[gautambay]

i prefer universal essential services (healthcare, education, etc.) over a guaranteed basic income.

with basic income, you run the risk that the receivers spend it on shiny objects (especially in an economy like ours with rampant consumerism) instead of things that benefit them and their families long-term.

of course, what constitutes "essential services" can be the subject of a lengthy debate.

[roc]

> "i prefer universal essential services (healthcare, education, etc.) over a guaranteed basic income."

If we believe in the market's ability to efficiently find the path forward, identifying "essential services", even if it were possible, is wasteful at best and more likely counter-productive over time.

Twenty years ago we'd have locked in home phone service and missed internet. 10 years ago we might have locked in cell service, but missed mobile data. We'd have propped up "bad" products, at massive profits for the benefactors, for years beyond their relevance, instead of allowing the market to evaluate and react to changing conditions.

And while we might agree that it's logically possible for efficient and effective government to correct mistakes like those, the "money is speech" reality in the US gives such outsized power to lobbying interests that even an optimist has to rate effective "steering" of any definition of "essential services" as "unlikely".

Never mind the basic question of whether it's at all desirable to force a youth from an underprivileged family to "buy" government-guaranteed education, instead of allowing him to spend even a fraction of the equivalent on a laptop, smartphone and developer tools -- or a 3d printer and amazon hosting services. Or even allowing him to look outside the box of lobbiest-approved education providers, and allowing him to "spend" his assistance on developer conferences or workshops or online learning or just moving to another town that has a better local program.

Would some people inevitably spend a guaranteed income poorly? Of course they would. They also sell food stamps for cash -- at 50% of their face value -- to make their bad decisions regardless of what we might prefer.

It isn't worth the cost to try to enforce "essential services" spending at the micro level. It's too rich a target for corporate lobbyists to define approved services at the macro level. And at the economic level, there's little reason to believe it will give us better outcomes.

[gautambay]

Fair points, all.

However, markets fail when there is a misalignment of incentives and/or lack of information/education. I view the government's job primarily as aligning people's incentives with the desired long-term direction.

In India (where I'm from), there have been decades of dole-outs for the poor (especially farmers), but it has failed to create any long-term economic benefits for those communities. On the other hand, education (both for the farmers and their children) has been far more effective in uplifting people out of poverty.

I realize that the average American is more educated and has better access to information that the average Indian farmer. But still, you can be assured that some of that "basic income" will be going into a slot machine.

Perhaps the solution is a basic income with some restrictions / incentives around how to spend it?

[scarmig]

I doubt that the basic income bears much resemblance to the dole-outs for the poor in India. "For the poor" is the kicker: by far the most economically appealing aspect of the basic income is that it's provided to everyone. If it's only provided to a particular type of person, that offers opportunities for corruption, administrative costs, and, most importantly, a very sharp disincentive against improving yourself and working harder, sometimes amounting to implicit marginal tax rates that are higher than 100%.

Another aspect is simplicity of administration. Providing some restrictions is a bit paternalistic, though I wouldn't dismiss it out of hand: for me the biggest issue would be how you can implement that with a minimum of cost, administrative overhead, and opportunities for corruption. And there's a bunch of areas that'd result in vindictive political debate. Sure, slot machines and vodka might be things we'd agree to restrict. But liberal arts MA programs? For-profit colleges? MLM schemes? Online class certificates via Coursera? Internet connectivity? Reddit gold? Gym memberships?

If you doubt that this kind of item by item trench warfare is what would happen, just look at the furor in the USA over something as obviously {good,bad} as providing {cost-effective,immoral} birth control to the insured.

I have difficulty imagining a system where the government picks and chooses what's good and what's bad for people to use that's not rife with corruption, sclerotic from past decisions and bureaucratic rules, and easy to use for the actual citizen it's intended to enable. The value recovered from preventing "bad spending" would almost certainly be outweighed by the cost of policing the billions of purchases that happen every day.

[gautambay]

Valid points on the complexity and the ensuing corruption.

I suspect that as real-time data-gathering becomes cheaper and more prevalent, the costs of policing will become trivial. That's certainly some years away though.

[ef4]

Ah, the classic paternalistic argument. It's deeply appealing to many people's preconceptions. But a growing body of experimental results call it into question.

When you actually conduct the experiment -- a randomized controlled trial where you give some poor people cash and others in-kind services, the cash group outperforms.

[matthewmacleod]

I'd be interested to see any of the research on this, if you have references. I suspect that in practice it's exceptionally hard to draw realistic conclusions from any such research, simply due to the confounding factor of "the wider social structure of the country".

[budu3]

NPR had a brilliant episode where they discussed an experiment where money was given to a control group of people on Kenya. http://www.npr.org/blogs/money/2013/11/08/243967328/episode-...

[timr]

For those asking, here are some links that will start you down the path to reading all about said research:

http://www.npr.org/blogs/money/2013/10/25/240590433/what-hap...

http://freakonomics.com/2013/06/04/should-we-all-just-give-c...

http://freakonomics.com/2013/09/26/would-a-big-bucket-of-cas...

http://freakonomics.com/2013/11/27/fighting-poverty-with-act...

http://poverty-action.org/project/0522

I'm glad I could help Google That For You.

[ef4]

Thank you for responding before I could and saving me the link gathering effort.

[kevinskii]

You made a very specific claim:

When you actually conduct the experiment -- a randomized controlled trial where you give some poor people cash and others in-kind services, the cash group outperforms.

None of the above links appear to support it. Please let me know if I'm mistaken, otherwise please do provide a relevant citation. Like many others here, I'm genuinely interested in learning about such a study.

[ef4]

http://econweb.tamu.edu/common/files/workshops/PERC%20Applie...

http://www.sciencedirect.com/science/article/pii/S0304387813...

[gautambay]

Very interesting (and certainly plausible)! Could you link to any of the experiments?

[tg3]

Here is an article giving high level overview of a few of the experiments: https://decorrespondent.nl/541/why-we-should-give-free-money...

[callmeed]

Sources on that?

[mwilliamson]

This article has a few examples of basic income experiments, with encouraging results. For instance, when the town of Dauphin had basic income implemented, hospital visits went down by 8.5%, which suggests real benefit rather than just frivolous spending.

https://decorrespondent.nl/541/why-we-should-give-free-money...

[VLM]

"you run the risk that the receivers spend it on shiny objects"

The problem is, what is a shiny object?

For me it might be going to grad school without a care in the world how I'll feed my kids.

For another it might be a car. Well, that's OK, car sales are imploding on a decade or so scale.

For another, housing. Anytime housing goes up thats trumpeted as an inherent good. It isn't, of course. But no one will say that in public.

Usually "wasted money" is just whatever someone doesn't personally like, its not actually bad. The problem with central planning, including of what everyone will have to invest in, is lack of flexibility.

[ThomPete]

We have that in Denmark and it holds it's own problems.

Personally I believe that a UBI is the way forward for the very simple fact that it always pay off to work and it will remove a huge control system and free those people to do better things with their lives than controlling other people.

[ahoy]

The counter to that is that I understand what services and goods are essential to me better than the government does (or anyone that isn't me, for that matter). If the goal is to do the most good with the least waste, basic income is probably better than a hodgepodge of universal services.

That said, I'm all for either or a combination of approaches. Anything to catch the US up with the rest of the developed world socially.

[marcosdumay]

That. I think a combination is the way to go, for no other reason than the fact that some desirable services have huge scale gains (transportation), and some services have huge positive externalities (health). It would be unwise not to incentive people to use those.

[enjo]

There are a couple ways to view this. By covering "essential services" you really are just guaranteeing a lot of inflation in those sectors (they are now on a fixed minimum income as a group). Some would argue that many of the same cost run-ups we've seen in university education (with government loans and other programs) will affect those essential service sectors in the same way.

One of the benefits of a basic income is that it serves as a really effective wealth redistribution program. It is partly a social safety net, but it's also something that can potentially give the economy as a whole a boost thanks to a lot of spending on the bottom (as opposed to income hoarding at the top).

I'm not sure I agree with those positions. I think I lack enough knowledge of economics to form a good opinion. I have definitely seen both of those arguments made in support of a simple basic income, however.

[rmc]

i prefer universal essential services (healthcare, education, etc.) over a guaranteed basic income.

What about countries in Europe that have that, and yet aren't doing great?