If You Think Basic Income Is “Free Money” or Socialism, Think Again

> It’s really hard to look at the evidence and say giving people money is wrong, because having enough money means being able to buy enough food.

This person is conflating cash transfers (welfare) with UBI. One can think cash transfers and general welfare are good while still thinking UBI may have fatal flaws. And anyone that paints UBI experiments as approaching what truly Universal Basic Income would look like are deceiving. This person is repeatedly dodging real criticisms.

This article is mostly a verbose emotional string of arguments, but it doesn't do a very good job of explaining either of its two title claims.

Claim 1: Many people say "socialism" to mean top-down social programs funded by taxes, e.g. when people say uncontroversially "Sweden is more socialist than the USA," this is what they mean. UBI is a top-down social program. If you don't think that, ask yourself: What happens to the payments if the federal gov collapses or is incapacitated? (Is unable to organize payments or tax collection). UBI halts everywhere.

As a contrast, Farming is bottom up: For example the government of Afghanistan could collapse and it may take years before remote individual farmers even know that it happened. UBI receivers on the other hand would know as soon as the first check didn't come.

Claim 2: But UBI is "Free Money." That's the point. It has to be unconditional to be UBI, that's how they draw the distinction. Most people who advocate for UBI contrast it specifically with means-tested welfare.

> Have you ever played the game Monopoly? I’m sure you have. Is that a game about socialism? According to “free money is socialism” logic it is, because everyone starts the game with free money and everyone gets free money for simply passing Go.

This is a silly analogy. It's not free money even within the game rules. Passing Go is the condition. You can go to jail in the game, being forced to skip passing Go, even. Citing a game mechanic as a proof that UBI isn't free money is bonkers.

When UBI proponents say universal or unconditional, that's what they (proponents and opponents) are talking about when they mean free.

I made my own criticisms of UBI last week (OP's article is from Sept) where I raise objections that I think are relevant even if UBI is agreeably implemented: https://medium.com/@simon.sarris/after-universal-basic-incom...

Convincing people that it's not socalism or free money is not enough. You have to make the argument that price inflation won't occur, that it can fail gracefully, that destroying the other welfare programs that do more than just give cash (like case workers in medicaid) is a good idea, and so on. UBI proponents ignore these just like Marx ignored implementation details, relying on the World-spirit-of-the-people (an odd kind of hand-waving mysticism) to ensure that it would work.

If you meet someone pro-UBI, ask them this: What happens if it fails or we can no longer afford it, after 30 years running? What does the generation that was never required to work, do?

If they say it won't fail, you know you're not talking to someone interested in creating a robust system. If your ideal is incapable of planning for failure, you haven't really thought about your ideals much. We know what large scale top down social failure looks like, after the last century.

I can't manage to get past about paragraph two. What an idiotic piece of writing with zero basis in reality.

Money is not a means to "vote" on what we should produce. Money is a means to reduce friction in the trade process. It does other things as well, but its primary purpose is to make it easier to get the things we want by reducing how much time and effort goes into coming up with a thing to trade for the thing we want.

So, say you want a steak dinner and you are a programmer. You don't have to go to the restaurant and offer to program something for the owner in order to get your steak dinner. You program for your employer. They give you money. You take money to the restaurant. The restaurant doesn't have to have immediate need of programming to cut a deal with you.

There is an argument to be made wrt the idea that lots of people are adding value to the system that is hard to quantify, hard to translate into money, etc and those people shouldn't be left out in the cold, not just because it is cruel, but because it actively harms the system as a whole. I was a homemaker and the feminization of poverty is a genuine phenomenon. A big piece of that puzzle isn't sexism per se, but the simple fact that women are expected to invest time and energy in taking care of other people on an ongoing basis. The degree to which they do this for other people often doesn't really come back to them.

But, I am doubtful that basic income does anything to remedy that situation. In fact, I have fears that it would only serve to entrench the expectation that women should just accept basically being treated like slaves by the world around them. I don't think this is a good thing. It is one of the reasons I am not pro UBI.

I think there are much better ways to try to not leave people out in the cold entirely. They include universal basic healthcare and access to genuinely affordable housing. Addressing those two issues wouldn't fix everything for everyone, but neither will UBI.

I think this is an unusually good write up of some of what is broken with the idea of UBI:

https://medium.com/@simon.sarris/after-universal-basic-incom...

I think it depends on how you want to frame what I said. Helping the poor at least around you is good for you. Now, you could say equivalently not helping the poor around you is bad for you. Rephrase what I said if you feel uncomfortable with how I stated it.

If in a mafia controlled city you tell a friend not to publicly expose a mafioso for else he and is family is in danger, are you blackmailing your friend or are you simply stating facts?

>doesn't really make much sense. Of course investments are pre-sales tax. The sales tax applies after the investments are liquidated to cash and the cash is used to purchase stuff.

Say you have 100$ and you're rich. You invest that in the markets, compound for 40 years and end up with 4500$. You then get to pay sales tax on that after you've gotten your capital out multiple times over. If you're poor though you spend all the 100$ and pay tax right at the beginning, so you don't get to benefit from the compounding of your earnings because you have to use the money right away and thus have to pay the sales tax right away. Compounding is extremely important over even a single lifetime and rich people get to use it over generations.

>Let's say our hypothetical person is "rich", but it doesn't translate into extra consumption spending, then what's the point of being rich? It's not like he's getting anything out of it.

People put a very high value on aquiring wealth to pass on to their heirs. And even without that if what you buy is property there is no sales tax and you get to use that property throughout your life. If what you buy is investments you get to defer consumption till later and thus get much higher incomes through capital gains and thus pay all your sales taxes from investment gains of the pre-tax money you don't need to spend on day to day spending.

>You do have a point about estate taxes not affecting the majority of people, but estate taxes do affect estates with value greater than $5MM, and I'm working with the assumption that you and I are discussing "rich" people. The marginal estate tax in the U.S. ranges from 18% to 40%, which is higher than any sales tax.

The estimate from Wikipedia is that estate taxes apply to 0.2% of estates. That's what I mean by estate taxes being completely irrelevant for this discussion. The 0.2% of cases where your argument apply get to use all sorts of other tricks to avoid taxation, this is just about the difference between the people living paycheck to paycheck, the ones that get to put a little away and the affluent middle class. For all those 99,8% of the population estate taxes are irrelevant and sales taxes are extremely regressive.

If its being printed out of thin air (if hypothetically taxes can't cover costs) then its creating massive inflation.