[geekfactor]

FYI the April 13 show of the Freakonomics Podcast takes on the question "Is the World Ready for a Guaranteed Basic Income?" and mentions some of the prior studies noted in this article.

[1] http://freakonomics.com/podcast/mincome/

[ultramancool]

A few more good podcast links here, 2 episodes of NPR's Planet Money about GiveDirectly's results:

http://www.npr.org/sections/money/2013/11/08/243967328/episo...

http://www.npr.org/sections/money/2013/08/16/212645252/episo...

Overall the basic income idea... I don't like it in a lot of ways, I just can't see it resulting in a productive society personally. But that's just my gut reaction and I could be wrong, so far the data I've seen is a pretty mixed bag.

I think things like this are a great way to experiment with it though (and without tax payer money). I might change my mind if there's more good data.

[rm_-rf_slash]

Basic income could just as likely increase productivity. Without the need to work, there is a greater incentive to automate jobs. People don't work crap jobs because they like to, they do it because they have to. Anyone who wants a higher standard of living than the basic income minimum can improve their skills while they're sustained by their safety net. Meanwhile, basic income puts more money in the pockets of consumers, creating more market opportunities, especially for the low-cost goods and services those consumers used to work to make.

Or maybe everything I've said is bullshit. Who knows? Only one thing is for sure: without experimentation, we only hurt ourselves in the long run.

[ultramancool]

> Meanwhile, basic income puts more money in the pockets of consumers, creating more market opportunities

I worry that it would be a lot worse than that - that we could create a class of non-workers and workers. Some products would only be affordable to workers and if, like you're saying, those workers are only those working high paying jobs, this is probably how it'd work out. It could perpetually shrink the labor force while forcing those people who aren't working into a lower class in society and overall dropping our productivity at large - setting back the kinds of automation that such a society could require.

Personally I'd almost immediately attempt to drop out of the workforce. And well, software developers are often pretty heavily involved in this sort of automation. So maybe I'm just speaking to my own situation here more than anything.

Of course, this is only speculation, and probably one of the worst possible outcomes I can envision for such a program.

I definitely agree with you about experimentation though, and if the main funds for it are coming from donors voluntarily and not out of the tax payer's pockets then that's all the better. It would be great to have both private and public researchers in on this though, I'll take as many eyes as we can get on the data.

[dragonwriter]

> I worry that it would be a lot worse than that - that we could create a class of non-workers and workers.

UBI is intended to alleviate the problem with means-tested social welfare programs in doing that by reducing the disincentive to taking action which would produce additional income faced by those on means-tested benefits where any additional income results in substantial (sometimes even dollar-for-dollar or greater) reduction in value of benefits received.

And, in any case, economically its somewhat self-limiting (unless you explicitly inflation index the benefit, in which case you are just asking for disaster if you set it wrong initially -- which is why I prefer tying benefits to a defined revenue stream, rather than a set benefit level): if too many people drop out of the work force because the benefit level is too generous given the current level of productivity, it will accelerate inflation, reducing the real level of the benefit, leading more people back into the workforce.

[ultramancool]

> unless you explicitly inflation index the benefit

You can be 100% sure that unless this is specified you'll have people lobbying for it every year. Or just flat rate increasing the UBI, etc. I can envision a strong push from some political groups for this already.

> if too many people drop out of the work force because the benefit level is too generous given the current level of productivity, it will accelerate inflation, reducing the real level of the benefit, leading more people back into the workforce.

This is a good point, but in this case, everyone essentially loses value from savings to pay the UBI. Definitely not a hit I'm interested in taking.

[dragonwriter]

I actually agree with a lot of what you say, which is why I prefer to start a UBI very low (not directly displacing existing programs, but since the income from it counts as income, gradually reducing eligibility for them), tied to a dedicated revenue stream that is expected to grow with productivity (which, unless something else is wrong, should over the long run grow substantially faster than inflation), rather than using a benefit-first calculation.

I'd really prefer to take strong steps to eliminate the risk of overshooting a sustainable benefit level, but -- while there are certainly costs to that -- the "mass exodus from the work force because benefits are too generous" problem is self-limiting.

[comicjk]

Indexing UBI to a revenue stream is a bad idea because the revenue will tend to swing up and down in sync with economic cycles, making bubbles frothier and recessions worse. Constant spending by contrast acts more like an automatic stabilizer. https://en.wikipedia.org/wiki/Automatic_stabilizer

[dragonwriter]

Indexing to revenue is a bit of a simplification. what I really think is the revenue stream should be split between current benefits and a reserve fund, with the reserve fund drawn from to avoid decreases in cyclical downturns. The idea is that the long-term effect should be increasing benefit with productivity, while avoiding short-term benefit drops.

And the effect you describe is really one of overall domestic spending, not one program in isolation.

[maaku]

Why wouldn't I just let someone else figure out how to automate jobs? I've got my income. Let someone else figure that out.

[dragonwriter]

> Why wouldn't I just let someone else figure out how to automate jobs? I've got my income.

Empirically, people often expend effort to increase their income when there are opportunities available, even if their current income meets basic survival needs. I don't see why that wouldn't continue to be the case with basic income. What, people are going to stop wanting luxuries?

[ultramancool]

> What, people are going to stop wanting luxuries?

Not sure about you, but most of the luxuries I own, I've basically only bought because I had money for them. If I didn't have money to blow on them, they really don't bring me that much joy, relatively basic items would suffice.

So many things I think of as the real luxuries these days are free or basically free. I can spend hours watching youtube or playing games for extremely little cost.

I would not exert extra effort to buy better phone or a 4k monitor and a 980ti instead of settling for a weaker setup. Instead I only have these things because the money was there already and I had nothing better to do with it.

Basically, I'd drop out of the workforce in a heartbeat if I could afford living and a few minimal luxuries. $15-20k/year would do the job to split a cheap apartment with a friend and keep the rest under control. This is half of what some people have proposed as a UBI.

[dragonwriter]

You might accurately describe what you would do, but I think the evidence from the world around us is that most people in the US do see sufficient marginal utility in things beyond what it takes $15K-$20K -- or even $30K-$40K -- to afford to exert additional effort to earn beyond that level given the opportunity. So even if we could somehow establish a UBI that would (after accounting for whatever inflationary effect the UBI itself had) provide a standard of living comparable to $30K-$40K in current dollars (which I don't think we can come anywhere close to today), I don't think you'd see a whole lot of people who were had job prospects not working.

[maaku]

> Basically, I'd drop out of the workforce in a heartbeat if I could afford living and a few minimal luxuries. $15-20k/year would do the job to split a cheap apartment with a friend and keep the rest under control. This is half of what some people have proposed as a UBI.

By the way this might be very doable for you on a short timescale, if you pull in the kind of salary most people do on HN. Studies show that if you retire and pull only <4% of your starting balance each year to live off, you can live off it for 30+ years, if not indefinitely. If you were earning $120k, but only spending $20k/yr, you'd have enough wealth to live off after only 7.5 years.

[home_boi]

>What, people are going to stop wanting luxuries?

Yes, check out /r/financialindependence

There's thousands of people living frugally to retire early with ~1-2 million which is basically UBI over a lifetime

[dragonwriter]

"Thousands of people" isn't a very large portion of the population.

[aninhumer]

Wanting to be financially independent doesn't necessarily mean you want to completely stop working. It just means you want to choose how you spend your time.

[lintiness]

that other person was a lot more likely to figure it out anyway.

[maaku]

I suppose he is also more likely to clean the public toilets too?

[refurb]

Without the need to work, there is a greater incentive to automate jobs.

How do you figure? If that were true then that means companies are currently thinking "I could automate all these human jobs, but these guys need work so I won't"?

Not sure I've ever heard a business make that decision.

[ultramancool]

I think the idea is that a UBI would increase the cost of labor by removing some people and some motivations from the work force and thus forcing a higher level of competition between employers.

Increasing the cost of labor increases the incentive for automation to remove the need for the labor.

[dragonwriter]

> I think the idea is that a UBI would increase the cost of labor

Different UBI proponents (which come from across the left-right spectrum) have different ideas, but none of them that I've heard from has favored UBI for the purpose of increasing the cost of labor generally. Especially on the right, but also usually on the left as well, reducing the disincentive to work inherent in means-tested social benefit programs, and avoiding the same problems that minimum wages seek to address while not limiting the minimum economic value a job can produce and be worth offering are frequently cited motivations.

[ultramancool]

> favored UBI for the purpose of increasing the cost of labor generally

But is this still an effect which needs to be considered? I can only see it increasing the cost of labor if people are only willing to work for the luxuries they desire and no longer for the basic living expenses.

By what other means would it encourage automation at all? Or is that not an intention or benefit at all?

[danielweber]

Why is the idea of a permanent underclass unable to work appealing to anyone?