaningfully contribute to or advance certain disciplines you have to dump a large portion of your life into what looks, to the untrained eye, an awful lot like wasted time…certainly not something society would ever pay for.
I’d even argue that meaningful safe AI research will require huge chunks of the human race to do decades of far-ranging blue sky philosophy with little or no immediate practical application.
UBI is necessary for all this.
I think even this is extremely optimistic. It assumes that after the cost of housing rises, there will still be extra extra left to spend on other goods. There’s no reason to believe this.
I live on an income near if not pretty damn near the poverty level for my state and family size. The reality of rent at a lower income level is that it’s not a “20% of your income, that’s a sensible amount!” situation. The real situation is this: Landlords take low-income people for the absolute highest amount low-income people can afford.
At the level I’m at, I have the choice between:
A. A house in a neighborhood where you can see violent crime happen in broad daylight where the cops don’t generally go, but I can sorta afford it if nothing major goes wrong
B. A house in a neighborhood near that neighborhood where the major SWAT-enforced drug bust next door happened, but it was kind of weird instead of an everyday thing, and I can’t afford it unless absolutely nothing ever goes wrong, ever.
The reason it’s this way is simple and was accidentally told to me by my sister, who manages an apartment complex. She said “well, the place is pretty full, so we are going to raise prices and then fill it back up if people leave.”. It’s pretty simple; they will raise the prices until people can’t afford to have them raised anymore. And guess what? Guy who worked 2 Mcdonald’s jobs still will, after a short period of time, because he is technically able to do that; it was him being technically able to work two jobs that let the landlord successfully rent to him at a price that forced him to the in first place. The landlords will take all the extra money until there isn’t any left to take, because they can and there’s no mechanism beyond massive government price-fixing that would possibly stop them.
With that being said, I’m with the article to the extent that UBI is better than UBJ and I agree with the vast majority of the other points in the article.
You took the wrong lesson from your sister’s anecdote. Landlords do not raise the rent until there’s nothing left to take. Landlords raise the rent until they lose more money from vacancies than they gain from raising it.
In a sane economy, you can go out and build more housing when the amortized cost of building it is less than the market price for rent, sit back and watch as your building fills up, and make a killing at the expense of other, higher-priced landlords. This establishes an equilibrium price for housing somewhere near that amortized cost. In an insane economy, it’s impossible to build housing for any number of high-minded reasons, so vacancies stay low, construction costs don’t bound the housing market anymore, and rents can increase until tenants get fed up and move to Las Vegas or somewhere else where you can still build. That looks pretty similar from the tenants’ perspective, but it has a very different solution.
Except the same logic applies to the builders; they have the market power to be able to raise prices until some people cannot afford to buy, and no reason to stop until doing so costs them more than it gains.
Low-crime, decent-schooling neighborhoods are an inherently limited resource, naturally scaling by population size. Private industry cannot simply manufacture more; only good government can raise the proportion of non-shitty neighborhoods.
And I hold that all this supports my case rather than hurts it – sure, I can believe in a world where we find solutions to this that negate all my objections, but we don’t do that now and there’s no reason to think we’d do that then. Whatever market forces anyone believes exist that push apartment rents to the “take everything the person can technically pay, leaving just enough for survival” would still exist under UBI; I haven’t heard a good argument for a mechanism that would fix that, besides government price-fixing(which is not impossible, but absurdly politically difficult).
I entirely agree with you on that point;’ UBI without successful housing reform would be a grim meathook dystopia straight out of a YA novel. Some people would inherit houses and some wouldn’t. The latter would be reduced to selling sex, and probably their organs, to the former.
You misunderstand the market force: It isn’t pushing people to the brink of starvation, it is trying to push the least productive people out of a saturated market. The problem is that there are more people trying to buy housing space than there is housing space to sell.
UBI doesn’t solve that problem, I grant. Zoning reform does. But thinking of it in terms of evil landlords doesn’t help you identify the issue.
Thegnskald: I don’t even think of it in terms of evil landlords – I don’t think the landlords are even necessarily evil. I just think that’s automatically how housing prices work; they find the place is full and figure they can raise the prices a bit. The people who do contracting for the complex find the place is full, and figure the complex can pay a little bit more, which locks the complex into the higher rent. Eventually both the rent and the maintenance are higher in enough places that it becomes the new market rate. Unless something is in place to stop this from happening, the landlords don’t have to be evil, they just have to not be proactively good as a group. I don’t know of any groups that are actively good as a group.
There is no such thing as “the builders”. There are individual builders, but they act individually, not as a class, and what they’re individually incentivized to do is whatever makes them money. Naturally they want to make the most money they can, but if everyone else is just barely selling their buildings because they’ve set the price so high that apartment managers or whatever can barely afford it, then an easy way to make more money is to undercut them. This drives the price down. In the long run that the equilibrium price comes out to be where you’re still making a decent profit but can’t be easily undercut by someone else building a cheaper apartment building a block over — if it’s possible to build that cheaper apartment building.
This is conventional competitive logic, and we see it play out all the time in people selling cars, cornflakes, and cantaloupes. We don’t see it a lot in housing markets in major cities, but that’s because housing markets in major cities are enormously constrained: benjdenny was describing a cartel’s logic, and it’s a lot easier to run a cartel where the barriers to exit are high.
For the record, it’s entirely possible that none of my logic works at all in rural areas. I have almost no lived experience in those areas.
Private industry can and does manufacture low-crime neighborhoods–currently 4-8 million people live in gated communities. Good schools are harder, when competing with a government monopoly that has a subsidy of about thirteen thousand dollars per student. Put in a voucher system and they could.
I think this is mostly right. Landlords charge as much as tenants can afford and are willing to pay for a certain property. It is impossible to say where the new equilibrium will end up, but I suspect landlords will get some of the UBI given the constrained supply.
As a first order response, tenants may quit some jobs. Or keep multiple jobs but move to a better rental. But as everyone does this, demand for the better places drives up the prices of those until people have to settle for the same thing. Without the ability to create more supply of housing, the eventual equilibrium will be landlords capture the UBI.
Or perhaps, the quality of rentals will improve slightly. But probably not dramatically.
Anecdotally, when my wife and I moved to Guam the first question we were asked when looking at apartments was what my rank was. The military provides a housing stipend and each landlord knew how much it was by rank. So before we were quoted a price, they wanted to know how much I had to spend.
It would be really cool if you could do an adversarial collaboration with Sarris. It seems like y’all speak each other’s language but have very different ideas, so you could work together.
UBI may be a great idea, but I think it is absolutely impossible to implement it in our world. In our world, tens of millions of people are filled with rage by the thought that one single person is getting their tax money without doing anything to earn it. These people would start a civil war rather than accept a UBI of $10 a year. They would prefer a thoroughly satanic evil dictator to a democracy with UBI. Heck, Finland couldn’t even run a two-year pilot experiment with UBI because Finns were outraged by the thought of people getting money to sit in their basements and play video games. Americans, let me tell you, would be at least ten times as mad as Finns.
The point of a job guarantee is that it just might be possible in our system. UBI is not.
*sigh* I’m afraid you may be right.
Your estimate for the temperament difference between Americans and Finns sounds about right – however, I should point out that the two-year pilot experiment in Finland will be completed as planned:
http://www.kela.fi/web/en/news-archive/-/asset_publisher/lN08GY2nIrZo/content/contrary-to-reports-the-basic-income-experiment-in-finland-will-continue-until-the-end-of-2018
I dislike both sides of “from each according to his ability; to each according to his need,” but I do think Marx was right in conceptually pairing these two. That is, I think the psychology that gives rise to one (the idea that a tribe needs to take care of its own), gives rise to the other (that tribe members who can work but don’t are defecting), and it may be hard to separate them.
Russell and Wittgenstein both seem like pretty terrible examples of people who didn’t have to work and yet “flourished”.
Russell was suicidal when he was young, though he may have been less so as he grew older. A quote that stuck with me from his autobiography:
Wittgenstein was suicidal throughout his life and regarded his life as “a living death”. (Three of his four brothers did commit suicide.) He also doesn’t match the story being told – as a boy, he was driven very hard to be an accomplished industrialist. On returning to Vienna after WWI (having insisted on joining the army) he gave away every penny he owned. He lived out his life neither rich nor happy.
Military retirement is sort of a UBI…typically ~$25-50K/yr, for life, starting ~age 40-45 or so. Although there would certainly be sample bias, it would be reasonable to study that group and see how the UBI worked for them. I am retired military, but currently working. My wife does not, which supports your assertion that people who prefer to work will work, and people who prefer leisure time will be leisurely. I will say it’s nice to have “F-you” money, perhaps just psychologically, but nice to know I don’t *need* the job.
On an unrelated note, I didn’t see much concern about the level of gov’t involvement in the UJP…my goodness…has anyone seen how hard it is to close a useless military base somewhere? The amount of new gubmint jobs created to oversee the UJP people will be eye-popping, and no politician would want to kill the problem that employs so many supervisors and paper-pushers and job-finders. Once started, the program would never die.
This is my favorite variant on basic income:
http://blog.samaltman.com/american-equity
Scott, you should try to remember your own bias that you are very aware of which you have mentioned on multiple occasions. You think if you were alive at a time before communism was proven to result in the deaths of 100 million people and untold more suffering you would probably think it was a great idea (or some such). You should, therefore, be very careful before advocating strongly for a system where the possibility exists, however slight in your view, of greatly reducing the incentives necessary for people to do all the countless unfun and not highly compensated things needed to keep our civilization from collapsing, or at the very least wait until after replicators and friendly AI are already around to take care of us.
The world is far more interconnected and interdependent today, 100 million deaths might be the tip of the iceberg next time. I’m terrified of UBI.
I’m no economist but the incentives are still there: it’s just that if people want these crucial goods and services, they are going to have to pay enough to incentivise people to work on them who would not otherwise starve. If they’re so crucial then people will happily pay the increased price for them. It just changes the price at which labour supply and demand balance.
Income tax rates have swung wildly over time. This also messes with the price of labor by tens of percentage points. Yet the basic system of capitalism has not collapsed.
Because not starving or not having a house or any of the bottom 3 tiers of Maslow’s hierarchy of needs aren’t “incentives” to work.
What? They are incentives. It’s just, y’know, the hierarchy has more layers. The whole point of the hierarchy of needs is to make the point that once your basic needs are satisfied, you will pursue the higher needs.
People will still work because they want more than just the basics. You’ll need to pay them more though, because it is true that they don’t want them as much as they wanted their basic needs met. But they still want more stuff.
What of seasonal work? Those who want extra cash can do seasonal jobs, like farm work, maintenance, public clean-up, etc… plus UBI and have a decent quality of living, certainly above the UBI only folks, but not to the extent of doing drudge work for years on end, which is both soul sucking and demoralizing.
That requires neither basic income nor basic jobs. People can get a loan to spend a year studying then get a job with better pay and repay the debt. Observe that this provides better incentives than either of the two proposed systems, especially if there are no laws requiring that people be able to seek relief by filing a petition for bankruptcy.
Are you suggesting funding basic income for 254 million adults with a land value tax? If not, the taxes used to fund it (over five trillion dollars if we assume a basic income of twenty thousand) are going to cause a deadweight loss. That is a permanent, irrecoverable decrease in economic prosperity that you are not going to get back through basic income.
If your intuitions are truly Georgist, do you agree with replacing all taxes by a land value tax and using this to fund basic income? Since land is in all but perfectly inelastic supply, taxing it does not have adverse supply side effects. Mason Gaffney has argued correctly and convincingly that land has ample capacity to fund even a large government. And contrary to people who dismiss Georgism after thinking about it for less than five minutes, assuming that because the most obvious way to tax unimproved land value requires measuring this value which is hard there is no practicable way to tax it, Donald Shoup has shown that parking meters are very practicable and very efficient! So let’s fund basic income with parking meters. Who’s with me?
I once spoke about UBI with a friend a he had he asked: “What about all those neo-nazis and other idiots? They are pretty bad today. What will they do if they have all their time free?” It’s an argument so alien to me that it almost hurts. Maybe it will be counterbalanced by good people having more time to do good stuff. But how do we know?
I fear that UBI is not a stable equilibrium in our democracy. People on the left will chafe at the thought of hedge fund managers or millionaires getting the same UBI as the poor. People on the right will want to reduce benefits for people who are “misusing” them by spending them on drugs or other socially frowned on things. And there’s always a nice-sounding reason to increase the benefits for one group or another. For example, shouldn’t elderly people get more, because they have higher living costs? Repeat this 1,000 more times for the next 1,000 plausible-sounding disadvantaged groups, and you’ve arrived back at something that looks a lot like the current welfare system.
Politicians run on a platform of changing things. “I have constructed a perfect system– let’s never change it” is a nonstarter in a democracy, even if it happens to be true.
I’m not in love with the idea of McJobs, but I do think we need some kind of social structure to replace mass employment, if it ever goes away. If this ever happens, the American combo of capitalism and democracy will essentially be over, since there will now be a huge voting block who are at best indifferent, and probably actually somewhat hostile, to capitalism.
I agree with your argument for the most part, but you do give too little credit to the idea that work can provide meaning. As you say, there’s all kinds of work that is just monotonous grind and provides no meaning at all, so it doesn’t exactly damage your argument, but still. Anecdotally, as someone who spent the last few months unemployed but supported by my family, and who is now working a freelance job I do online (i.e. no structure, no community, no seeing-people-face-to-face), I would absolutely trade all the leisure time and freedom this afforded/affords me for a “real job”. Mostly unstructured leisure time over a long period means the freedom to wallow in depression and loneliness for me. Granted I probably have deeper issues than most with finding meaning and happiness in my life, but so do a significant number of people, as you well know.
None of this is to contradict your general claim, I agree that basic income sounds better than basic jobs. But it detracts from your argument that you’re so dismissive of this concern.
For me the best reason to think about UBI is this… on a long to medium timeline almost everyone is going to be unemployed anyway. If the only people earning money are the 1%(or even the top 10%), how do you plan on preventing class war and inevitable economic collapse?
Even if AI can’t go super-intelligent, what we’ve got RIGHT NOW basically invalidates the majority of jobs that don’t involve face to face human interaction once we get around to working on it (and make it more cost effective). Robots tend to not smell of marijuana (or pee) and generally don’t yell graargh at people. Also no-one tends to mind if you run them 24/7 with the occasional recharge break. I’m not suggesting this is next week but this next decade doesn’t seem unrealistic.
How are you planning to guarantee a job when everything that doesn’t require you to be personable or educated is literally not done by humans anymore? Basic Jobs just seems like an invitation to dare companies towards automating everything possible just to avoid opportunistic lawsuits.
Actually there’s one path from there to UBI which is hilarious to me and seems pretty plausible in hindsight (requiring only the submission of creative documentation to the government, something companies do literally all the time right now). RoboMac (“over 1 million per second served!”) is required by government to find work for N employees or face a fine(I’m assuming the government will fine companies who don’t hire people under this scheme, if not replace with whatever stick you’re using to prevent business saying “thank you but don’t need any”). RoboMac says “fine no problem” and gives the required N employees a special “work from home” systems monitor job the just opened up. This requires them to log in to their remote session and monitor *something something mumble* (say… a static webpage with a green box saying “All Systems OK” and a 1 minute refresh, I whipped up a quick prototype at https://fiddle.jshell.net/86t1pLb1/4/show/ ). Technically they’re probably meant to “maintain coverage” but the WFM system has been on the fritz a bit so the reality is that you just need to have that web page open for 8 hrs a day (or however long is mandated by the people’s ministry) and your adherence stats will be 100%. I think Moloch would be pleased with this outcome.
>Even if AI can’t go super-intelligent, what we’ve got RIGHT NOW basically invalidates the majority of jobs that don’t involve face to face human interaction once we get around to working on it (and make it more cost effective).
I don’t think that’s really true. I think people read about self-driving cars, factory robots and google’s virtual assistant then imagine they are sophisticated enough to take over all the jobs. Those aren’t completely solved problems, and they might not be completely solved for awhile. I’m sure they’ll get better but I think they’ll still require some level of oversight for awhile.
And even if they were at that level, I don’t think that encompasses a majority of jobs.
> I’m sure they’ll get better but I think they’ll still require some level of oversight for awhile.
Even with that granted, you’re basically gutting employment. Outside of things like self-driving cars, oversight isn’t going to be one-to-one for long. Replacing a team of 10 people and a team leader with automation and maybe 3 people overseeing is making 8 people unemployed.
My thought here is based on where i work which is mostly call center stuff but has a fairly strong software development and data analysis area. I believe the data analysis area would mostly survive (although the WFM part would be gutted) but everywhere else would shrink.
It’s plausible but it’s not going to happen overnight either. If a fully autonomous vehicle was developed today, it would take years before all trucks were autonomous, and we’re not even considering lots of ancillary aspects to trucking such as securing loads, determining what to load first and last and how to tie it all down securely, verifying that what they are picking up is on the manifest, dealing with government at weighing stations, providing security for the load, etc. If the vehicle breaks down, they set up road flares and notify authorities. Now all of that could potentially be automated as well, but it’s a lot more than just having a truck that can drive in the snow and rain and these steps won’t happen overnight either.
Despite all the technological progress over the last thirty years, the employment to population ratio for those 25-54 years old during April 2018 was 79.2% – the exact same as it was during April 1988. So long as this ratio doesn’t fall into the low 70%, I don’t think we have any evidence that there is an automation crisis for the labor market. This will probably take a few decades and occur over a few cycles. This cycle’s high is 80% and the low is 76%, the next cycle’s high is 78% and the low is 74%, the next high is 75% and the next low is 68%, the next cycle high is 68% and the next low is 59%, etc.
Putting in a Job Guarantee program with a reasonably high wage (say $13.50/hr) in the near future will give us the ability to adapt, and when the employment to population ratio (ex-Job Guarantee jobs) falls to 60% or 50% we can then discuss how to structure a basic income that will be appropriate for an increasingly automated world.
It’s so good to come here and get the “poor people are just lazy and worthless and deserve poverty” attitude expressed several hundred different ways.
Try a bit harder, Freddie
There are indeed hundreds of replies and a huge variation of sentiments, but I think the “opposed” voices can be characterized more accurately as reflectingbthe following facts about human nature:
1). Recognizing most people most of the time (not all people all the time) avoid unneecsessary work when it doesn’t benefit them or their loved ones. Economists sometimes even (unfairly) lapse into refering to this as “rationality”
2). A significant percentage of people will exploit, cheat or free ride if able to do so (studies have shown this percentage is actually around about 20% — links available)
3). An even larger percentage of the population (studies reveal about 60%) are conditional cooperators. They will play fairly as long as the system allows them to and does not penalize them or reward cheaters. The other 20% tend to strongly resist cheating and free riding damn the consequences.
4). A system which rewards not serving others within a market productivity framework will discourage market productivity. It will encourage free riding on the market productivity of others, reduce the payoffs to effort, creativity, investment, and so forth.
5) People can accomplish more together in vast cooperative networks than they can alone. Markets allow immense efficient positive sum cooperative networks to operate.
6). Paying people to opt out of these networks and complicating it with a huge tax on those who don’t opt out will undermine the market networks which fund our social safety nets, and any UBI.
7). The system could even self amplify into collapse as the free riders ride for free and the conditional cooperators incrementally peeel off and follow their example.
This is a bit more sophisticated than “poor people are lazy and worthless”. Really.
That’s just how it goes with any discussion of welfare. You get some people who want to discuss serious policy/implementation details and another group that would rather debate the question “do economically unproductive people deserve suffering/humiliation/death?”
Except online it’s even more vicious than usual because a lot of people who would be too embarrassed to answer “yes” in real life are willing to say it here.
It’s not a question of what they “deserve”. It’s a question of whether others are obligated to give up the fruits of their labour to prevent it. Until that question is settled, the “serious policy/implementation details” are just a courtier’s reply to draw attention away from that obligation.
Ever heard the phrase “idle hands are the devil’s workshop”?
What happens if all those people who don’t feel like working and now have money and free time decide to find meaning in organizing a revolution? There’s no guarentee that what people with free time decide to find meaning in is going to be good for society.
If you’re right, the safest thing would be to manufacture scarcity in order to keep large segments of the population from EVER getting up to the devils work.
“From the moment when the machine first made its appearance it was clear to all thinking people that the need for human drudgery, and therefore to a great extent for human inequality, had disappeared. If the machine were used deliberately for that end, hunger, overwork, dirt, illiteracy, and disease could be eliminated within a few generations. And in fact, without being used for any such purpose, but by a sort of automatic process — by producing wealth which it was sometimes impossible not to distribute — the machine did raise the living standards of the average human being very greatly over a period of about fifty years at the end of the nineteenth and the beginning of the twentieth centuries…
[but] if leisure and security were enjoyed by all alike, the great mass of human beings who are normally stupefied by poverty would become literate and would learn to think for themselves; and when once they had done this, they would sooner or later realize that the privileged minority had no function, and they would sweep it away”
-George Orwell, 1984
Seriously though, if you don’t trust the work product of huge groups of creative people with tons of time on their hands, I would not recommend living in a capitalist democracy.
The thing is that they aren’t being productive if they are living on the UBI.
I’m not advocating guarenteed jobs either. The benefit of the market is that it forces people to do something productive, something that other people actually want them to do, in order to get paid.
With the UBI, there is no such need – they are free to spend their time doing something that may not only be unproductive, but might even be actively destructive.
In general I think guarenteed jobs would be even worse, but I’m skeptical of the UBI as well.
Also, many people would argue explicitly that markets in fact DO “manufacture scarcity” in the sense that people are continually made to work producing ever more stuff and gadgets to keep the wheels spinning. We’re creating “scarcity” in the sense that we’re creating new products which are initially scarce, and people are constantly forced to advance to producing more of these new products and the next new better product. Of course, we also get higher living standards out of that process, so IMO, it’s a good thing.
The point is they are always responding to a real market demand. With the UBI, you would get a disconnect between what is actually being demanded by human beings, and whatever people felt like doing with their free time and money. It would short circuit the normal feedback mechanisms that connect supply to demand.
This is interesting. Though being a traditionalist Catholic, I end up agreeing with 90%+ of what you write here, though I’m in the opposite camp on this one.
At our level of economic development, a basic income (BI) really isn’t feasible due to trade offs.
An affordable basic income is too trivial to meaningfully achieve the BI’s stated goals (elimination of poverty, freedom from the need to work, able to offset the expected blow to the labor market from automation, reducing inequality in any meaningful way, etc), and it comes with significant non-monetary costs (potentially paying people to do nothing but have large families, discourages work, etc). Politically speaking, a small affordable BI would have to be in addition-to, rather instead-of, most transfer payments (and that makes it more expensive!).
A basic income which actually provides meaningful protection against poverty and actually large enough to replace all other programs is simply too expensive, considering again that we have to take the deadweight loss of high tax rates into consideration and more severe non-monetary costs. If the Swiss BI had been around when I started to work, I’m not sure that I would have bothered getting a job. The Swiss BI is $19,800/yr per adult all tax free in US PPP terms per wikipedia, and my job was $40,000/yr and around $30,000/yr after tax, with about $5,000/yr in costs due to the job itself. I could have gotten a roommate, a nice apartment at $1,000/mo ($500/mo each) and just hung out. I lived on a lot less while in college. If I wanted to have to get married and have two kids, the Swiss BI would be worth $49,500/yr, all tax-free, with no need to save for retirement as this payment would continue forever. The Swiss BI would have a gross cost of ~$5.1 trillion if provided only to citizens, which would require $700 billion in higher taxes even if you replaced all transfer payments and federal tax expenditures, and $1.7 trillion if we wanted to eliminate our current deficit.
Then there are other thorny questions – what happens for legal immigrants? There will be huge political pressure to exclude non-citizens (in which case they remain at risk of poverty and have to pay the huge increases in taxes required by BI), and if they aren’t excluded there will be a huge incentive for people to come to America (even illegally in hopes of amnesty) driving up the total program cost.
I think the Job Guarantee (JG) program makes more sense. It is targeted (so that people who use the program can receive a lot more), provides people with actual work, and far more cheaper (probably close to zero net cost as it would eliminate the need for many welfare programs). I didn’t have a chance to read through your entire post yet, but some of the earlier comments didn’t strike me as too worrisome.
What about the disabled? Well, keep the disability insurance program. I’m curious about your comments, which seem to imply A) it’s extremely difficult for clearly disabled people to receive benefits from and yet B) the system does a terrible job preventing fraudulent applications. Given the high and growing levels of people on disability (plus your insinuation that there are plenty of fakers on the program), I get the sense that getting disability involves an annoying process but it’s not an insurmountable problem. And I think there are ways to limit this problem.
First, keep the benefit level way under that provided by the full time JG (say, a wage of $13.50/hr for adults aged 20+). Second, have disability payments start right away with proof of disability coming afterwards, and require the claimant to pay back whatever has been received if it was found to be fraudulent. This way they at least don’t have to wait for the benefits.
What about daycare? Daycare provision could be one of the JG jobs (which would incidentally push the price down to nearly nothing as most of the cost is labor and it is being provided gratis by the federal government JG program).
What about bad workers? There could still be penalties. First (severe) offense, you get fired for a day then can rejoin. Second offense, you get fired for a week and then can rejoin. Third offense, you get fired and half to come back to languish in a rubber room at half pay for a month before being eligible for being rehired. Fourth offense, same. Fifth offense, your only option is the rubber room, which is like welfare but unpleasant because you have to sit in a boring building all day if you want your $6.75/hr. This reallocates all the miscreants and simply awful employees to being contained in a separate building away from everyone else, but imposes a huge financial penalty on the merely lazy as a motivating factor.
There’s a paradox built into disability gatekeeping that is very difficult to work around: healthy people are better at doing things than disabled people are. Applying for disability is a thing. Therefore, healthy people are better at applying for disability than disabled people.
By that reason, healthy people are also better at legitimately being disabled than disabled people.
It may be that the extra ease from not being disabled is more than balanced out by the fact that they are more likely to need to come up with fake evidence than disabled people.
Okay. Let me take this from another direction.
Imagine that a new nation rises in the Pacific Ocean out of the waters, devoid of industry but quite wealthy. It is the 1950s all over again – our production targets far outstrip our consumption.
Does anybody think this would be a bad thing? Keep in mind, all they bring to the table is their money. They consume everything we can produce and sell to them, but we aren’t going to get anything back out of them; they will just keep buying what we are selling them.
If this is bad for us, consider carefully how you feel about trade agreements and Chinese subsidies of goods. If this is good for us –
Well, what exactly is the difference between that nation, and UBI? What exactly makes the employment situation (for white men, anyways) of the 1950s so terrible?
Now, mind, I don’t support a huge UBI. I think it should be minimal; maybe 10-18 dollars per day, enough for somebody to afford a bed in a group house and cheap meals and limited cheap entertainment and not much else. I don’t care about eliminating poverty – I am an old school socialist, socialism is for the workers, not for creating a class of lower-middle class aristocrats. And if it goes towards children, it should be targeted just below what a child costs – children should still cost money to have, we do not want to reward profligate reproduction or we’ll get it.
The goal of a UBI should be threefold: Creating a safety net that isn’t draconian to navigate, simplifying the administration of our social safety net, and continuing to encourage people towards productivity. If your goal is fixing capitalism, your goal is too lofty. If your goal is to eliminate bad jobs, your goal is misguided – you can’t catch bad employers with a net that also catches unpleasant but necessary work without some horrendous side effects.
I don’t share Scott’s apparent goal of bottoming our society out at lower middle class; that is a hedonism treadmill which will crush our society. There should be tradeoffs. Tradeoffs are key.
But I also don’t share the apparent goal of many commenters of making poverty unpleasant to punish people for being poor on the theory that this will motivate them to not be poor anymore.
Most people don’t do the bare minimum necessary to survive. This isn’t going to change when the bare minimum is slightly easier. People like luxury. The trick is not to make poverty unpleasant, it is just to avoid making not-work better than work. This is something the current system fails horribly at.
If this nation produces things, they will sell things to us in exchange for what we produce. If they already have things but do not produce things anymore, they will sell things they already have to us. If they produce nothing and have nothing but money, then their money is worth nothing for us and they are not in fact wealthy and will not be able to buy anything from us with their worthless money.
The 1950s are widely regarded as some kind of golden age for labor (or at least the class of people regarded as labor at the time) and industry, in spite of that we were selling these goods to Europe, largely in exchange for debts that wouldn’t be repaid until later (in an era that definitely wasn’t a golden age). All this while purchasing power was rising.
There may actually be some kind of value in producing things and dumping them into a pit, assuming we can all agree they should be dumped into a pit, if for no other reason than it bootstraps our desire to produce. The nice thing about consumers, as opposed to pits, is that we bootstrap the ability to produce things people actually want.
(Yes, yes, broken window fallacy. But there seems to be some kind of gridlock going on with production, and a future full of industrialized nations each of whom can produce more than they can consume doesn’t look like an ideal end state.)
$10 per day is roughly what an adult man of average weight who meets some basic health requirements can make by donating blood plasma twice a week in the city where I live, so we kind of already have that.
The major difference, I suppose, is that to get that money you have to live near a donation center, whereas a UBI could theoretically be collected even by people living out in the middle of nowhere where the cost of living is much lower. But is it really a good idea to incentivize people to move away from places where there are a lot of job opportunities? Would the money be better spent on efforts to reduce the cost of living in our most productive cities?
The obvious way of doing that doesn’t require money, it requires a political willingness to sharply reduce restrictions on building housing.
This post is way too big to discuss as one unit. There is stuff there for five separate posts. So I’ll just pick a few things.
I think Scott vastly underestimates the positive side effects of even a shitty burger flipper job. I’m certain that a lot of McDonald’s employees would NOT quit when UBI was introduced.
For one thing, a job gives you a social context. You get to interact with other people on the regular. It’s not always positive interactions, but it’s real, and it’s something people need. Scott talks about how without a job you can spend more time with “family and friends”, but where are those friendships going to come from when you have zero reason to ever meet other people. And how will you form a family without having friends?
Sure, some people are very social and will organize all sorts of activities. That will be great for the popular and attractive crowd, but I’m certain a lot of people will be completely left out, and just sit at home, slowly going crazy, forgotten by everyone except their UBI check issuer and Netflix.
Also, congrats to Scott for coming out as “quasi libertarian”. It feels great to say it out loud the first time!
I suspect what would happen looks lot like University socs.
It’s a social change that would take years or decades, but it would slowly become the done thing to take part in several organised hobbies/sports/charities/political orgs, like students do now.
The extroverted and organised people would take executive roles, running the socs.
The main difference/variation I see is that student socs exist as part of a larger Student’s Union, which sets rules, such as democratic and accounting standards, and provide support (financial, legal etc.) for these societies.
That’s already a thing. I live in suburban Chicago, and there are no shortage of organized hobbies or organizations for me to attend–lack of time is the problem, not lack of opportunity.
I’ve met a ton of friends locally through bowling leagues and a curling club. In New York, I joined a wargaming club and knew lots of people through that. I know lots of people through the Chicago Debate League (high school policy debate), where I volunteer as a coach and judge. If I was religious, there are 20-30 synagogues within a half hour driving distance, and far more churches. If I was more athletic, our town park district organizes softball and basketball leagues. If I had the time to get back into tabletop gaming, there are 4-5 stores within a half hour driving distance.
Note: None of the things I do socially draw a “popular and attractive” crowd.
Rather than pile on any further on how much of a non starter the Basic UBI is, here is a brief summary and link on a guaranteed income program which could work and which costs nothing (additional). Everything below is cut and paste from Warstler’s summary. He also had a web site dedicated to the idea.
GUARANTEED INCOME & CHOOSE YOUR BOSS
Uber for Welfare
https://medium.com/@morganwarstler/guaranteed-income-choose-your-boss-1d068ac5a205
Details out how to design a decentralized guaranteed jobs program.
Q
Using Paypal and an OPEN SOURCE MASHUP of Monster.com and eBay, the US govt. should block grant / waiver states (likely Texas first) to establish a Guaranteed Income, wage subsidy welfare system.
As the GI, I suggest $280 for a full time week. Anyone who wants to work registers, receives a Paypal Debit Card, and each Friday at 5PM has their GI deposited.
All GI recipients are free to market themselves for whatever they prefer to do for work, but they must choose from hundreds of jobs being offered to them each week. If you don’t choose a job and work, you don’t get your GI.
After their first year, recipients get one week vacation with GI annually.
Job offers begin at $40 per week. Offers increase by $20 per week. Jobs do not have to be 40 hours a week, but they must pay at least $40. [paid on top of government guarantee at a sliding scale]
First fact: At $40 per week, there’s no able bodied / able minded person that some employer won’t find use for. The 74 yr old woman in a wheelchair who wants to work to keep busy? Plenty of tele-service operators have work for her to do from home for $1 per hour. [recipient makes $300 week]
Here are the basic rules:
1. Recipients can choose to take lower paying jobs.
2. Recipients cannot be made to work outside a radius of .5 miles. This is a guesstimate.
3. Employers must also establish their real identity and deposit money into system before they offer jobs. No more Craigslist roofing scams not paying after the worker is covered in tar.
4. Employers and their hires cannot be related or cohabiting. Closed loop hiring circles will be machine excluded… you cannot hire someone who hired someone who hired someone who hired you.
5. Employers must accurately describe the job (check boxes) and cannot add to it after it is accepted or require work not checked.
6. Feedback will be given both ways. If you are familiar with eBay buyer / seller feedback, you understand what this accomplishes. It makes the whole thing work. If you are not familiar with this stuff, get familiar with it before you state your opinion on this plan.
7. There are no taxes paid by employer or employee. There are basic workplace protection requirements. Umbrella insurance is sold on the job offer site for folks bringing labor into their home.
8. Upon meeting some fair criteria, the criminally lazy (see below) can be suspended from GI program. Perhaps 6 weeks as first suspension.
9. Only individuals and incorporated SMBs earning less than $3M per year can hire through GI platform. This is not subsidized labor for Fortune 1000. Under this plan, their labor costs go up. I am proposing Internet based #Distributism.
It costs us nothing. NO NEW SPENDING.
If 30M to register, our cost is $375B, assuming 30M take jobs at $1 [over state guarantee]. Of course, the market will bear more. At $3 per hour the govt. is spending $312B per year. At $5 per hour, the govt. is spending $250B per year.
There is no more unemployment insurance. There is no more minimum wage. That’s why there are 30M in program.
That would be an interesting experiment to run. It would be useful to know if there are Americans secretly pining to be more like India, with four lower tier workers doing a task, rather than one middle tier worker and a machine. Are there organizations that want cleaner streets, and would fill out the paperwork to get someone to sweep them? Are there people willing to hire mothers to do things that won’t force them to pay more than the job is worth putting their infants in day care? Are their neighbor mothers willing to switch weeks watching their combined children for a small sum?
I haven’t heard if there are any good estimates on that, and anyway revealed preferences are a better gauge than questionaries.
Excluding relatives from carer roles would be counterproductive in the ways some of the current welfare incentives are, and some new ones as well. The current system already actively discourages poor mothers from marrying, why would we want to additionally discourage them from caring for their own parents/infants/disabled, paying instead to hire a stranger?
I believe it is just a process to avoid gaming the system. It would be too easy for families to hire each other at government expense.
Obviously a system like this would need to start small and grow/adapt with learning, or be cancelled if it doesn’t work.
It seems to me that Uber and AirB&B both demonstrated that there were a lot of people who wanted to do stuff to raise a little extra money, but there was enough friction in the negotiations and in getting around the local guilds/regulations that they couldn’t manage it. If you could somehow do some Uber-like app for hiring people to do minor stuff (clean an entire street and set of sidewalks) with very low friction, I can imagine that making the world a much better place.
You’re describing Taskrabbit, among other services.
Also Nextdoor.com . Generally a good place to find local handymen, babysitters and so forth.
A bit of an aside, but Cal Newport is good on why everyone hates the new open office plan.
Got a link?
http://calnewport.com/blog/2016/10/19/the-opposite-of-the-open-office/
Thanks, I’ll check that out.
My problem with basic jobs is that it really is one step on the road to socialism. In fact, that risk alone is sufficient for me to be strongly opposed to the whole project. However, I don’t think it’s fair to point to the period of the Russian Oligarchs and say, “that’s because they were winding down their basic jobs program.” After nearly a century where the rule of law was replaced by discretion, favoritism, and corruption it was inevitable that the whole economy would suffer as the institutions of civil society were slowly rebuilt. The problem with Russia wasn’t the collective farms, it was the fact that after communism even a nominally independent police force expected to be bribed. I don’t think this view of 1990’s Russia and the rule of the oligarchs is in dispute. The reason Putin is so popular over there is that he stuck it to the oligarchs – the people who, once unleashed by the collapse of the Soviet Union, promptly exploited the norm of discretion over rule of law – and returned a sense of the rule of law. To the extent basic jobs leads to socialism, we can expect the same problems with loss of civil institutions and the rule of law; not because of basic jobs per se, but because of socialism.
Meanwhile, in regards to winding down UBI, I’m skeptical of a plan that says, “the people will realize this was a bad idea and will voluntarily vote to reduce payments to themselves by 5% per year.” We can’t get them to vote to stop paying rich oil companies because it might hurt someone somewhere who needs a job on a rig to feed his family. We’re not going to vote to stop paying everyone everywhere, no matter how bad an idea it turns out to be.
I love the utopian ideal you end the piece with, but that’s exactly what makes me wary of UBI – more so after reading this than before. Every time we’ve approached some utopian idea in the past societies have routinely ruined it. It’s the old Tragedy of the Commons, except the commons in this case is the future. If we start a policy that says, “we’ll skim some off the top of capitalism for the people” I can see lots of people getting on board and everyone being happy in the beginning. But then you look at a system like Social Security, where politicians realized they could vote extra benefits during election years, because everyone likes when politicians vote to give you money, and the original plan is ruined. (cf. Republican Tax Plan recently passed for another example of politicians voting to give money for votes with no regard for a larger financial/economic plan)
So what would actually happen with UBI? We’d start off sensible, as Scott suggests, and then gradually move to a system where we just confiscate everything to give fat paychecks to everyone. Until those paychecks get smaller and smaller because we’ve killed the goose, so to speak. And then you can’t stop accelerating the system until it collapses. Unless, of course, we think that somehow this time it will be different and we’ll all eschew political self-interest when it comes time to make the decision. Otherwise, this is just a different road to socialism, and a different utopian story that got us there.
Addressing the first point made in this blog post, I’d like to point out that the increase in the number of disabled Americans was concurrent with an increase in the American obesity rate.
https://steemit.com/health/@calaber24p/should-governments-be-able-to-institute-a-fat-tax
(If you don’t like that source, there are plenty others that tell the same story)
Being overweight raises the odds of also being disabled for many obvious reasons.
Apologies in advance, I haven’t read all the posts above yet. so I might be repeating something. A lot comes to mind here, but I’ll just address the following for now:
“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.”
Um….I (respectfully) suggest you might be married to your own paradigm on what represents “meaningful” here.
Extreme example to make the point:
Take a person with Down’s syndrome and give them a job (like washing dishes) which they can perform, and see how they respond to it. They’re far happier doing that as opposed to sitting at home being fed and “entertained”. However unmeaningful you might believe that work to be, it might be very meaningful to them. I’m sure there are a lot of people in the service industry (“would you like fries with that?” et al) who DO INDEED make a positive difference in people’s lives. Even a smile can do that for a frustrated, stressed out person….a smile that makes one feel they aren’t alone. A kind gesture, some simple random act of kindness of any sort can actually restore ones’ faith in humanity. So I happen to think the “fries with that?” work is meaningful. It might (depending on circumstances and how it is done, of course) be even more meaningful than far higher paid and higher skilled (on paper) labor.
At any rate, Orwell spent some time as a vagrant and wrote about his observations in the work line. He spoke of idolness and what happens to “common folk” when a job isn’t available. Now granted, in this case they are “stuck to the bench” waiting.
But it does make a point.
From “The Spike”
“Most of the tramps spent ten consecutive hours in this dreary room. It is hard to imagine how they put up with 11. I have come to think that boredom is the worst of all a tramp’s evils, worse than hunger and discomfort, worse even than the constant feeling of being socially disgraced. It is a silly piece of cruelty to confine an ignorant man all
day with nothing to do; it is like chaining a dog in a barrel, only an educated man, who has consolations within himself, can endure confinement. Tramps, unlettered types as nearly all of them are, face their poverty with blank, resourceless minds. Fixed for ten hours on a comfortless bench, they know no way of occupying themselves, and if they think at all it is to whimper about hard luck and pine for work. They have not the stuff in them to endure the horrors of idleness. And so, since so much of their lives is spent in doing nothing, they suffer agonies from boredom.
Agree. I most approve the “I grudgingly forgive capitalism the misery it causes […]” passage. Paraphrasing https://richardlangworth.com/worst-form-of-government, I’ll put forward “capitalism is the worst form of Economic system except for all those other forms that have been tried from time to time.”
I actually posted “capitalism is the worst form of economy, except for all the others” in a blog post last year, thinking I was the first person who’d come up with it. A quick Google search reveals that people have been using that particular variation of that particular idiom since at least 2009, and probably for a lot longer, possibly since just shortly after Churchill popularized the original version. At any rate, I strongly agree with the sentiment.
I wouldn’t just shrug and say “oh, people will move out to far away places.” Others will likely bring up the fact that people don’t want to do that, so I won’t focus on that; instead, I’ll point out that cities are better for the environment, among other things.
Relying on bikes, walking, mass transit, etc. for transportation produces less pollution and uses less fuel than driving everywhere. It’s probably also healthier.
Shipping things via truck along highways to many different distant suburbs and rural areas is much less efficient than shipping them in giant tanker trucks to single cities.
Cities can be made much more affordable to live in by actually building housing, and the suburbs would be much more expensive if we didn’t have so many subsidies for roads and houses (I doubt those are that much more unlikely policies to implement than UBI/UBJ).
Denser housing allows for more space to be natural area.
Do we have so many subsidies for roads and houses? I thought gas taxes more than paid the cost of roads. The only subsidy for houses I can think of is the deductibility of mortgage interest, which I believe was somewhat reduced in the latest revision of the tax code.
I agree that the problem of expensive housing in cities is in large part a result of restrictions on building. In the Bay Area, where I live, that also results in a lot of commuting on very slow roads. Put up a few Hong Kong style giant apartment buildings in or next to SF and traffic on 101 and 280 would get a little better.
Not to mention the residents saving something like four hours a day commute time.
I believe roads are still on net subsidized. I don’t think gas taxes even pay for the roads themselves (though apparently trucks are really the big offenders here), let alone the pollution externalities. The mortgage interest deduction is probably the big one for houses, which goes to my point of being able to reduce these subsidies, but it is still there. The existence of subsidized roads is effectively a subsidy for less-dense housing, as well.
I believe zoning laws can also be used to encourage living in spread-out houses, for example by prohibiting housing high-density enough to be more profitable than building a house. I guess that’s technically not a “subsidy” but it still increases low-density housing and decreases high-density housing.
The Bay Area is an utter shitshow when it comes to housing policy.
I haven’t found clear figures on that. On the one hand we have:
and on the other hand
and
And there is the further argument that wear on roads is mostly from trucks not cars.
Also, mass transit is very heavily subsidized, which tilts the suburb/city balance against the suburbs. I’m not sure how big an effect that is, given that not all that much urban transport is via mass transit.
My intuition is that many fewer roads would have been built in the first place if they had all been expected to pay for themselves via some sort of toll (which, I believe, creates somewhat different incentives than a gas tax. Tolls encourage the creation of a few roads that everyone uses, while gas taxes behave pretty similarly for lightly used side roads and main roads, I think? I’m less sure of this point). Either way, if you’re going to cover the costs of roads with gas taxes, they have to cover initial construction as well.
It is true that mass transit is subsidized, but I remember trying to do some napkin math on this and concluding that user fees + subsidies for mass transit was less than an equivalent fee for cars, probably mostly because cars are really expensive.
(Speaking of cars, I just remembered another effective subsidy for sprawl: parking minimums/requirements and subsidized parking in cities.)
TL;DR:
I don’t know who Scott is arguing with that they are taking his examples – which so obviously contradict his own point – and instead of identifying these clear problems with the logic, accept his conclusions but dismiss them as anomalies. Seriously, let’s talk about how summer break, aristocracy, college, the “gap year”, and so many of these other examples demonstrate the serious concerns we should have about implementing a UBI!
=====================
I feel like Scott’s passion for this subject is clouding some of his rationality. If you’ve made a litany of arguments for something, and the only good response you get is for people who oppose your side is to ignore all your points, either you’re just super correct all the time or you’re not engaging with the best arguments. Let’s take a few of these in turn:
First, there are the appeals to authority (although Musk and Zuckerberg are probably more “celebrity” on this topic than authority).
Next there are the examples of UBI benefits that are the opposite. Like the aristocracy. Aristocrats are probably not a good group to go to for support of your hypothesis. Yes, if you take a survey of thousands of aristocrats over a couple centuries you’ll find some who were driven achieve great things. Meanwhile, any Tolstoy or Dostoevesky novel has dozens of examples of the worst possible result you would expect from a UBI. I don’t have any data on productivity levels among the landed aristocracy, but I suspect only a tiny minority was engaged in anything that was a net positive for society as a whole. There’s a difference between saying certain, particularly driven people will flourish due to UBI, and saying that it is an on-net positive policy. In this case, anecdotes plucked from a centuries-long experiment are probably leading Scott astray. Also, how high a UBI are you hoping to see, that you’ll get anything like the purported benefit for the small number of active aristocrats? If we assume the economically productive aristocrats as an upper bound of productivity from a UBI (in other words, maybe you don’t get a Von Braun at $40,000/yr, but you do at $75,000 or above) we can expect the policy will only generate productive members of society at a rate lower than the abysmal showing of agrarian monarchical systems until technology somehow propels us to a post-scarcity society. Sounds like UBI would hinder this effort, not help, based on the aristocracy angle.
Or let’s take the case of college students and the UBI. How does this support Scott’s case? If anything, they’re the exact opposite case. You either have extreme partying – especially the first year, where some studies suggest students are not on-net learning anything at all – and all the worst-case scenarios imagined by UBI opponents! It’s only later, when students are either put on academic probation, or they otherwise realize their current status will eventually end and need to be repaid, that we see any kind of useful productivity from the mass of college students. Sure, there are the Zuckerburgs of the world, but is the argument for UBI, “We want a policy that might cripple large swaths of the poor so we can enable the talented few”? Except Scott seems to be arguing the opposite – that UBI might harm some unfortunate few, but will be on balance positive. The college student argument demonstrates the exact opposite.
The self-employed argument makes no sense, since many self-employed people put in more working hours than a supposedly unemployed UBI recipient.
Talk to a schoolteacher about the effect summer vacation has on their students and they’ll give similar answers. It takes a few weeks at least before students recover sufficiently from vacation to become productive again. This is one of the appeals of some schools shortening or eliminating summer vacation. By invoking summer vacation, Scott is essentially admiting that the majority of people who accept UBI as a substitute for work will lose a significant degree of functional capacity for any kind of productive work. If you want them to pull it together and go volunteer at a church, or in some third-world country providing clean water to the world’s poor, you’ll have to work against the natural atrophy that long, pressure-free periods of indolence (such as summer break for students) engenders. We should use this analogy to argue against UBI, not in its favor.
Then there’s Scott’s own experience. He basically described the potential benefits of getting unemployment checks for a year, not UBI. He agreed that any situation that implied an eventual end date does not qualify as a test of a UBI. A “gap year” is by definition bounded by the eventual expectation of work. UBI is fundamentally different from this expectation, and must be treated as such.
Perhaps this time-bounded restriction should apply to high school students as well. Maybe we shouldn’t consider them as a case-study for the effects of UBI. And although I’m tempted to agree in part, I also think the points Scott made that made the most sense as to what impact a UBI would have on the majority of individuals hinge on the idea of accountability. Once people become aware of some future accountability (such as the case with college students) they change their behavior and become more productive. Student accountability is, “you have to be at the bus stop on time” is likely qualitatively different than “if you don’t stop partying and start studying you’ll end up with a bunch of debt and a no degree to help you pay it off.”
Finally, there’s an implicit assumption throughout all these arguments that UBI will decrease overall employment – especially of those who hate their jobs. So what if they drop out of the labor force, at least they won’t be forced to do menial labor. This is probably wrong from all we know about American culture. In Europe they’re always talking about how crazy Americans are for constantly working with few vacation days and late retirement. Are we really going to assume that Americans, who have consistently shown they prefer to trade away leisure time for additional income, will suddenly reverse this trend after a UBI is introduced? Why would we assume this will change? If we don’t assume UBI has a disincentive effect toward work, then its only benefit is in the distorting effects it will have on monetary redistribution – which we can only theorize about, and hope they turn out well. But in the end it’s just a way to redistribute capital, not solve other problems like dead-end jobs, and all the arguments about how it’ll change the game for the poor are a pipe dream.
It seems the best argument in favor of this fundamental employment paradigm shift is, “People don’t like to have to work. Give them the ability to reduce how much they work, and they’ll reject the offer in favor of the rat race. Give them the ability to not work at all, and they’ll take the tradeoff.”
And I guess that’s probably true, at least on the margin. If it’s a question of whether I can afford to drive around a decent car that won’t break down all the time, versus having to settle for some beater, I’ll probably take the overtime and maybe deliver some pizzas on the side. But if I can get away with not having to go to work at all maybe that’s a large enough life decision that I can consider the tradeoff in a different category than working more versus less. But then isn’t UBI just paying off a certain number of low-wage earners to never work again? Sure, some small percent will take time off to learn to code or whatever, but the net expected effect would be that most of the low-wage earners who quit their jobs would simply withdraw from the labor market indefinitely.
This is kind of like saying to this group, “You’ll never advance to get a job we think would be important or fulfilling, or at least acceptably not horrible. Take the UBI and get out of the job market altogether.” Probably the majority of people who would exit the labor pool altogether from a UBI fit this description. Maybe a debatably-sized minority would have worked their way up from there, but are now disincentivized to try and any potential for a career is extinguished. It’s hard to see how you can justifiably claim unemployed people living off the UBI would not then become stigmatized by society, when the basic message is, “your contributions are worthless to society, take some money and go away.” I also don’t see how this could even have a net neutral effect on feelings of self-worth. But I guess that’s an empirical question.
Scott keeps saying, “This will create some great new opportunities for people who would otherwise have been wage-slaves to open up and create something grand!” Maybe that’s true, if the UBI gets big enough. But we should also consider that there will be some potentially-great business people who will be incentivized by UBI not to spend the years it will take to climb the ladder of success, get noticed, and change the world from there. They will instead be disincentivized from the labor pool into indolence. Between these two groups, is this a net loss or gain for society? I think it’s more likely we’ll get the loss first when UBI is low, but only get the gains when UBI is high (while still reeping the losses). I’m skeptical of any political philosophy that only incurs losses until it’s “implemented fully”. (Which is to say, almost all of them.) The tendency is to ignore huge problems while waiting for expected gains that never come, but will, “once we expand the policy a bit more.”
No thanks.
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 you missed, with a job guarantee is that the feds would end up hiring a lot of managers and create a huge bureaucracy to run this thing. That would be costly.
Now if you did something like biblical gleaning 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.
!PEDANCY ALERT!
> There will be an alternative: a basic income guarantee. We will have rejected it.
“Will have rejected” is future perfect, “will be” is future, so you’re mixing tenses. “Will have been” is what you’re looking for.
It’s a common mistake that has an inordinate effect on the quality of a sentence. It’s perfectly reasonable not to care about a little detail like this, but I feel like the kind of people who are concerned about the correct usage of “who” and “whom” are also the kind to worry about this.
The existence of the alternative is an ongoing thing. The rejection is a discrete event at some point in time.
There’s not much point in the pluperfect or the future perfect if you don’t use it alongside the perfect or future tense in order to communicate a sequence of events in the past or future.
Thus there will be a point in time in the future in which it would be true to say: ‘There is an alternative. We have rejected it.’
But it’s not a sentence. It’s two sentences—one with one tense, one with another.
Yes, it is true that there will have been an alternative. It’s also true that there (still) will be an alternative (the in-principle possibility of a basic income guarantee won’t have gone anywhere). And, finally, it is true that we will have rejected it.
Therefore, the quoted two sentences do not constitute a grammatical error.
“GRAAAAGH” guy proves too much. Yes, ruins the workplace by leaving the stove on and shouting at people. But under the current system, he ruins public spaces like train stations and libraries by screaming and spitting at people. And under basic income, he instead ruins your apartment building by being a horrible tenant who destroys the unit and a horrible neighbor who shits on the elevator, leaves cans of beer in the hallway, and gropes your daughter when he passes her by in the parking lot.
The problem is not the economic system. The problem is that “GRAAAAGH” guy is a walking negative externality who makes life miserable for everyone around him. About all you can if you don’t want him harming decent people’s lives is warehouse him in a prison/asylum or let the state execute him the next time he commits a crime (surely it won’t take long).
He’s saying “GRAAAGH!” – no one said anything about spitting etc., which is a different issue. There are many people who appear as “walking negative externalities,” but absent actual further harms, the fact that they say “GRAAGH!” and make someone uncomfortable does not justify locking them away. People need to be educated about people who are different due to mental health or other issues and don’t make them feel comfortable all the time, and be expected to deal with that like they do with other unpleasant things in life. People aren’t guaranteed a “GRAAGH!”-free life. It would cost much less money to be able to just say “Hi, have a nice day,” and move on, than to institutionalize him. Someone with such an issue could in fact be a super good worker in some areas, but his outbursts would keep him from stable employment, and that is sad. When I worked for the Air Force, what impressed me most was that people who would be excluded from the private sector for things that made others uncomfortable but that did not actually affect their usefulness and could not be helped, were included. One man had tourette’s or something similar – at times he had verbal and physical tics. Everyone just moved on. He was given public speaking assignments like everyone else, and everyone ignored any outbursts. It is possible to have an environment that respects such differences, even if the corporate office can’t handle it. Another man had a stutter. In the AF environment, he was given the opportunity to possibly overcome it, but even if he didn’t, he was still able to be a useful employee. I think all of society needs to think more along those lines. We fall way too easily for people who play the social game well and have no oddities, but turn out to be actually destructive or dangerous, but have no patience going the other way.
The reason I have always been basic-income-skeptical is because of myself. If I had a basic income the same as my grad stipend, I could *definitely very-much* see myself mostly just playing a lot of video games. There’s a *possibility* I’d finally finish my novel. But it would be mostly video games.
And I’d be happy–but the thing is I *can* do other things that fill a slot society needs. (And I am a privileged educated person from a privileged educated background who doesn’t really *need* this assistance.) So shouldn’t I?
Also the idle rich in the past have produced scientists and artists… but there’s a reason we don’t mean “idle rich” as a compliment. Or “trust fund kid.” The stereotype at least is that all that free money is not good for their character.
When I was little, my dad read me Bertie and Jeeves books. One time I must have said something that made my dad ask me, “What do you think Bertie’s job is?”
I thought very hard and said, “He goes to the club.”
“Do you think that’s a job?”
Eventually Dad explained to me that Bertie doesn’t have a job, he’s a “gentleman”, which was a bizarre concept to me. Also he explained why it’s funny that Bertie and his friends hang out at “the Drones Club.”
A lot of people have commented above on the incentive problems etc. with both UBI and UBJ, so I’ll not go into that. But I’ve noticed a bit of a thread of “why are opponents of UBI so determined that no-one ever gets a free ride?” Since this generalises to other welfare/disability/secondary distribution programs, I think my viewpoint here may be relevant. Warning: raw and emotional, rather than cool and rational. But maybe it’ll help people understand why I, at least, am so implacably opposed to redistribution. (Also it drifts a bit off-topic by the end.)
Stipulated: I’m a nerd, bookish, aspergiac. (Also, technically not fully-abled: I have a sleep disorder that prevents me working full-time.)
Between the ages of (let’s say) 8 and 18, I was bullied a lot; this was made bearable by the knowledge that in adulthood, I’d be an affluent knowledge-worker and the people bullying me were idiots who would be stuck in retail or manual labour, and that it would utterly serve the b—ers right.
And now you expect me to give up some large slice of the product of my work (when you add up income tax, national insurance*, VAT** on the goods I buy, push effects from taxes supposedly levied upon ‘business’, etc., the total tax bite is probably over 50%) to give those same b—ers welfare cheques, and then to give them more when it turns out they spent the first lot on pot and xboxes, because somehow it’s not acceptable for people who make stupid decisions to starve.
So no. If you want _my_ money to fund _your_ life, you had d-mn well better prove that you’re trying to better yourself and not just suffering the consequences of your own stupidity. Ideally, let me make that decision myself through private charity, rather than forcibly taking the decision away from me and giving it to some unaccountable bureaucrat. (If nothing else, I could hardly be _more_ Kafkaesque than the disability-scheme bureaucrats.)
And meanwhile, abolish the minimum wage (and all of the regulatory crap that makes employees cost about double what they’re paid), at which point technological unemployment ceases to be a thing (exact analogy to comparative advantage, see http://jttlov.no-ip.org/writings/no-robots.html ), the disabled-but-not-totally can get part-time low-value jobs that give them both the dignity of work and some extra income, and I can cut my working week down from 30 hours to (let’s say) 20 and no longer have to spend entire weekends asleep to recover (why can’t I do that now, you ask? Because per-employee overhead stays flat, so the fewer hours you work the bigger it gets in relation to your output. Even to cut down to 30 hours I had to show medical evidence that that was the absolute maximum I could sustainably do, and this is at a tech company that cares about its employees).
Actually we can stretch freedom of contract even further and help the deserving-poor even more than just abolishing minimum wage laws: if we also allow people to put up their human capital as collateral, then the people who ‘just need enough runway to [re]train and then they’ll be productive’ will be able to attract investment in their persons, thus providing that runway. Some people see the word ‘indentured’ and decide that this would be horrific, but (a) what do you think an apprenticeship is and (b) it’s only slavery if it’s involuntary. If you want to sell yourself into indentured servitude, the law should not stop you; it should just make d-mn sure*** your employer honours the contract (but it has no business writing _extra_ stipulations into that contract beyond what the parties agreed on).
And if some people with no skills and poor impulse control starve to death, watch me not care. Just because we’re the same species doesn’t mean I have to value your life, and if I’ve neither contracted with you nor committed a tort against you, you have no ethical claim upon me.
* UK equivalent of Social Security, but not hypothecated. Basically just a way of raising income taxes without “raising income taxes”. Also increases collection costs.
** Like a sales tax, but more complicated (thus increasing collection costs).
*** On the same principle as the common-law version of ‘public accommodations’: the law should not be interpreted to further privilege power relationships that are already asymmetrical. Where they conflict, we should be more scrupulous about the rights of weak parties than of strong ones. (Idea and phrasing both borrowed from http://esr.ibiblio.org/?p=1332 )
Or, outvote you and have men with guns come and take your money and either lock you in a cage or kill you if you put up too much of a fuss.
The men with guns are A: sworn to obey whoever the voters elect and B: culturally more akin to the people you are ranting against here than to any “nerdish, bookish, aspergiac”. Your plan leads to you and anyone standing next to you being very dead, until you actually code up and 3-D print your army of killbots. Which I expect to take a while, and so I’m not going to be standing next to you any time soon.
There are things that can actually be done, maybe. People have been talking about some of them here. Your plan isn’t on the list, and I’d rather you leave it out of the discussion.
> The men with guns
Oh, I’m sorry, I thought we were talking ethics and/or morality, not practical politics. There’s a difference between “I hate redistribution and consider it evil” and “I realistically believe it can be stopped by any means short of civilisational collapse”. You’ll note that I still pay my taxes and consequently am not in prison. I just don’t have any illusions about having agreed to a social contract that somehow makes those taxes just.
On a tangent, I dispute the claim that the ‘men with guns’ are culturally akin to bullies with poor impulse control. At least _some_ of them are genuine sheepdogs with high ideals (this is why American-style 2A-as-defence-against-tyranny works: the army may be stronger, but if you actually try to turn them on the citizenry many of them will refuse); and while power-tripping pigs might be a real problem in the US, British policemen just aren’t like that.
Also, _technically_ in most cases the men with guns aren’t “sworn to obey who[m]ever the voters elect”. Here in the UK they’re sworn to obey the monarch; my understanding of the US case is that they’re sworn to the Constitution.
> Your plan isn’t on the list, and I’d rather you leave it out of the discussion.
Also, quit leaning on the Overton Window.
We were talking, from the title of the original post on down, about the merits and weaknesses of two different programs a government might implement to address what most people perceive as an urgent problem. That’s politics. So, you were mistaken. And you should have known better.
The “ethics and/or morality demands that we let lazy unemployed people starve to death, because they bullied us in high school” discussion is elsewhere. Very much elsewhere, as in not in this blog that I’ve noticed.
Also, a fair fraction of the people who bullied you are now in management, where they hold economic power over people like you. The social aspects of bullying can actually be pretty good preparation for that career path. Usually they mix it up so you don’t have to be managed by the actual same people who bullied you in high school. But they don’t set things up so that you get to be the one who decides whether they starve.
> We were talking, from the title of the original post on down
I made clear in my thread starter that I was _not_ responding directly to the OP, but rather to those asking “why do some people feel an emotional need to prevent layabouts getting benefits?”.
I’m not saying that ethics and/or morality demands that anyone let lazy people starve to death. I’m saying that it doesn’t demand anyone _lift a finger to prevent it_, and that I thus oppose, and believe myself justified in opposing, policies and programs which _do_ make such a demand (and, moreover, back it by force).
I get to choose my employer, because I live in a market economy. No manager has economic power over me, because we _contracted as equals_ and I had the option of saying no. (Moreover, since my conditions of employment are not directly affected by minimum-wage laws and the like, I am not in a state of effective villeinage). Consequently, management treats me about as well as the economic value of my work will support. The bullies who retain power over me are the ones who either went into politics or work for the government; those, I don’t get to say no to.
In short, *consent* is very important to me, both in se and because of the different natures of relationships that are built upon it and those that aren’t. And if we were talking about certain biological activities, that sentence wouldn’t be even slightly controversial…
(For the benefit of future readers: it’s also mostly gone now. That was quick.)
Scott:
One of my favorite of your articles. I’d rename this article the “song of freedom” or some crap like that just because I loved it so much. And all in all, I agree, Job Guarantees are scary, socialist, and demeaning, while a UBI has the potential to be an actually realizable Utopian program that doesn’t actually break everything somehow.
Here are a few added reasons I’d argue basic income might be really positive:
1) It makes capitalism more “fair.” It resets the playing field a tiny bit every year/ month, sort of like how the Year of Jubilee was maybe supposed to work. So if a basic income is the right $$ amount, it theoretically should make capitalism more competitive and less monopolistic, which should make capitalism an even MORE self-adjusting system than it already is, making it even SAFER from the inevitable communist revolution ;).
2) Similar to some of your bureaucratic points, it eliminates certain transaction costs associated with receiving some level of aid. This makes it so poor people are more likely to actually receive aid. Seemingly small transaction costs can be prohibitively high when you are in a desperate poverty situation.
3) In terms of international politics, it might actually be one of the most viable alternatives to trade wars, mercantilism, and eventually WW3. Typical international economic strategy, from a nationalist standpoint, is about making your country more efficient at producing things (like airplanes and nukes) than other nations, thus making your country more dominant in a conflict scenario. A Basic Income I see as potential way to achieve a “cultural victory” (yep, that was a Civ reference) as an alternative to the military victory. A capitalist nation with a basic income that actually provided for basic needs would be an irresistible symbol of “the better life” and would be an enormously valuable propaganda tool. “Join our religion of happy capitalism” could be an actually successful siren song we could sing to the nations, as opposed to now where our songs of neo-liberal capitalism + democracy are being ignored more and more.
And here are some reasons why I think Basic Income might run into problems:
1) society might actually just run on the misery of poor people. Some of the most crucial jobs are dirty hard jobs done by desperate people. It would be very sad if this were the case, but perhaps a better national economic strategy for world domination would actually be the opposite of a basic income, a “truly flat tax” where people have to pay like $5000 a year to the government or they get sent to a horrible, horrible “Guaranteed Job” as punishment. But I certainly hope that’s not the case/ destined to be the winning system.
2) poor people- if they got into debt enough- could be back where they started to some extent. In some ways this is an argument FOR a basic income being viable, because you just say- “hey, the lazy people will all get into debt, and then they’ll be back where they started and forced to work like good little servants again, so don’t you worry!” But idealistically this is a concern.
3) Basic Income does take from “producers” and give to “non-producers”, so I disagree that it would not create some cultural divide, at least initially. There already IS a huge cultural divide, between those who think having a miserable job is a badge of honor and productivity, and those who think having a miserable just just sucks (the second group are typically called “entitled millennials”). Many of this younger generation would move more firmly into the camp of “we’re not going to do work we hate just because we are shamed into doing it” camp, and many of the people doing the work they hate because they are shamed into doing it would feel more resentful. For these reasons, I unfortunately see a Basic Income in 2020 as a very small possibility, unless it started relatively small. Those who truly love freedom are fewer than those who truly love to hate young people who aren’t obsessed with careers and economic status. The only thing worse than a loser is a person who doesn’t play the game.
I have big doubts that UBI would lead most people to invest in themselves. It would mostly lead to more consumption. My assumptions are that most people are not like the average reader of Slate Star Codex, that usually cares about moving up in life, do something ambitious and risky, or is simply much smarter than the average person. This is the kind of people for whom a UBI is useful, and where society could get a return on money spent. And still, the case where Scott’s patient couldn’t get a break (physically, emotionally, financially) to go study for night school is just too rare.
With UBI most people would just sit back and relax. There is nothing morally wrong with that per se*. The problem is that we are still far away from a hyper productive economy that needs almost no labour input. An UBI would artificially increase production costs and this would lead to a crash in production. A company like Wal-Mart would be wiped out since their profit margin is about 2-3% of revenues (same destiny for many industries).
If people that get out of the job market because of UBI don’t get replaced by (equally cheap) robots, then production falls, which means less to redistribute around. Money is an illusion and what matters is the actual number or cars, iphones, groceries, houses, clothes, doctor appointments, theatre plays and so on produced every year. Money is just tokens to claim those products.**
You could argue that in Kuwait they have a mix of UBI and Basic Jobs for Kuwaiti nationals. Let’s look into that. Essentially, the country is oil rich and any Kuwaiti citizen can get a basic job working for any public sector department or company. 44% of employment is in the public sector.
They do pretty much nothing all day and leave the job at 4pm — earning about USD3500 monthly, tax free. That’s why I say its partially UBI in the sense that you have plenty of spare time and no stress because of work. On the other hand, it is not UBI because the salaries are way above subsistence level. So much that all the crap jobs in the country are made by poor foreignness like Pakistani men (construction) or Philippines (hotels/services) — these would be the cheap efficient robots in the UBI utopia.
But you can’t find Kuwaitis in good jobs either. I used to travel to Kuwait a lot in my previous job to meet with banks. From all the bankers I meet c.90% where foreigners (Egyptian, Lebanese, Malaysian, English, American, Pakistani, Turkish, Indian). The only Kuwaiti people around would be the odd CEO or Chairman of the bank for obvious reasons. The senior bankers also complained that they struggled attract Kuwaitis to work at private banks. This is probably a good thing, that most people don’t want to waste their life’s overworking themselves no matter how much money they could make. But it shows that a UBI would not make most people shoot for the stars.
So what does the vast majority of the Kuwaitis do? Well, they do conspicuous consumption. Buying sports cars, vacations abroad, big houses, luxury brands at the shopping mall. Someone in the comments mentioned the problem of borrowing against your UBI. That is exactly what happens in Kuwait. People borrow the maximum they can out of their salaries — their own zero sum signalling trap in a way. So much that there are strict controls on how much you can borrow as a percentage of your salary, and car registries are sent to banks so that they can see that the money is really being spent on a car and not on something else (plus many other related issues, which give rise to ever more complicated and paternalistic central bank rules for retail lending).
To sum up, in a world with a very high UBI, most people would behave like aristocrats (consuming, not investing, and be constantly concerned about their standing in society). Just like Kuwaitis but with the cheap foreign labour replaced by robots. Such world is still far way.
*The moral problem comes to taxing people, that obviously don’t want to work for the benefit of others i.e. we don’t care what you do with your time, just let me keep what I earned or do with it what I please e.g. leave it to children.
**(related: when the UK government introduced a housing help-to-by scheme, it only increased house prices further. Akin to passing a check directly to house sellers. A UBI would similarly lead to inflation, but across all goods and services. The size of the problem would depend on the amount of people that leave the job market and produce nothing (remember, consumption != production), and the fall in production/investment due higher taxes) https://england.shelter.org.uk/professional_resources/policy_and_research/policy_library/policy_library_folder/research_how_much_help_is_help_to_buy )
It does suck being poor. However, lack of money is not why poverty sucks. Poverty sucks because of crappy housing, crime, no healthcare, and limited access to education. If you want to fix poverty you have to change society in ways to ensure people have these things. UBI will not provide any of them any more then putting lots of money will fix DC schools. This does not mean that getting more money into the hands of poor people is a bad thing, just that its not sufficient. UBI was explicitly invented as a way to eliminate every other social program. Why are UBI proponents against a job guarantee (JG)? Because they are against EVERY social program. I don’t know if we can pull of a JG. It may require more local democracy then we are capable of in this age, but at least in is was not created to explicitly destroy every other means of using governement to help the poor. If people have needs they can’t afford, we can create and fund local cooperatives to do the work. Maybe we could even try out a little democracy. This liberitarian utopianism is the opposite of democracy. It destroys the power of people to democraticly shape society and leaves wealth as the only power left. Have you ever played Monopoly? You get your $200 every time you pass “GO” but one player still ends up owning everything.
Proponents say evidence from trials suggest that it will help with quite a lot of social problems.
It might not fix all of these things, but it can certainly help.
Crappy housing: Cities are overpriced because all the jobs are there. Once moving to the countryside is more viable, housing in cities will become cheaper.
Lots of criminals will just be sitting on their backsides gaming.
Ok, America’s just an unfathomable dumpster fire on the Healthcare front. That’ll need fixing some other way.
More time for people to do college courses/ train / teach themselves stuff. More people creating free teaching resources.
@Scott Was 10k be a number you were considering? I don’t remember if I saw that in the article or just referenced in the comments.
If so, that would seem quite a radical figure to me considering minimum wage is 7.25 dollars an hour, -which in 365 days of 8 hours each gets you 7.25*8*365=$21170 before tax– i.e this would be at least half a years wages as a basic minimum.
Who works 365 days a year? I think the average hours worked for Americans working full-time is about 1800 hours per year, but maybe only 1600 hours per year for the lowest European country. At 7.25 per hour, that is 13,500 USD and for the lower European hours it is 11, 600 USD. OF course I’ve heard that most minimum wage workers also don’t work full-time, so it is really lower than both numbers.
It’s not an estimate, it’s just the minimum that ege a hardcore 100-hours-and-its-great guy has to admit is considered respectable by mainstream society.
As you say, with that figure it sounds like paying people near full rate not to work, almost enforcing a strike on all the minimum wage workers of the nation.
I’m sympathetic to the idea, I think the rat race often really suck at the low end (if you have any kind of health or motivational issue, which most people seem to), -even to the point of acceding to “lets try this old communism thing one more time, how
badmuch worse could it be?”. If we can avoid if falling into the claws of the usual recreational revolutionaries and snakish bureaucrats (highly debatable, but I want to believe), who knows how much less genocidal it could be?But even so, it just really isn’t what the word “basic” next to “income” conjures in my mind.
With that figure, the proposal seems simply be to do away with low paying jobs on the trust that if americans could survive in the days of the frontier, mournful hand wringing about delicate economies has to be bullshit on some level, a giant bluff, that only needs to be called and then boom it’s the exploiters who are scrambling to adapt to us or suchlike.
Which like I said I could totally believe if someone sounded like they’d really looked into it, colleges certainly seem to be in the grip of exactly such a situation, and I wonder if we are subsidising basic jobs in a similiar way. One person finding an advance can multiply the output of millions of people, I just don’t believe we need walmart greeters to stave off the encroaching boundary of societal scarcity, lest we all go under. But there’s no way 10k isn’t an absolutely drastic figure. It’s a proposal to undercut all the basic jobsthen, not a basic income.
While it is possibly true that most people would not do much if they didn’t have to, humans enjoy being creative and forming organizations. I think a lot of much-needed community building could be done by people freed from traditional constraints. A lot of it could be fairly productive, but hard to establish under the current system. I don’t think all of it is easy to envision, so I can’t point out specifically what I mean, but I do think we need to try new things.
But what is more important, IMO, is freeing up the few extra creative individuals who could make big advances. I think way too many people are being stifled under the current system – not enough time to think about and tinker on big questions. Look at many of the true visionaries and big inventors – they weren’t after money or necessarily working for a big company, but fooling around in their basement exasperating their families. We are terrible at taking advantage of natural curiosity and genius, even if our current system does better than most. We push most kid towards mediocrity and conformity young, because we equate that with diligence, but some people need more freedom.
I’m not one of these super awesome individuals, but I’ve gotten into historical research and made some cool discoveries. I’ve found out I’m good at it, but it’s just a hobby. If I had more freedom to do it, I think I’d create some valuable work. But right now switching to academia might mean getting a PHD (I already have two bachelors and a law degree – I’m done with school) and taking a 50% pay cut from my current BS admin job. I would definitely be more productive in a less admin-oriented job, but the market wants me there doing paperwork 9-5. And I’m too exhausted when I come home to think out a better plan. There is so much unexplored valuable research lying in archives unexplored until the next PhD student comes along — if even a few people dove in, really cool things could come of it. And I’m sure there are other hobbies like this.
I’m not surprised to see over 1000 comments on this post. Hopefully this doesn’t get lost in the mix, since this addresses something I’ve seen missing in the conversation…
I sympathize and agree with many of the points Scott makes. However, I feel there’s at least one activity that would not discriminate against those on disability, not distort the economy in ways that would make low-level employment worst, and improve the welfare of everyone involved.
Regular attendance and participation in government. Whether its voting, jury duty, attending town meetings, or even just a “Here’s a monthly hourly info session on how the government works”
Local Government Participation is Abysmal Three quarters of the US Population have never attended a local public meeting, and less than one fifth have petitioned their representative.
Less than half of people summoned show up for jury duty While the article was written in 2007, its still bad enough today that trials get delayed or mistrialed
Voting in elections continues to hover around 55% in major election years, and only slightly above a third in mid-term elections
Unlike a jobs guarantee or work requirement, participation in government doesn’t require 1000 hours of labor each year. Government buildings and services, like courthouses and voting areas, are already set up to be ADA compliant, and also accommodating for people with medical issues. Like infrastructure or social welfare spending, increased participation in government is something vital in this country that needs improvement.
I can understand that one counterpoint to this argument is that “Well, if people don’t have to waste time working in McJobs, then they will actually have time to vote, or go to jury duty, and not fear losing their livelihood for performing a civic duty” On the other hand, compulsory voting laws increase turnout, and their removal decreases turnout
I’m even willing to extend participation to something as simple as tutoring sessions on American politics and civic knowledge. When a third of your citizens can’t pass your own citizenship exam then something is terribly terribly wrong. Unlike voting, or jury duty, or attending a town hall to ask questions in person and get them on the record, this type of learning can happen remotely.
Maybe some of these things improve just through UBI alone. On the other hand, there’s a good chance that citizens will not use their newfound time to participate in government. I also understand that requiring voting, stricter attendance requirements for Jury Duty, etc. would probably need some additional measures (Voting Holidays, Stronger Protections for Jury Duty) to prevent those activities from contributing to people losing their livelihood. But as Scott mentioned before, UBI has the chance to just get sucked up and transferred to renters. Without nudging people to also be more civically minded and involved, UBI has the chance to become undermined by the current crop of local participants that push N.I.M.B.Y./DC Schooling/etc on their communities.
The present level of knowledge comes from a system where most of the population has had twelve years of government run tutoring in all sorts of things, probably including that.
On the whole, giving governments another opportunity to tell everyone what they want everyone to hear and believe doesn’t strike me as an improvement.
On the one hand, I sympathize with Bryan Caplan’s “Case Against Education” book and arguments against public schooling…
On the other, even if such tutoring produces no net improvement in the average knowledge of citizens, then I at least want citizens who are interested in receiving a public benefit to *signal* or at least *fake interest* that they want to be better citizens themselves. At the very least, I acknowledge that the barrier to overcome for these sessions would probably have to be greater than those associated with jury duty (less everyone tries to game the system by going back to school)
At the very least, the other goals I have mentioned (increase turnout at elections, jury duty, and town halls) have utility and are feasible.
haw haw
so you’ll take the aspects of work that make it suck (compulsory participation in something you’d prefer to not do) and extend those to government and that’ll make it BETTER?
plus which if you insist on people being “civic minded” they have a nasty tendency to not do the thing you want. What happens when all these inspired civic-minded voters decide that same-sex marriage isn’t allowed in their town?
Here is a Scandinavian perspective on this interesting debate:
Scandinavian countries have for some years had something functionally similar to a Universal Basic Job guarantee. We label it “activation policies”.
Since we have been doing this for some years (and increasingly the rest of Europe likewise), we have some empirical knowledge of the pros and cons. For those interested, here is a simplified walkthrough of the system (full disclosure: I spend my working life as a health & social policy researcher – and I believe that, on balance, this policy is better than the alternatives.) 1) You start out by introducing a means-tested social assistance scheme that covers everybody – including single males at subway stations shouting GRAAAGH to passers by. 2) You require that those who apply for social assistance, work for the benefit if they are able to work. 3) To find out if they are able to work, the social assistance administration does a work test.
Effects of the system: When the social assistance administration does the work test, it discovers that many long-term social assistance claimants are actually disabled (which was never found out before we introduced the activation requirement plus work test). Hence they qualify for a disability pension instead (somewhat similar to US Special Supplementary Income). In short: This version of a UBJ channels the unemployable GRAAGHs among us to a (more generous and not-means-tested) disability benefit. This takes care of Scott’s objection concerning what to do with those whose net “worth” to an employer is negative.
As an aside: organisations for people with disabilities, in particular the youth organisations, like the activation requirement. Their complaint is that the government does not always follow up its job guarantee in practice.
Why not a Universal Basic Income instead? Most of the weaknesses of a UBI have already been pointed out in the discussion (by rahien.din and David Friedman among others). Let me just re-state that many disabilities are really expensive. A UBI will not be sufficient to grant people with severe disabilities a good life. If voters want to provide them with above-minimum tax-financed income, the state simply cannot avoid to burden medical personnell and administrative staff with the difficult and contradictory helper/gatekeeper roles they perform in our present social security systems. It is messy, difficult, and yes there are Type I and II errors, but these problems are unavoidable if voters want to provide people with disabilities with more than what everyone else gets. (And hey this role conflict is difficult but it is not THAT difficult; after all we have been able to live with this role conflict for more than a hundred years.)
Hi Doktor
People with disabilities that need more money than standard social security need to be diagnosed anyway. UBI would still get rid of a lot of mess and means testing elsewhere.
If anything, I think you may be steelmanning basic jobs too much. Even your own arguments do not lead to the conclusion “It’s better than nothing. But not by much.”
At the very best, it guarantees a permanent, unacceptably high, ceiling on income inequality, but that comes at the cost of incredible amounts of political will to raise taxes being wasted on a program that will entrench the social and financial pressures to be employed, potentially compete with private industry in a way that wastes a ton of resources, proliferate more government-subsidized programs that intentionally staff a disproportionate amount of bad employees who don’t want to be there, massively increase the scope of bureaucracy, and fundamentally do nothing about the biggest factors disempowering the poor: Lack of time, energy, and exit rights from bad situations, because the threat of homelessness and inability to subsist hangs over their heads.
I don’t need to regurgitate your own arguments back to you. I agree with almost all of them. What I don’t understand is how the conclusion you draw is “better than nothing, but not by much”. The basic jobs proposal, even in an ideal, spherical-cows form that glosses over all of the pitfalls of implementation, is far worse than nothing. It comes at a massive cost and perpetuates or exacerbates more problems than it could possibly solve. What’s “better than nothing but not by much” is the most poorly-implemented forms of basic income.
Good piece, I’m surprised that anyone thinks basic jobs are a good idea.
Perhaps you’ve already heard this objection, but the empirical evidence in favor of UBI has a severe confound – all of the test cases (that I know of) involved injecting money into the system from an outside source. No matter how you distribute that money, it should have a positive effect. We have no idea if using UBI as a means of redistribution would have a net positive impact. It would be pretty compelling if someone did a UBI experiment that also involved imposing a tax high enough to pay for UBI for the community being studied.
You are mistaken to include Churchill among those with inherited wealth. His father was a younger son who inherited not much (thus his marriage to an American heiress), and lived beyond his means. Winston inherited next to nothing as well. However, he was sufficiently connected socially to float along on credit as needed. And also, he was a gifted writer who made a lot of money – he had many best-sellers, starting with his books about fighting in India and the Sudan, and earned fat salaries as a war correspondent. During his “wilderness years” (the 1930s), he was dependent on payments from his friends in the newspaper industry for articles (though he gave good value).
A better example would be Franklin Roosevelt (Teddy Roosevelt too).
Interesting how I haven’t seen much discussion of the WPA in all this, which was what the previous American attempt at Guaranteed Jobs looked like.
WPA jobs mostly kind of sucked, and this was on purpose, because you weren’t supposed to want to stay in them. WPA workers were paid less than market rate and were not permitted to unionize, among other big issues.
I dont see anyone writing on the potential of UBI+Part Time Job as being a major trend of the future. With the rise of Gig and Freelance work, many people that do have jobs and want to work in some capacity also have precarious income levels and, to be blunt, would be quite helped by a UBI system. Those that want to be “higher achievers” can find ways to signal/achieve status even with a UBI system, and those that want to subsist on the bare minimum can do so, as they currently do in many ways. If this were the era of nice middle class 50’s jobs, I wouldn’t even be writing this, but current (and esp. post recession) job trends point more towards varied/mixed employment, whether that’s multiple jobs (which is less than ideal) or ones less than 40 hours a week, or are less predictable in general regarding demands on a worker. A UBI fits well with the current trends, rather than a seeming utopian scheme to me, it is an adjustment to the future. Guaranteed jobs as an alternative to UBI just adds too many problems and not enough benefit.
I might have to change my mind about the negative income tax – I’ve been against it – because of this blog entry. I haven’t fully digested what Scott has written, nor have I read the comments yet. At this point, the questions that bother me are: (1) what is the economic impact of a guaranteed basic income – won’t it devalue the currency to the point where the amount of the basic income is the economic equivalent of zero dollars? and (2) how is this going to impact – and be impacted by – immigration, particularly illegals who will come here & try to game the system.
Just a couple of nitpicks; I didn’t feel that any of these detracted from the overall value of the article:
1. Under “11. Work Sucks,” “site” should be “sight.”
2. “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.” I agree that there for maybe 20-40% of people whether the program is helping or hurting them won’t be obvious. But for someone like Warren Buffett, this sentence really didn’t make sense. (I read it as it would be difficult for Warren Buffett to conclude whether the program was a net negative? And I feeelll like it obviously would be.)
I’m still waiting for someone to show me the math where basic income is high enough that nobody has to work but enough people are net payers into the system to pay for everyone who doesn’t. There’s nothing universal about a basic income that gives me 15k a year but requires a 50 percent marginal tax rate on the next 30k dollars I earn. At that point I’m breaking even to let a bunch of other people do nothing. No way in hell that would ever work. Ever.
Excellent point. Suppose we just eliminate the personal income tax? Or flat-tax it at X% to fund UBI?
Wonderful arguments. Love them all. Agree with them all (99.9% at least). Guaranteed jobs is most certainly not the solution, it would not improve society. A UBI is the best known untested solution we have.
On the argument of not needing money to be happy, because people living in an 1870 farmhouse were happy.
What creates suffering and depression, is not our absolute standard of living, but our relative standard of living — our inequality. And in addition, a lack of freedom to change it.
No one livings with an 1870 farmhouse lifestyle, where 50% of their kids die of childhood disease, where they must work 80 hours a week farming, and chopping wood, to bearly have enough heat and food to stay alive over the winter, is going to be happy, if they live that life, in a modern American suburb, where everyone around them has a 2018 lifestyle — and the 1870 family is powerless to join the 2018 lifestyle that surrounds them.
Inequality is the problem, not a lack of money.
A UBI is a direct and simple fix for the inequity. That’s why it’s the correct solution.
People fail to see this often because we focus too much on the free money side of capitalism. Does giving people money make their life better? Does it cost too much? This is the wrong focus.
A UBi does give everyone free money, but it should at the same time, tax everyone with income to pay for it.
The best way to create the welfare is to give everyone an unconditional check of the same size.
And the best way to fund the UBI is to tax everyone’s income, at the same rate. One fixed flat rate for all forms of income, including corporate earnings. The unconditional nature of the tax side is just as important as the unconditional nature of the handout side.
When you tax all income (the UBI is excluded from the tax — it would be pointless to tax the tax revenue) you lower the income inequality. This is a mathematical fact. When you take from the rich and give the poor, you lower the inequality. The inequality is the cause of the depression and anger and distrust, and when you lower the inequality, you make society better.
The best way to understand a UBI is not just as welfare for the poor, but also a tax penalty on the rich. It’s as important to lower the income of the rich, as it is to raise the income of the poor. That’s how we reduce inequality and make life better for anyone.
It’s not so important if everyone ends up with an 1870 lifestyle, or everyone ends up with gold toilets. What is critically important, is that we see each other as equals and that we see that we are all fighting the same battles.
This is why a UBI is a right solution because the problem isn’t poverty, it’s inequality. This is why the 1870 farmhouse argument doesn’t hold water. In 1870 everyone lived a poor life — they were equals all fighting the same battle to make a living and that equality is what made them feel strong, and secure, and happy. We don’t have that equality in the US today and that’s why everyone is so mentally messed up, and angry, and separated, and lonely, and depressed, and taking drugs to escape their reality.
Above I argue that UBI is the right solution because it reduces inequality.
In the original blog post, the issue of inflation of rental values created by the poor having more money to spend was brought up. This is a classic and well-known problem of welfare — well known as the Land Value Tax / Henry George crowd. But it doesn’t apply to a UBI.
The concern is that when the poor have more money, it will just drive the demand for low-cost rental units higher, and the landlords will just end up with more free money in their pockets. So housing prices rise to eat up all the UBI benefits, and the landowners are the ones that get the welfare — the people that most certainly didn’t need the welfare in the first place — making the effort of trying to help the poor pointless.
This is most certainly a real economic effect. But it doesn’t stop a UBI from doing what it is meant to do — which is reduce inequality. Housing for the poor will rise in price, but it most certainly won’t stop the UBI from doing its job.
As I wrote above, a UBI has two key components and we tend to over focus on the handout, and ignore the tax that funds it. We don’t just give the poor free money that the print out of thin air. That would create inflation, and the prices of goods the poor buy, like low rent housing, would inflate and much of that money would end up back in the pockets of the rich. The benefit for the poor would be highly watered down by the inflation if we tried to create it just by printing money.
But we can’t create it by printing money because it would create too much inflation and break the economy by destabilizing prices and destabilizing the currency used. We must do it by taxing some segment(s) of the economy. I argue the tax needs to be just as unconditional as the handout — that we must put a flat tax on all forms of income, including profits from housing rentals. Including all corporate earnings, so these housing rentals can’t escape taxes by hiding them in a corporation.
When we tax all income at a flat rate and fund the UBI which is a fixed sized handout for all, we mathematically are forced to reduce inequality, which is the entire point of what needs to be fixed — we take from the rich exactly as much as we give to the poor.
When we take from the rich, that too has an effect on land value and rentals. They go DOWN in value because the rich have less money to bid up the prices! The rich and poor housig markets are not independent. They overlap, they bid for the same land. When the rich of San Francisco have a lot less free money to bid up rental values, prices all across the bay will fall. If you own high rent property, your rental income will fall. The rich landlord, in that case, will become poorer. If you are the slumlord king of the area, your rental values can rise. But with that new income will come higher UBI taxes that must be paid, and more of the money goes right back tot he UBI fund and to the poor.
When we create an economy that drives inequality to insane levels, housing prices follow the inequality with the homes and land owned by the riching rising in value. When 20% of the population controls 80% of the income, the land use follows the same pattern — 80% of the best land is used to house 20% of the population and 80% of the population is forced to squeeze into 20% of the land.
When we use a UBI to reduce inequality of income, the land use becomes more equal. If 20% of the population controls 50% of the income, and 80% now controls the other 50%, the land use will re-balance in a similar way. Mor land will be converted to low-income housing, and less land will be allocated to high rent housing.
When you reduce inequality with a UBI, the economy won’t magically raise rents on the lower income housing and lower it on the high-income housing, without at the same time, rebalance the sq miles of land to each at the same time. If the high-income group loses much of their income to the UBI taxes, and the low-income groups have more cash to compete for the land use, the high income groups will be forced to sell some of their land and share with the low income groups — housing will become more equal — which is the correct and true goal of a UBI. It will do exactly what it is needed for it to do — make our society more equal, at every level, including housing standard of living and prices.
The Henry Geroge land rent fears just don’t apply to a UBI. When we create a system that taxes all income, making the rich poorer, and gives back to everyone, making the poor richer, the rich don’t magically rig the system to take the money back in a free market economy. They are slaves to the economy, and when the income becomes more balanced, housing prices do as well — and that’s the desired result — less social inequality. A UBI correctly funded by taxing all income, will most certainly fix the housing inequality problem.