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Finland will hand out cash to 2000 jobless people to test universal basic income

nytimes.com

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Re: Finland will hand out cash to 2000 jobless people to test universal basic income

#261

Post by lacampbell »

mrleinad wrote: post #172
lacampbell wrote: post #153

Earlier quoted context omitted.

I agree with you in principle. But I am extremely dubious of using the state to accomplish this. I would rather see a cultural shift where we all agree we don't need state coercion to get us to help one another. Anything the state does IMO will be inefficient and involve pay offs to a few select chosen corporations. Do we need force to do this? Do we need cronyism? Do we need corruption?

Corruption exists in corporations as well. Who do you think pays bribes to state officials? The state can be efficient too, regardless of it being a monopoly. It just needs the same thing an efficient company does: overseers and the right push to be efficient (a.k.a. an informed and well educated population that knows when they're being scammed and demands better services for their taxes)

The US Federal Government can't deliver a fully socialized healthcare system despite spending more money per head than many other developed nations that manage to provide full coverage. What makes you think they could possibly efficiently administer UBI?

What possible overseers can a government have? Authority begins and ends with them. It has token overseers sure, the same way a dictatorship to china might point to its token elections. But that is all.

Re: Finland will hand out cash to 2000 jobless people to test universal basic income

#262

Post by mgamma »

austinjp wrote: post #250

What's to stop UBI from "cancelling itself out" due to inflationary effects? Prior to UBI, the lowest possible income is zero. After UBI, the lowest income is X. The poorest people in the nation will have an income of X, so X becomes the new relative zero, the new baseline. Prices of everything (food, housing, whatever) will reset relative to X. So uni will become worthless shortly after it's introduced.... but only…

Consider supply and demand. Say there are 100 people and they all need 1 of resource Z and 100 of resource Z are available. People who have only the UBI can afford the lowest quality of Z but those who have UBI + income will all try to get a higher quality of Z. Net result is that earlier it wasn't possible for low income / no income people to get resource Z, now they can. The rich however will have to start paying a slight premium for finer things in life.

Re: Finland will hand out cash to 2000 jobless people to test universal basic income

#263

Post by alexbecker »

austinjp wrote: post #250

What's to stop UBI from "cancelling itself out" due to inflationary effects? Prior to UBI, the lowest possible income is zero. After UBI, the lowest income is X. The poorest people in the nation will have an income of X, so X becomes the new relative zero, the new baseline. Prices of everything (food, housing, whatever) will reset relative to X. So uni will become worthless shortly after it's introduced.... but only…

This only true if there is no competition and demand for the good is completely inelastic. What stops grocery stores from doubling the price of food? The other stores will make a killing by undercutting them. I think food is pretty safe here.

I am concerned about housing though. In some places, the supply is extremely inelastic, limiting competition, and the demand is also inelastic due to the difficulty of moving. Although UBI could make moving to a cheaper area easier.

Re: Finland will hand out cash to 2000 jobless people to test universal basic income

#264

Post by thwarted »

kLeeIsDead wrote: post #212
thwarted wrote: post #140

Earlier quoted context omitted.

While this is true, it is the closest thing that already exists to a basic income, so it should be the first place to go for material to study before/while setting up a more controlled experiment (assuming a highly controlled, completely reproducible experiment actually can be set up in social/economic sciences). Even in a UBI setup, it's the government's/public's money, not the recipient's, right up until the point…

You're making an awful lot of assumptions there.

You're making an awful lot of assumptions there.

It appears you're referring to when I said "(assuming a highly controlled, completely reproducible experiment actually can be set up in social/economic sciences)". I'm not making this assumption, I'm questioning if a meaningful experiment can actually be formulated and performed.

If a meaningful experiment can not be performed (and I'm not saying that it can), then examining and observing how people born into rich families operate would give better, or at least no worse, information than an uncontrolled, non-reproducible experiment would. And it might actually be cheaper to study those with money already rather than give people money just to be able to study them.

Re: Finland will hand out cash to 2000 jobless people to test universal basic income

#265

Post by bufordsharkley »

alexbecker wrote: post #263
austinjp wrote: post #250

What's to stop UBI from "cancelling itself out" due to inflationary effects? Prior to UBI, the lowest possible income is zero. After UBI, the lowest income is X. The poorest people in the nation will have an income of X, so X becomes the new relative zero, the new baseline. Prices of everything (food, housing, whatever) will reset relative to X. So uni will become worthless shortly after it's introduced.... but only…

This only true if there is no competition and demand for the good is completely inelastic. What stops grocery stores from doubling the price of food? The other stores will make a killing by undercutting them. I think food is pretty safe here. I am concerned about housing though. In some places, the supply is extremely inelastic, limiting competition, and the demand is also inelastic due to the difficulty of moving. A…

This is why a Land Value Tax is the clearly logical way to fund a UBI-- by collecting land rents in this fashion, you remove the ability for landlords to effectively confiscate the UBI.

Re: Finland will hand out cash to 2000 jobless people to test universal basic income

#266

Post by jganetsk »

stretchwithme wrote: post #247
jganetsk wrote: post #182

I agree with basic income, but most analyses of it are backwards. For most of history, governments addressed unemployment by starting wars. By shipping off to war, the unemployed temporarily get a job. They either come back dead or ready to take a new job in an economy revitalized by the stimulus of government war spending. John Maynard Keynes noticed this pattern, especially during the Great Depression and WW2, and…

Keynesianism is like making waves in a pond and pointing out how much higher the water has risen. It ignores where the resources come from and the jobs being performed in other parts of the global economy that must be cut, often in some other country, because the resources are being used for something else. If a country is going into debt to stimulate, its pulling resources from other countries where jobs have to dec…

It's totally misleading to think of the economy as a pond holding a fixed quantity of water. The water level does change, and sometimes you need to make waves to do it.

For this, you should read Paul Krugman's babysitting co-op analogy, a basic description of how an economic depression functions: https://en.wikipedia.org/wiki/Capitol_Hill_Babysitting_Co-op

Re: Finland will hand out cash to 2000 jobless people to test universal basic income

#267

Post by Zenst »

bufordsharkley wrote: post #265
alexbecker wrote: post #263

Earlier quoted context omitted.

This only true if there is no competition and demand for the good is completely inelastic. What stops grocery stores from doubling the price of food? The other stores will make a killing by undercutting them. I think food is pretty safe here. I am concerned about housing though. In some places, the supply is extremely inelastic, limiting competition, and the demand is also inelastic due to the difficulty of moving. A…

This is why a Land Value Tax is the clearly logical way to fund a UBI-- by collecting land rents in this fashion, you remove the ability for landlords to effectively confiscate the UBI.

Alas same effect, the TAX by owners will be passed onto renters with rents going up. Now if excess of housing that will eventually catch up and if a shortage then this will only exacerbate the divide.

So much that can go wrong and equally right, hence they are testing this. Though a small test will be isolated from all global country impact and bias towards a false positive due to small impact. If that is projected to the entire country then and only then will the impact be truly seen.

But be interesting how this works out, I'm sure the initial trial/test will work out but once you scale that across a country then you start to see the true impact and outcome.

One question to ask yourself, when mortgages and taxes increase the costs of owning a property - have rents ever gone down! I'll say no upon that.

Re: Finland will hand out cash to 2000 jobless people to test universal basic income

#268

Post by xvedejas »

Zenst wrote: post #267
bufordsharkley wrote: post #265

Earlier quoted context omitted.

This is why a Land Value Tax is the clearly logical way to fund a UBI-- by collecting land rents in this fashion, you remove the ability for landlords to effectively confiscate the UBI.

Alas same effect, the TAX by owners will be passed onto renters with rents going up. Now if excess of housing that will eventually catch up and if a shortage then this will only exacerbate the divide. So much that can go wrong and equally right, hence they are testing this. Though a small test will be isolated from all global country impact and bias towards a false positive due to small impact. If that is projected t…

That's not how Land Value Tax (LVT) works, at least under the economic theories I'm familiar with. And there's this quote[1]:

"Because the supply of land is essentially fixed, land rents depend on what tenants are prepared to pay, rather than on landlord expenses, preventing landlords from passing LVT to tenants."

Unlike property tax, LVT only taxes based on the land itself, and so doesn't disincentivize more productive (i.e. costlier) use of the land.

[1] https://en.wikipedia.org/wiki/Land_value_tax#Economic_effect...

Re: Finland will hand out cash to 2000 jobless people to test universal basic income

#269

Post by Retric »

austinjp wrote: post #250

What's to stop UBI from "cancelling itself out" due to inflationary effects? Prior to UBI, the lowest possible income is zero. After UBI, the lowest income is X. The poorest people in the nation will have an income of X, so X becomes the new relative zero, the new baseline. Prices of everything (food, housing, whatever) will reset relative to X. So uni will become worthless shortly after it's introduced.... but only…

Inflation is a result of increases or decreases in the money supply, wealth transfers like this have minimal impact.

Consider in these terms. % of economy going to the bottom may raise from say A% to B% but it's that does not push inflation. Because X% of the population has slightly less money to pay for the wealth transfer ~B-A.

Re: Finland will hand out cash to 2000 jobless people to test universal basic income

#270

Post by Retric »

austinjp wrote: post #254
kalleboo wrote: post #252

Earlier quoted context omitted.

Don't most countries already have welfare systems that keep the lowest possible income at X already? UBI is just supposed to simplify those systems by replacing them with a single non-means-tested system.

It's my suspicion that the means-testing, or other hurdles, prevent the benefit from being universal, thereby preventing the inflationary effect. Incidentally, I'm not declaring a belief in either means-tested benefits nor UBI, just exploring the territory.

Money is not being created from thin air so why would you think there was inflation?
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