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What Is the Point of Universal Basic Income?

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Re: What Is the Point of Universal Basic Income?

#111

Post by sykick »

marcosdumay wrote: post #66
meddlepal wrote: post #32

Earlier quoted context omitted.

All the current proposals for UBI seem to be talking about relatively modest anounts of income... between 10-15K a year... that's not going to go very far unless the cost of rent, essentials, and services drops dramatically. The reality is if we end up with a large amount of people that are not working then our economy is going to be totally hosed because it runs on consumption. If people don't have the money to cons…

When you automate production, prices go down. That's something that can be verified empirically, and hardly anybody will disagree. But when you automate the entire economy, prices should go down towards zero nearly everywhere¹ - that's because when capital freely creates capital, all restrictions on production and competition become meaningless. When you automate the entire economy, salaries also go down toward zero.…

Do you mean that production costs (prices) go down with automation or that the selling price to consumers goes down? If you meant the latter this is wrong. The selling price depends on the pricing power that the producer has. Consider for example monopolistic pricing power, cartel pricing power, and regulatory capture.

Re: What Is the Point of Universal Basic Income?

#112

Post by nightski »

developerdylan wrote: post #56
nightski wrote: post #36

Earlier quoted context omitted.

Because of how they utilize that money. The poor will spend it, because they need to. The rich invest their money since they do not need it all. Those investments are continuing to grow. Even if you transfer some of that money to the poor, they are spending it where? At Amazon etc...

Money being spent causes the economy to grow. How is that a bad thing? The investments of rich people often never see the consumer economy. It doesn't matter how they utilize it, UBI is still reducing inequality. You are allowing families to purchase things they wouldn't have had the money for otherwise. Quality of life purchases that the well-off take for granted.

We need to rethink reward structures in this country. The fact that an investor can put up some capital and then gain "dividends" for as long as a company exists is ludicrous to me. They aren't actively doing anything to earn those dividends. It's simply a scheme to reward those with capital and assets.

Meanwhile, the employees who work hard to contribute to GDP and grow the company see a fixed salary. They do not see those dividends for the rest of their lives, instead when they leave a company it's over. Why? Why don't employees build up dividend streams from the companies they helped build? Why do Amazon employees get paid minimum wage and are denied bathroom breaks when Bezos' net worth can swing $9B in a single day? Why aren't all employees, from Janitor to CEO receiving dividends from the success of the company?

It all seems ridiculous to me. We need to encourage people to work hard and innovate, not sit on piles of capital and assets.

I'm someone who invests heavily and takes advantage of the system. But I see the flaws and it really bothers me.

Re: What Is the Point of Universal Basic Income?

#113

Post by mdorazio »

iso947 wrote: post #45
mdorazio wrote: post #27

Earlier quoted context omitted.

To your last statement, most proponents of UBI emphasize the "Basic" part of it. As in, it's meant to provide a subsistence level of income that a person could survive on, but not in comfort. I'm personally in favor of that level explicitly not being location-specific so that if you want to live solely on UBI, you have to live in a low cost of living area to do so.

So those in cheap areas with no jobs can never move to the areas with jobs?

I'm not sure how you got that from what I said. There's nothing preventing people from moving out of those areas and getting jobs elsewhere. In fact, there would be a pretty strong incentive to hire those people because they would likely be willing to work for less than incumbent locals, which is pretty much the system we already have in place for many kinds of labor (not to mention outsourcing to cheap labor areas in the US that happens today). Additionally, freeing people in cheap areas from having to work shit jobs just to survive has the large upside of freeing those people to work on things they either care about or that have better economic potential than barely making rent.

My point is: UBI should only enable people to subsist on government income if they are willing to live in cheap areas with not-so-comfortable living conditions. Some people will jump at this chance, and that's fine. Many other people will decide they want to live in more desirable locations or increase their standard of living and will need to supplement UBI with other income accordingly. If we try to make UBI location-specific it opens up all kinds of arbitrage opportunities and weird incentives that I don't think most people want.

Re: What Is the Point of Universal Basic Income?

#114

Post by basch »

RivieraKid wrote: post #12

The prevailing view seems to be: robots will take our jobs, therefore we will need UBI, which allows people to live without work. The way I see it, the main problem that UBI is solving is inequality, it's a rich to poor transfer. Excessive inequality is bad because the aggregate utility goes down (rich people don't gain much from an additional dollar, so it's more effectively used by a poor person). Transfering cash…

>Transfering cash directly is the most efficient way of decreasing inequality

Is there any evidence for this? Is there evidence the money won't go right back into the lottery, consumption of unhealthy food, other vices, or right back into increased rent? What percentage of people will turn around and commit to an unnecessary more expensive car payment?

If you hand people cash, but don't correct a lack of financial knowledge, health knowledge, and overcoming marketing, why do you think it will be spent wisely? Aren't lottery windfalls exact evidence of the opposite?

At at an extreme minimum UBI should come with a budgeting framework. At a more extreme level it may be better as food stamps, health care, and retirement funding. Remember, the Freedom Dividend is instead of other, more directly allocated forms of social support. For those on SNAP and other cash equivalent programs, it's less than $1000 in net benefit, which makes it more net increase in welfare for the middle class than the poorest. A person who currently gets $600 in welfare will be able to upgrade to $1000, gaining $400, but somebody who currently qualifies for nothing gets $1000 more. So sure, the poorest are getting slightly more, but is it really actually tackling inequality, for the poorest to have the smallest net gain in the program?

Re: What Is the Point of Universal Basic Income?

#116

Post by sokoloff »

nightski wrote: post #112
developerdylan wrote: post #56

Earlier quoted context omitted.

Money being spent causes the economy to grow. How is that a bad thing? The investments of rich people often never see the consumer economy. It doesn't matter how they utilize it, UBI is still reducing inequality. You are allowing families to purchase things they wouldn't have had the money for otherwise. Quality of life purchases that the well-off take for granted.

We need to rethink reward structures in this country. The fact that an investor can put up some capital and then gain "dividends" for as long as a company exists is ludicrous to me. They aren't actively doing anything to earn those dividends. It's simply a scheme to reward those with capital and assets. Meanwhile, the employees who work hard to contribute to GDP and grow the company see a fixed salary. They do not se…

> The fact that an investor can put up some capital and then gain "dividends" for as long as a company exists is ludicrous to me.

This (and other forms of return) is the motivation for the investor to put up the initial capital.

Do you have an alternative proposal to handle the common case where someone who wants to work hard and innovate needs capital to do so?

Re: What Is the Point of Universal Basic Income?

#117

Post by [deleted] »

RivieraKid wrote: post #12

The prevailing view seems to be: robots will take our jobs, therefore we will need UBI, which allows people to live without work. The way I see it, the main problem that UBI is solving is inequality, it's a rich to poor transfer. Excessive inequality is bad because the aggregate utility goes down (rich people don't gain much from an additional dollar, so it's more effectively used by a poor person). Transfering cash…

[deleted]

Re: What Is the Point of Universal Basic Income?

#118

Post by mdorazio »

Pfhreak wrote: post #4

I'm glad we are having this conversation about ubi, but I see a lot of proposals that are basically "just give everyone $X,000 a month and turn off other social services". My big concern with that approach is that we'd see landlords immediately bump rents, or we'd cut medical support for people (when medical bills can clearly be many multiples of ubi). But I'm very pro ubi if we can figure out how to protect the peop…

You're pointing out issues that aren't actually related to UBI. In a properly functioning real estate market, if rents rise to the point where landlords make easy money, more housing gets built and the effect diminishes. The problem is most metro areas have stupid housing and zoning policies so even without anything like UBI we already have massive rent inflation. Fixing the housing situation would largely diminish the potential for UBI to create massive rent increases.

Healthcare is also its own problem that is widely discussed on HN. Any sane national healthcare system would largely prevent huge increases in healthcare costs. Our privatized system is just a horrible model all around.

Also, it's worth noting that most UBI proposals include indexing the UBI amount to inflation, such that if UBI disbursements do lead to inflation, the UBI payments go up to account for it so that UBI recipients are at about the same means on a year-to-year basis.

Re: What Is the Point of Universal Basic Income?

#119

Post by dragonwriter »

crdrost wrote: post #31

Oh goodness, this thing has only been up for 40 minutes and it's already got 20 comments... I will say that the basic thrust of the article seems to resonate for me, in that I did come to hear of UBI first because of a utopian ideal. In my case, it was tax policy. I was very interested in what sort of tax policy would be agnostic about your family structure, imagining a utopia where the government does not need to kn…

> If you still want to judge a household by its total income, as well as the number of people living in it, then the only option is to use a flat tax with a universal standard deduction being the only way to add any sort of progressive taxation structure to it.

No, you can just have a normal progressive tax, with the tax assessment unit being the household, and then distribute the taxes so assessed among taxed members of the household by some method (e.g., proportional to income.)

Re: What Is the Point of Universal Basic Income?

#120

Post by silvestrov »

ThrowawayR2 wrote: post #104
jakelazaroff wrote: post #87

Earlier quoted context omitted.

I can’t read the article, so forgive me if that’s backed by research rather than just anecdata, but… is that really an issue people would have? I would love UBI, because it would transform what I could do with my time. Instead of working 9–5 on software for a company, I could build whatever I want. There are tons of app ideas floating around in my head that I just don’t have time to build. And I could release them fo…

> " ...is that really an issue people would have? " Hell, yes. There are a vast number of low-education people with what the HN crowd would call "old fashioned attitudes". From https://archive.is/CCTXs#selection-1205.100-1205.363 : " 'Being a man means supporting your family,' says Mr Davis. 'You’ve got to do whatever it takes so they eat, [or] you’re no man at all.' Being a man, says Mr Redden, means you 'work hard,…

It's not only low-educated people who suffer.

Highly educated people like lawyers also suffer from self-doubt and stress, e.g. thinking "there must be something wrong with me since nobody wants to hire me".

The "lawyers union" in Denmark asked 127 unemployed lawyers who recently graduated. 65% percent responded that unemployement "to a large degree" negatively affect their everyday lives. Only 3% responded that they are not affected at all. (in Danish) https://www.djoefbladet.dk/artikler/2013/8/ledighed-kan-kn-a...

So even people who are highly educated and for whom it should be easy to do a lot of fulfilling activity, still wants a job. They talk about the emotional burden, they don't talk about wanting more money.

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