How to debate universal basic income

by Ingrid Robeyns on June 9, 2019

Daron Acemoglu has a piece at Project Syndicate arguing that basic income is a bad policy. His argument, in a nutshell, is that a truly universal basic income (UBI) would be prohibitively expensive, and that raising additional taxes to pay it “would impose massive distortionary costs on the economy”. The alternative, to cut all existing social programs for the sake of UBI, would be “a terrible idea”, since these programs are targeting those that are particularly vulnerable or needy. He argues that the political effects of a UBI would be bad – a UBI would “keep people at home, distracted, and otherwise pacified”, whereas “we need to rejuvenate democratic politics, boost civic involvement, and seek collective solutions”. For Acemoglu, the top priorities in the USA should be “universal health care, more generous unemployment benefits, better-designed retraining programs, and an expanded earned income tax credit (EITC)”, as well as higher minimum wages.

I share Acemoglu’s view that “One should always be wary of simple solutions to complex problems, and universal basic income is no exception.” In a paper I wrote last year (alas, in Dutch, and I haven’t had the time to translate it, but perhaps google translate can help us a little), I’ve argued that the debate on universal basic income is confused and confusing, and will not be getting us far, because too many papers/interventions are not clear about their assumptions, are not spelling out the goals (e.g. is the primary aim poverty reduction or creating freedom from the need to submit to the labour market for survival or something else), and are not giving the details of the package deal.

The detail of the package deal should include information on the level of the universal basic income (at the poverty level, or higher or lower?), who will receive it (only citizens or everyone who legally resides on the territory?), the age (what do children get?), and, importantly, how it will be funded. If the funding of the UBI occurs via cuts of existing social programs, those need to be spelled out. Finally, one needs to consider other policy options that are trying to reach the same policy goals, as well as other societal needs, such as providing better funding for existing underfunded public goods, such as, possibly, the judicial system, the police, or the public universities.

My view on the basic income debate is that too many people in this debate have already made up their minds whether they are in favor or against, and as a consequence there is not enough participation of people who do not have a strong conviction (for or against) but who are willing to take the idea seriously, and study it with an open mind. Since most people who write on basic income are arguing in favor, this closed-minded-activist mode is most visible among its advocates. But this piece by Acemoglu shows that my plea for a more nuanced, more detailed, and more comparative analysis also holds for those who attack basic income. Granted, on the comparative part he does say which other policies he favors, which is a good thing since it invites basic income advocates (in the USA) to argue why they believe a UBI is better than the social changes that Acemoglu advocates. It could also allow others to ask why none of the social programs that they would prioritize, such as free high-quality child care and parental leave, are on the list of priorities.

Acemoglu ignores the freedom-enhancing effects that UBI will have (even a small basic income). He ignores that it may empower workers relative to employers, since a UBI improves the quality of the exit options of the workers. His arguments that basic income would make people politically passive are exactly the opposite from the assumptions that basic income advocates make, and as far as I can tell these are things one cannot predict, either way. He assumes that holding a job is in itself a good thing (which arguably depends on whether it is good/decent work or not). The implicit account of well-being he is using seems very “productivist“, and does not take into account that there is more to life than earning a living on the market, and that some dimensions of well-being may be positively correlated with not having to take whatever job one can find. Moreover, his claim that raising the taxes for a basic income would be prohibitively expensive is just as unproven as the claim of some basic income advocates that a basic income can be funded (often these claims are rather simplistic calculations based on the aggregate availability of money/the size of GDP, not taking the disincentive effects of increased taxation into account, nor whether increasing taxation is politically feasible in a globalised economy; this is why I think one of the first tasks basic income advocates should now take on their plate is to propose how they would fund a basic income, and why they believe that their proposal for funding is politically feasible, and why those collected funds should not be spend on something else – for example, why ecological taxes should be spend on a UBI rather than on financing climate mitigation & adaptation funds).

How, then, should we debate basic income? Arguments for or against (or, simply, analyses) a basic income should:
1. make explicit what the goals are that a basic income is supposed to meet or what problems one hopes it will solve, and what values are taken to be at stake and how those are values are understood/conceptualized;
2. be careful about the (implicit) empirical assumptions that are made, and how much evidence we have that these will occur in the context for which we are writing (for example, we can’t simply assume that behavioral effects in context A will also occur in a different institutional or cultural or historical context);
3. give the details of the basic income (level, scope, how it will be funded, which social programs will be cut, etc.);
4. make a comparison with other policy options that serve the same goals/values.
And, of course, since money can be spent only once, why those goals are more urgent than other goals that require money.

Of course, Acemoglu’s piece is an Op-Ed and not a scientific paper, and the above requirements are difficult to examine all in a short piece. But the general point stands: he has made up his mind, and my point is that one can only do this if one has well-thought-trough answers to the above issues, and several of those are lacking in his piece.

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1

Avery 06.09.19 at 5:01 pm

Bravo! Thank you for insisting that UBI requires a serious conversation.

2

Joe 06.09.19 at 8:48 pm

Highly recommend the new-ish book by Canadian economist Evelyn Forget, “Basic Income for Canadians.” It’s the best example I’ve seen of an argument laying out all of these aspects, as well as getting into other potential implantation issues such as federalism. It’s very well written, reminiscent of Lane Kenworthy for concision and focused argumentation.

3

Gareth Wilson 06.09.19 at 9:22 pm

I want to know how a UBI would deal with three people:
Tony, who is a billionaire CEO.
Bruce, who has a chronic medical condition requiring very expensive ongoing treatment.
and Trevor, who has no interest in any kind of work and just wants to lie around all day drinking and taking drugs.
Would they each receive the same UBI? Would they receive any other benefits?

4

Mike Huben 06.10.19 at 1:14 am

Some thoughts that came to my mind when I read the Acemoglu article.

First, funding the UBI would not be distortionary or require taxation if it was paid from a . Essentially, the social wealth fund would have ownership of the sources of income that the rich currently enjoy. So there would be no different “distortion” of the economy than the rich are currently providing.

Second, if the UBI was at the minimum wage, then minimum wages could be abolished and people could work at any rate they chose. Thus arguments about the importance of jobs become moot, because anybody can have a job at a sufficiently low rate.

5

John Quiggin 06.10.19 at 5:12 am

Excessive dogmatism about the form of a UBI is a big problem. I argue here that
(a) when fully implemented, UBI and Guaranteed Minimum Income are essentially equivalent as regards effective marginal tax rates and income distribution
(b) it’s best to start by expanding access to basic income. Acemoglu’s points here are good.

6

Dipper 06.10.19 at 5:51 am

What do you do about immigration and borders? Because if you are offering free money, then there are several billion takers for that round the world ready to turn up in your country to receive that particular benefit.

7

Ingrid Robeyns 06.10.19 at 6:25 am

@Joe – thanks, haven’t read it, will do in due course.

@Gareth Wilson – they would all receive the same UBI (that’s its point), but what, if any, the effects would be on disability benefits, is one of those things that needs to be spelled out. In defense of the UBI defenders, though, there are hardly any proposals that try to abolish disability benefits.

@Mike Huben – the question is whether a UBI at a minimum wage level is fundable. in some countries, in which the minimum wage is high and there are already elaborate social programs and public goods, it is probably not.

@John Q. – do you mean with “dogmatism about form” the debate over UBI versus NIT? And one question would be whether the effective marginal tax rates and income distribution are the only things that matter, or whether there are other differences that are significant.

@Dipper: some proposals I’ve seen suggest to give migrants income tax deductions up to the same maximal level as a UBI. But that would mean the citizens get it even if they do not work, whereas the migrants only get it as a tax deduction if they have earned enough.

8

Gareth Wilson 06.10.19 at 8:47 am

Thanks. It’s logical enough that Tony should get the full UBI even though he doesn’t need it – he’d obviously be paying enough tax to cover thousands of people’s UBI. But what the voters see as fair isn’t always logical.

9

nastywoman 06.10.19 at 10:49 am

– as it has been proven that the most important ”giveaway” of a well working democracy is the creation of ”satisfying” and ”well paying” jobs – UBI could be added (afterwards) – if there isn’t already a well working ”social net” which provides already enough money for everybody to live ”a decent life” –
-(and call it ”UBI” if ”y’all want)

10

John Quiggin 06.10.19 at 12:06 pm

@Ingrid “do you mean with “dogmatism about form” the debate over UBI versus NIT? ” Yes, but more so now the debate over UBI vs GMI.

“And one question would be whether the effective marginal tax rates and income distribution are the only things that matter, or whether there are other differences that are significant.”

There are lots of important issues that remain to be resolved after the determination of the basic structure of EMTR and income distribution, including those you mention in the OP. Typically, advocates of UBI have given different answers to these questions compared to GMI and NIT. But I think this isn’t a matter of logical implication, rather the fact that different types of people have been attracted to different versions of the policy.

11

Mike Huben 06.10.19 at 1:43 pm

Ingrid Robeyns @ 7:
“the question is whether a UBI at a minimum wage level is fundable. in some countries, in which the minimum wage is high and there are already elaborate social programs and public goods, it is probably not.”

Of course it is fundable. As long as minimum wage is less than average take home pay (pay after deductions for social programs and public goods), there is enough wealth. It’s a matter of distribution, not wealth. And the simplest way to achieve that seems to be constructing a social wealth fund.

I’m curious to know whether any first-world nation has minimum wage more than average take home pay. I doubt it.

12

Dipper 06.10.19 at 4:23 pm

I’m left wondering whether the UK does, to all intents and purposes, already have a UBI. People can pretty much not work, have a place to live, get some money, and have free healthcare and education for their children. Claiming some kind of medical benefit seems to seal the deal for many. It is certainly the case according to local lore that native Brits turn down low-paid manual work, because it would mean losing benefits (or, to be generous, in the event of them losing the job, running the risk of not being able to get back onto UBI/benefits).

In which case, much of the hypothetical discussion above about what might or might not happen in the event of a UBI being introduced can be replaced with a discussion about what actually happens when citizens can draw on an income as an alternative to working. And the answer from the UK experiences, is that it is complicated as different people respond differently.

A response may be that people receiving benefits lose benefits when they work at a rate of 100%, and certainly the case for Universal Credit is to eliminate that enormous marginal rate of taxation. Experience is that even when marginal rates of taxation exceed 100%, some people still chose to work.

13

stephen 06.10.19 at 5:47 pm

Ingrid Robeyns@7: fine, have different systems for citizens who get UBI whether they work or not, and for immigrants who have to work to get the equivalent. Maybe that could be done.

But to deal with Dipper’s original objection, “if you are offering free money, then there are several billion takers for that round the world ready to turn up in your country to receive that particular benefit”, then under your proposal you have to impose a system that makes it really difficult for (all but a few) immigrants to become citizens. I foresee some problems there.

14

Orange Watch 06.10.19 at 8:41 pm

Stephen@13:

A required term of residency prior to switching from tax credit to standard UBI would presumably forestall most problems you allude to. Immigration seems more like an excuse than an intractable problem.

15

Reason 06.10.19 at 9:01 pm

Gareth Wilson
I thought as an advocate I would answer your questions.
Firstly all would receive the UBI. I’m in favour of bringing it in gradually, initially as an offset to environmental taxes, but in principal I think things like the basic deduction should be subsumed into UBI as would some part of unemployment benefits and state pensions including disability benefits. I’m of the view that special assistance for disability is best anyway being given in kind, and reduced bureaucratic enforcement needs may free up resources for this. As for the lay-about who chooses guaranteed poverty, would you want to employ him? But none-the-less these people may be useful because of the regional aspect of UBI which as far as I know only Steve Waldmann at interfluidity has pointed out. The UBI will enable people to survive but not necessarily anywhere. More people will chose to live where they can afford to live rather than where they can find work. And their spending may bring new life to dying places.

16

Reason 06.10.19 at 9:09 pm

As regards immigration, UBI would mean that a basic wage is no longer required and there would be a substantial qualifying residency before you could receive a UBI. I’m not actually an advocate of open borders (mainly because of environmental considerations) but there are models of UBI that would actually reduce the incentive for low skilled immigration. It could be impossible to survive until you qualify unless you have needed skills. The locals can live on a lower wage than you can.

17

Reason 06.10.19 at 9:10 pm

Dipper, no that is not a UBI, a UBI gives no disincentive to work and that is a crucial point.

18

J-D 06.10.19 at 10:33 pm

Dipper

I’m left wondering …

Is that because you did not invest a modicum of effort in research?

… Examples of “extreme hardship and distress” included a wheelchair user who, “sofa-surfed” or slept in a college library for a year when her whole benefit was wrongly withdrawn. A man was sanctioned because he missed a job centre appointment three days after he went to hospital with severe epileptic seizures. …

Sanctions have been found to be ineffective in getting claimants into work but do great harm to the claimants, especially to disabled claimants who are disproportionately targeted with sanctions.

We [Oxfam] have spoken to people who have had delays and sanctions for mundane reasons, such as not having the right ink to fill an application or missing appointments due to sickness which is unacceptable. …
The Guardian has listed ten cases of stopped benefits … three people who were in hospital due to their own sickness or attending a sick partner and a person who went for a job interview instead of attending the job centre … letters sent by the DWP to the wrong address and people who arrived on time at the job centre but found an unusually long queue. The Independent cites a man who had a heart attack during a work capability assessment and was sanctioned for not completing it. Two cases show reasonably foreseeable consequences for sanctioned diabetic claimants, one resorted to begging for food whilst another who was apparently unable to afford to keep his insulin properly refrigerated was found dead … In the last quarter of 2013 there were 227,629 claimants sanctioned, a rise of 69,600 compared to the equivalent time in 2012. Over a million British claimants were sanctioned between October 2012 and December 2013. … Even when benefits are restored on appeal the stress sanctions cause can worsen mental health.
… There has been a ‘climate of fear’ at job centres with staff under pressure to sanction innocent people to meet targets. … Sanctioned claimants and their families sometimes need food banks to get something to eat. … People with Learning disability frequently have trouble understanding what is required of them. …
… people with a learning disability have been sanctioned again and again for not completing tasks which they simply were not able due to their learning disability.

Citations and more information at:
https://en.wikipedia.org/wiki/Jobseeker%27s_Allowance#Claimant_Commitment

19

dilbert dogbert 06.11.19 at 1:26 am

Nice debating society points but here in the US all that comes to mind is:
Snowball
Hell
Chances of

20

Dipper 06.11.19 at 7:36 am

@ REason

“a UBI gives no disincentive to work .” Well, much paid work is pretty unpleasant, so work itself is a disincentive to work. And given many people behave as if they have a choice, then it in some ways simulates a UBI.

Much discussion about UBI seems to take place on a hypothetical basis, and I’m just saying that it would seem to be sensible to start with existing welfare systems, look at how people respond to those, and look at how incremental changes to those existing systems might change existing behaviour.

@ J-D

“Is that because you did not invest a modicum of effort in research?”

living in the UK, I don’t have to do ‘research’ as this is pretty much on the news every day. But if I do ‘research’ then Kate Belgrave is usually a good place to start.

There are several points that keep cropping up with regularity when looking at people at the bottom end of the social spectrum. A shortage of housing is normally top of the list, then relationship breakup, then addiction. If you set about importing a population somewhere in the range of Sweden or The Netherlands, which the UK in the EU is doing, and don’t build a physical and logistical infrastructure on the scale of Sweden or The Netherlands, then you are going to face a squeeze on resources such as housing, and a UBI is not suddenly going to magic up an increase in the housing stock, hence introducing a UBI in the UK is not going to change the problems with housing.

There was a radio 4 program many years ago about the 2001 census which looked into why it had missed so many young men. They went to Manchester, and found on several estates that what had happened was women with children occupied most of the social housing receiving money going directly to them. Men came and went, ‘earned’ money as and when, and when asked why they hadn’t filled in the census form one said ‘if I don’t bother the state then the state won’t bother me’, which seems a fairly logical attitude.

So here’s an example of how state funding changes behaviour, in that if men have their ‘traditional role’ as provider taken away from them, then women, unsurprisingly, soon find no reason to have them around, making the place untidy and generally getting in the way as we do.

So I’m wondering if UBI research has looked into how it changes the structure of society and particularly changes the role of men, for instance. Given that when mothers receive a state income, many of them dispense with men fairly quickly.

21

reason 06.11.19 at 8:11 am

@dilbert dogbert
Yes but they said the same about Trump becoming president. Pigs may indeed end up flying in this strange age.

22

reason 06.11.19 at 1:33 pm

I just want to put a couple of questions out there for people who think who think somehow that prioritizing providing jobs over providing economic security (including for people like mothers of young children and people taking care of aging parents).
1. Which do you consider the bigger problem, (A) people who want work but can’t find it, or (B) people who don’t want to work but are forced to.
2. Is (A) helped or hindered by (B)?

23

reason 06.11.19 at 1:43 pm

Dipper,
so you are admitting to being a misandronist. You think men are incorrigibly bad, and women would rather live without their income than without it?

24

reason 06.11.19 at 2:45 pm

Corrections
@22
(missing phrase at end of first sentence) is the choice we should make. – Note the point is I don’t think that is actually the choice we are making.
@23
… live without their income than with them and with their income (note with UBI two people = two certain incomes).

25

Dipper 06.11.19 at 3:09 pm

@reason – never was a name less appropriate.

I am just saying that in the report, in Manchester many women were quite happy to not have men permanently around. Women had tenancy of the houses, and men came and went.

I’m not sure why you think my opinions are of importance here. I’m just pointing something out. When you change incentives, peoples behaviour changes, and those changes may have consequences. Whether those behaviours and consequences correspond with my view of right or wrong is of no relevance in discussing the consequences of UBI.

26

Dipper 06.11.19 at 6:06 pm

@ reason .. well the men in Manchester were capable of contributing an income. But a UBI would surely include an amount per child, in all likelihood going to the registered carer which is often the mother. The UBI for the man pays for the man, and is not an amount for his children for him to allocate as he sees fit. So the man’s income has no bearing on the women and her children receiving an income, unless the man chooses to make a particular gift of it.

The report in Manchester gave a number of examples. Other examples are available I’m sure. But the arrangement of incomes produced those reported. In the discussion of UBI, I think it relevant that a particular welfare system with some characteristics of a UBI produced a specific set of results. And to repeat, it gives a test case of distributed income and social effects that surely gives a point of information for actual UBIs?

27

stephen 06.11.19 at 7:01 pm

Orange Watch @14, Reason @16:

Yes of course, a qualifying period for immigrants before they receive UBI would be essential.

But a problem I foresee is: how long should that period be? I think everyone on CT would agree 60 years would be too long, 6 months would be too short. Problem I can see looming is that minimum period needed to avoid Dipper’s problem is likely to be substantially longer than maximum period tolerable to progressive consciences (or at least, publicly agreed to be tolerable).

28

Reason 06.11.19 at 9:01 pm

Shorter dipper a creature with some of the same genes as humans is a giant and deadly carnivore. Can you make a sensible argument in this thread, I really don’t like having to be sarcastic.

29

Dipper 06.12.19 at 5:37 am

@Reason – oh go on be sarcastic.

You seem to be making arguments in a complete vacuum; if we gave money like this, then these things would happen. And I’m pointing out we already give money, and the giving of money appears to make certain things happen in certain occurrences. And this seems to be playing with your mind somehow.

There is a delusion that pops up frequently on CT that we can have in mind some intended desirable outcomes, introduce a policy that we intend to deliver those outcomes, and the policies will in fact have just those desired outcomes and no others. In reality, these policies have lots of unintended consequences, and often don’t deliver their intended outcomes.

30

reason 06.12.19 at 7:22 am

Its not just dipper though, many, many people seem to switch off their brains when talking about this issue. I’m not sure why. Perhaps:
1. They don’t realize what a radical change it is;
2. They don’t understand the crucial difference between incentives at the margin and average effect;
3. They think it is a left versus right conflict. They forget that Milton Friedmann pushed something similar. It is a rational welfare versus irrational welfare issue. People who think (or wish) that we can do without welfare completely are therefore against it, even when they grudgingly accept existing welfare – they are giving up their utopia.
4. People think paid work is a social value in itself, regardless of the real value of that work and can’t see that people can be of value even when not in paid work.

Not sure how to combat all those things. We need tools to suspend disbelief. Science fiction or fantasy maybe.

31

Dipper 06.12.19 at 8:11 am

@ reason “many people seem to switch off their brains when talking about this issue” indeed they do.

To your points.

1. What? I’ve been pointing out that changes have consequences, so radical changes have very big consequences.
2. What? Incentives operate on individuals and individuals respond, often in different ways.
3. Left vs right? I haven’t passed any political judgements, or moral ones for that matter. When I point out that welfare payments appeared to have had the effect of taking many men out of families, I’m not saying that is good or bad, I’m just pointing out it is a consequence
4. As a rule, if work is of value it should be paid. Money is how we assign value to things. If valuable work doesn’t necessarily require pay, then I have a garage to clear out, a house to tidy, and then there’s the garden. Whenever is convenient for you …

I haven’t said anywhere whether I am for or against a UBI. I’m just asking questions, and pointing out things that have happened in aspects of welfare policy that have some features of a UBI.

Presumably people think a UBI is a good thing because it will produce consequences that are deemed good. In which case it seems reasonable to ask what those might be. Or do you think it a good thing regardless of the consequences?

32

J-D 06.12.19 at 9:01 am

Dipper

It’s obviously the case that, in general, the provision of government-funded benefits affects people’s behaviour; and it’s reasonable to suppose that a Universal Basic Income would also affect people’s behaviour, although perhaps not so easy to be sure exactly how. That doesn’t seem to me to be disputed.

I can’t figure any way, however, to reconcile the information provided by Kate Belgrave at the Web page you cited with your earlier characterisation of the present situation in the UK (‘… the UK does, to all intents and purposes, already have a UBI. People can pretty much not work, have a place to live, get some money, …’). If Kate Belgrave’s reporting is accurate, people in the UK cannot simply decide not to work and rely on having a place to live and being able to get some money. In contrast, any UBI, by definition, would guarantee that people could rely on being able to get some money whether or not they worked.

33

Orange Watch 06.12.19 at 3:26 pm

Dipper@31:

To pile with J-D@32, you’re doing precisely what you accuse reason of doing: you’re ignoring how policy decisions have specific consequences and reasoning in a vacuum. Much welfare as currently implemented dis-incentivizes work; you can either work or receive benefits. UBI does not, at least according to putative foundational assumptions of market economics. Unless we assume there exist classes of humans who are fundamentally differently motivated than others, your objections to UBI suggest that a significant or perhaps even overwhelming portion of people would cease to have any ambition once they were no longer at risk of starvation nor exposure. Market capitalism is premised on an idea that humans are profit-seeking, and not merely motivated by basal wants. Your claims do not work well unless we assume that certain people can only be compelled to work by fear of death, and are thus impervious to direct influence by market forces, while others are capable of wanting to improve their lot beyond eating and not freezing to death. If you agree with this analysis, that’s one thing, but I am strongly under the impression you are a believer in markets and their “magic”. Your stance here seems to firmly repudiate a number of key assumptions about the utility of market capitalism, and it’s hard not to see its underlying rationale as a fairly drastic and essentialist social Darwinism.

34

Dipper 06.12.19 at 5:42 pm

@ J-D

“people in the UK cannot simply decide not to work and rely on having a place to live and being able to get some money.”

And a UBI would change that how?

Some people who have, so to speak, their feet under the benefits table have housing and can exercise choice on whether or not they work, But ultimately, If the demand for housing exceeds the supply, then someone is going to go without, and a UBI isn’t going to change that. Kate Belgrave does a great job documenting the horrors that befall people who haven’t got a safe haven in the benefits system, but if (with regards to housing) demand exceeds supply, then no matter how you cut it, someone is going to go without.

35

J-D 06.12.19 at 10:01 pm

Dipper

Presumably people think a UBI is a good thing because it will produce consequences that are deemed good. In which case it seems reasonable to ask what those might be. Or do you think it a good thing regardless of the consequences?

The hope and the (plausible) expectation is that a UBI would eliminate, or at any rate mostly eliminate, destitution. (Is that answer difficult to arrive at?) Destitution is a bad thing: therefore, eliminating it, or even mostly eliminating it, would be a good thing.

36

J-D 06.13.19 at 5:51 am

Dipper

My comment had two points.

The first was that Kate Belgrave’s accounts contradict your earlier assertions, both about people in the UK being able to rely on getting money without working and about people being able to rely on being housed (without working, or even if working for that matter).

The second was that a Universal Basic Income would, by definition, change one part of that, the part about not being able to rely on getting money without working. That’s what the ‘Universal’ part of ‘Universal Basic Income’ means: everybody gets it. By definition, something that some receive and others don’t is not universal. It is true that a UBI would not, by itself, automatically guarantee housing for everybody, although it seems reasonable to expect and to hope that it would improve the housing situation significantly (even though we can’t know for sure unless it’s tried).

I’d do a little two-by-two or three-by-two grid to make this clearer, but alas! the comment box does not offer the facility.

37

Dipper 06.13.19 at 6:04 am

@ Orange Watch “Unless we assume there exist classes of humans who are fundamentally differently motivated than others”

Local observation would suggest there are. Some people want to work no matter what, some people want to avoid work if at all possible.

@ J-D “The hope and the (plausible) expectation is that a UBI would eliminate, or at any rate mostly eliminate, destitution” in as much as a shortage of social housing causes destitution, then the solution is to build more social housing until demand is met, rather than give people an income to spend on houses that don’t exist.

38

reason 06.13.19 at 7:52 am

@Orange Watch
I’ve decided it is a waste of time dealing with Dipper and that he either obtuse or a troll. His argument always seems to be we don’t know anything and so should do nothing regardless of what we are talking about.

You are perfectly correct about the importance of unconditionality, poverty traps and marginal incentives. The difference between receiving unemployment benefits and a UBI is that if I get unemployment benefits I am compelled to look for work AND they disappear when I do get work. Obviously, the incentive is to “look” for work, which means heavy handed enforcement costs, which are always being ignored. Conditional welfare mean intrusive bureaucracy. Strange that anti-state people seem to all for it. Strange also that people who think some people need to forced to work (i.e. that it a good thing to employ slaves) are very often the very same people who think we don’t need more voluntary labour (i.e. we need to stop immigration). I sort of wish they would make up their minds.

39

Dipper 06.13.19 at 10:09 am

… and what if an addict spends all their UBI on their addiction, whether it be gambling, drink, or drugs? Are you going to tell that person that you gave them enough money to live on, how they spend it is their business, so their homelessness is their fault? Or are you going to augment UBI with guarantees around housing? In which case, what is the point of the UBI?

40

equalitus 06.13.19 at 10:51 am

The conflation/confusion between basic income guarantee and universal income must be addressed. Inflation and taxation must be addressed. Rentier seeking and dividends that is mostly a private sector factor, must be addressed by the moral arguments and few other than Matt Bruenig did so extensively.
In some poor countries there aren’t decent government provided education, healthcare or minimum welfare programs, a BIG or UIB would do great here since it’s all about poverty levels not the expansion or reduction of a industrialized middle class.

41

Orange Watch 06.13.19 at 2:22 pm

Dipper@37:

Local observation would suggest there are. Some people want to work no matter what, some people want to avoid work if at all possible.

“Local observation” by its nature is biased. There is no control group, and it’s a superficial observation of nothing but glaringly obvious details that a third party can observe. And again, in your rush to claim a moral high ground, you miss that your reasoning fundamentally suffers the same faults you’re deriding in others. If welfare requires you to apply for it and fight to get it, you can obtain either or both a conviction you earned it or a justifiable fear that if you were to lose it you couldn’t get it back – and in the latter case, taking on work from which you might be fired (or might lose some or all benefits from merely having) can jeopardize said benefits. As J-D has patiently pointed out, and as you have elided (in favor of insinuating that groups of people to which you don’t belong are different in deep, morally significant manners and cannot be compelled to change these shortcomings), UBI eliminates these dis-incentives. EVERYONE gets UBI, whether they work or not, so getting it cannot be an accomplishment nor is fear of losing it possible. I’ll remind once more that you have no control group for your shallow observations; if the choice is unrewarding or degrading work that offers no benefit in exchange for risking benefits you already managed to secure, there’s less incentive than if you can work in some manner that you find fulfilling without risking your existing protection from destitution. If you want to look at fundamentals of human nature, you should be looking towards the more-or-less universal trait of loss aversion and not speculating about an essentialist propensity in some groups of humans to laze about.

42

reason 06.13.19 at 3:36 pm

equalitus
I really don’t like a basic income guarantee because it sort of defeats the purpose of using UBI – naming avoiding perverse incentives and reducing bureaucracy. The advantage of a BIG is that requires less revenue be raised – i.e. it is less redistributive. But given the absurd levels of inequality almost everywhere in the world now, I consider that a disadvantage not an advantage.

The other point that hasn’t been mentioned about UBI is that almost certainly will increase innovation, because people will have less fear of the future. It is a big change though – that is why I think maybe it should be phased in. I like to call it a national dividend rather than a UBI so that it can be introduced at levels below a living income (at least for a single individual). Once it is there, I think it will be hard to repeal (because people will make longer term plans based on it, and we all know that people respond more strongly emotionally to losses than to gains).

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reason 06.13.19 at 3:49 pm

This is another attempt at any earlier comment held up in moderation.
@Orange Watch
You are perfectly correct about the importance of unconditionality, poverty traps and marginal incentives. The difference between receiving unemployment benefits and a UBI is that if I get unemployment benefits I am compelled to look for work AND they disappear when I do get work. Obviously, the incentive is to “look” for work, which means heavy handed enforcement costs. Conditional welfare means intrusive bureaucracy.

Strange that anti-state people seem to be all for it. Strange also that people who think some people need to be forced to work (i.e. that it a good thing to employ slaves) are very often the very same people who think we don’t need more voluntary labour (i.e. we need to stop immigration).

Do we need more work done or not? If not then shouldn’t we welcome people who are not working making it easier for those who want to work to find it? If yes then shouldn’t we welcome immigrant labour? I sort of wish they would make up their minds.

44

Dipper 06.13.19 at 5:43 pm

@ Orange Watch I’ll remind once more that you have no control group for your shallow observations;

What? ‘Control group’? This is people we are discussing, not bacteria. I’m just pointing out that in some cases which have some similarity to UBI, some people behave in a particular way. They behave this way independent of what other people do when presented with the same incentives. I’m not sure what a ‘control group’ has to do with this.

“in favor of insinuating that groups of people to which you don’t belong are different in deep, morally significant manners and cannot be compelled to change these shortcomings” double what!! I haven’t made any moral judgements and I haven’t described any behaviour as shortcomings.

I’m just saying we have actual cases of incentives that have some similarities to UBI, and some cases of how some people have responded to those. And you seem to be saying these aren’t relevant. So what actual histories are relevant?

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Dipper 06.13.19 at 7:26 pm

… and the birthrate. Would effect would you expect a UBI to have on the birthrate? If the state steps in as provider, and is happy to fund per child on a basis sufficient to fully pay for them, then that is quite a different scenario to a man who calculates how much each extra mouth to feed will cost him.

For some women, having babies and looking after small children is simply the best thing on the planet. If the state is happy to pay, and provide all associated material goods, why would those women not simply carry on having babies? So a UBI could see an increase in the birthrate. Again, I’m not making moral judgements. Many European countries, eg Hungary, would really like a higher birthrate. Your plans for a UBI could be just what Orban is looking for

46

J-D 06.13.19 at 9:34 pm

Dipper

Destitution and homelessness are not synonymous. Many people are destitute without being homeless (people can and do starve to death without being homeless) and some are homeless without being destitute.

… and what if an addict spends all their UBI on their addiction, whether it be gambling, drink, or drugs?

Then the UBI will not have solved their problems, but so what? Nobody expects that a UBI will solve all of everybody’s problems: that’s not sense. But it’s also not sense to reject a proposal because it’s not a panacea.

Advocacy of a UBI does not entail rejection of proposals to build more social housing: the two possibilities are not mutually exclusive. You appear to be setting these two ideas up in competition with each other: that’s not sense.

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J-D 06.13.19 at 11:08 pm

Dipper

There is a delusion that pops up frequently on CT that we can have in mind some intended desirable outcomes, introduce a policy that we intend to deliver those outcomes, and the policies will in fact have just those desired outcomes and no others. In reality, these policies have lots of unintended consequences, and often don’t deliver their intended outcomes.

We can never know for certain what the consequences will be of choosing to implement a new policy until after we have done so; but then, we can also never know for certain what the consequences will be of choosing to continue with existing policies unchanged, until after we have done so. Being faced with choices without certain knowledge of the consequences is the human condition: it is not a sensible response to it to make no choices whatever, and it is also not a sensible response to it to choose never to do anything new but only ever to continue with what we’ve done before.

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Orange Watch 06.14.19 at 6:42 am

Dipper@44:

The idea of a control group is to rule out the outcomes you’re discussing arising from the parts of my comments (and J-D’s, and reason’s) that you’re failing to address in favor of repeating your assertions. I.e., we explained how the incentives are NOT the same, and you’ve repeatedly elided those inconvenient parts of our comments. To use your judgemental language: you’re suffering from a delusion that you can have in mind some undesirable outcomes, introduced by a policy you also have in mind, and the outcome must in fact be derived just that policy and no others. In reality, these outcomes have lots of unmentioned causes, and may not even be a necessary result of the policy you have in mind.

So what actual histories are relevant?

Ones that don’t involve disincentives to seeking work while receiving benefits. If you don’t have those on hand, then I’m afraid we’re moving into uncharted waters.

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P.M.Lawrence 06.14.19 at 1:51 pm

Daron Acemoglu has a piece at Project Syndicate arguing that basic income is a bad policy. His argument, in a nutshell, is that a truly universal basic income (UBI) would be prohibitively expensive, and that raising additional taxes to pay it “would impose massive distortionary costs on the economy”.

My own view, with two sizeable caveats, is that the economy is already distorted in this area and that a suitable UBI would operate as a Pigovian fix to this rather than introducing further distortion. The caveats are:-

– It would only work at the right levels, which in my view are not what UBI proponents have in mind. It would have to be insufficient for survival, just enough to work as a top up while still requiring people to get the rest by working. It’s just that enough of them would find it realistic enough to price themselves into enough work.

– As the above caveat hints at, there would be huge transitional issues getting there from here that way. That is why I personally prefer a variant that bypasses all that, the Negative Payroll Tax approach of Professor Kim Swales and his colleagues at the University of Strathclyde.

The alternative, to cut all existing social programs for the sake of UBI, would be “a terrible idea”, since these programs are targeting those that are particularly vulnerable or needy.

It isn’t either/or. The right mix of policies to handle all those transitions would involve different measures going on in varying amounts and respects at different times, going up through the gears, as it were.

The detail of the package deal should include information on the level of the universal basic income (at the poverty level, or higher or lower?), who will receive it (only citizens or everyone who legally resides on the territory?), the age (what do children get?), and, importantly, how it will be funded. If the funding of the UBI occurs via cuts of existing social programs, those need to be spelled out.

Some of the answers are implied by my earlier points. Roughly, though, here is what and why:-

– The UBI should be set lower than the poverty level, as a mere top up, though supplemented by other measures, some only transitionally. I can’t analyse directly what it should be, so I would suggest that it should initially match existing lower level benefits and not be indexed at first.

– Everybody, legal or illegal, should receive it as the alternative is that illegals will impose external vagrancy costs anyway. That doesn’t mean endorsing illegals, just not testing for them within this system; they should still be dealt with appropriately, just under different systems so as not to create or rebuild that externality.

– Children and other dependents should not get it, but there should be a realistically rapid and easy pathway for them to set out on their own and qualify that way. The existence of dependents is a reason for having other measures around as well, not for lifting with your back by making a UBI handle them.

– With a Negative Payroll Tax, the tax system heads it off as virtual funding, with no funds flow through the government unless and until the compliance gets monetised, e.g. with vouchers. It starts out revenue neutral and stays budget neutral, as tax revenues only fall in step with people leaving unemployment programmes; their funding would not be cut automatically as such, but their outgoings would fall automatically and in step with employment rises, and that would produce the same outcome. But their would be no need to cut their funding first so as to fund a separate programme that would only deliver later.

But I haven’t given you the policy discussion and grounds you were hoping for, that underlie my position. I do have them, but I would like to delay that. I suspect they overlap Mike Huben’s.

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J-D 06.14.19 at 11:04 pm

Dipper

It is highly probable that a UBI would make it easier for people to make the domestic arrangements they prefer, by reducing economic pressure on them to do otherwise: if so, that would be a good thing (regardless of what those preferences are).

Over recent decades, most parts of the world have experienced some decline in birth rates. People have argued that a principal factor causing this has been expansion of the economic, social, and educational opportunities available to women and girls. It is probable that a UBI would result in an expansion of economic and social opportunities for most people, which would be a good thing, and if that also drives a decline in birth rates, that would probably also be a good thing.

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