There's this wide belief that the plebescite will emergently produce great cultural works if they're freed from labour.
We already have effective UBI for the non-working classes in many countries. I can assure you that the recipients produce little of worth.
What is this referring to? Pensioners?
What is this "effective UBI" that you're talking about? Pensions? That isn't UBI.
This is pure BS, how would you weigh the cultural value of one thing versus another. Not everyone's cultural has an event in the Kennedy Center with tuxedo clad morons attending.
If everyone gets 1000$ extra, why wouldn't rent increase by close to 1000$. If you're not willing to pay it, someone will. I don't understand how giving all of us X amount of dollars would help. The number of goods are the same, they would become more expensive through inflation.
- there's competition, and so if it's possible to rent for less than 1000-eps and still profit, someone will
- there's no competition, which is a cartel, the kind of thing that civilized societies ought to frown upon
But then if people are creating art or working on their theater play or whatever, they'll want other people to show it too. I don't see cities existing only because of jobs.
I live in a village of roughly 5k people. The nearest city is 45 minutes' drive away. We have both a police station and a hospital.
prices are dependent on demand/supply rather than how much money people have.
It might increase rental prices, but the people that are reliant on UBI tend to be on some sort of rent control mechanism.
The biggest hurdle though is that people getting jealous of "money for nothing" despite interest being literally that.
That's not the full story of how the economics of demand work.
Demand increases as the money supply increases, but supply remains constant. This is inflation. More dollars chasing the same basket of goods.
Another way to look at it is as the money supply increases, the cost of money and the cost to borrow decreases. This leads to an increased desire to spend. It's an aggregate demand increase across businesses and consumers.
We recently saw the impact of this when the money supply was increased during Covid. It led to one of the largest jumps in inflation in our lifetimes.
I'm going to say something radical here, so do hear me out. any bank that loans money, is increasing the money supply. the more banks lend, the more money is printed. There is no fixed supply of virtual money. We don't really know how much actual dollars there are out there. (ignoring eurodollars)
Banks profits are literally because they are printing money. The very act of loaning out means that the 1 dollar bill you deposited with become 1.8, as its loaned out again to someone else, who then repays it, with interest.
<<end radicalism>>
Sure we had QE, we had covid cash, but the problem with using covid as an example of "giving money to everyone causes inflation" is that its difficult to distinguish from supply chain, tariffs, stimulus and $other.
the other problem is that stimulus was given to companies as well.
but the argument about not increasing the money supply is difficult to argue unless you are a bank, because that's their job, not the government's.
so, the point is, the economics of demand is an approximate model, rather than a formula. Its based on the collective perceived value of a good or service, rather than a strict supply/demand. sure its a close approximation, but not an accurate one.
Furthermore we still don't know how people will react to UBI once they feel it is universal and permanent. If you're busting your ass to take home $1500 a month today, and then you get $1500 a month UBI, will you keep working just as much and take home $3000 a month, will you cut down on work and aim for $2200 a month, or will you keep living on $1500 a month and just chill all day. Depending on what choices people make, most people might not end up with that much more money.
When it comes to a necessity like shelter, it doesn’t follow supply/demand curves all the time.
Which is it? You can't have it both ways. The right answer is that if you print new money prices go up. If UBI is funded by taxes it's not a UBI (some people will end up giving back more in taxes than they "receive" in UBI, so it's net negative for them). If it's funded by borrowing it's not sustainable. If it's funded by money printing then prices will rise and the effect is eliminated.
> the people that are reliant on UBI tend to be on some sort of rent control mechanism
The argument for UBI is it lets you get rid of other means tested welfare systems. If you're going to introduce a category of people who really need UBI vs other people who don't really need it, and have special rules for the former, it's just a rebranded welfare system and those already exist.
Until that utopia comes around, I don't see any way to fund UBI, as you say.
AI doesn't change anything, no more than the internal combustion engine or computers did. There will still be plenty of jobs. AI has been around a few years now and hardly even impacted the job market! The effect will be like computers themselves, an uplift in the general welfare but give it 50 years and economists will be asking "where was the AI productivity boost?" just like they do with computers today.
What you find with UBI discussions is that the rationale for why it's going to be necessary constantly changes, and is always based on very dubious suppositions and extrapolations. UBI seems to be just a more respectable sounding version of /r/antiwork, when you boil it down.
- I might live with a relative instead of paying $1000 extra, and can now afford the car to get to and from my job instead of living with them without a job or deepending on them for a ride.
- I might put that into a mortgage payment instead of rent. UBI if done correctly is always there so it's something a bank could count on as a reliable asset.
- "The number of goods are the same, they would become more expensive through inflation" - If there is more money to buy goods, people will find a way to produce more goods, if allowed. If people aren't producing more goods then your problem is there - transportation to markets could be an issue.
But I don’t think we’re there yet. We do have a lot of industries that rely on shit jobs that people would rather not do. If we, IMHO prematurely, try to institute a UBI now we’d be in for a world of pain along the way as the prices of basic services skyrocket without robots being ready to step in.
But, that’s not where we are headed.
Instead, automation will make money irrelevant in the “we don’t need to make money because money ultimately only can be used to pay wages, and nothing else” way.
Since automation means you don’t pay wages anymore, you only need natural resources and energy.
When corporations no longer see (external) money as useful, but only as a way to apportion resources internally to stakeholders, that makes everyone outside of that system into ants.
It’s grey goo, just on a macroscopic scale.
If the "basic pod" is supposed to be something more durable, probably the first step would have to be building enough homeless shelters for all the UBI recipients without another source of income.
Don't you also need food?
we're quickly getting closer to that stage with the promises of AI-increased productivity; and yet, there is not the faintest signal from those building and profiting from AI that the fruits of the increased productivity will be shared; quite to the contrary it will be captured almost entirely by shareholders -- why are investors pouring hundreds of $B into AI otherwise?
tax_rate * income - ubi
to the government. Tax rate has to go up for UBI to be revenue neutral. So, it is not inflationary. It just provides safety net for low income people.
Note that this formula would greatly simplify the tax code (especially if income included capital gains and maybe excluded donations), and is also actually progressive (your effective tax rate increases monotonically with income), unlike the current US system.
Everyone on this forum with hundreds of thousands to millions of dollars in the bank will just stop working. Who pays for the UBI?
It just will not work, there is no path forward where it can.
Why would UBI stop the category from working? From my personal perspective - I am an independent, make good money, have savings and work on my own terms and schedule. I just can't imagine stopping doing what I do and loose the income and freedom it gives me for some meager $1000 or so a month.
I wish this forum had a !remindme, it will not work. Everyone knows it will not work. It really is a fun idea and I wish it would work. It will not work.
You could be right, but I'd like more than a bald statement that "it is so" before I believe you...
People that use ubi to quit their jobs mostly end up investing their time in things like additional education, higher paying (per hour) part time positions or entrepreneurship.
except for all the trials already done that show that it _does_ work
I don't agree with dgfitz's dogmatic "it will not work". But I don't agree with your claim, either. There has never been a city- or state-wide trial, let alone a national one, that increased taxes to pay for it. So under actual conditions, no, we don't have evidence that it works.
Raising taxes is only one mechanism. There's also reduced spending (the defense budget is now approaching $1T).
Its seems there are two opposite arguments taking place: 1) AI will eventually displace a very large number of jobs and there are no ideas emerging as to what new industries will appear to provide jobs for the displaced (and that is because the new industry would have to be something that AI is incapable of doing cost-effectively, and we only need so many barbers), and 2) people who are capable of working but do not work should not be receiving compensation from the government.
I honestly don't know if UBI is the solution (I prefer means-tested BI rather than UBI but I concede that means-tested is problematic). But there had better be a solution, because 1) above is inevitable (probably not in the next 5 years, but in the next 25 years, certainly).
We don't need trials to know if UBI can work or not. Basic economic literacy is all you need. It's like saying there's a bunch of trials that show 2+2=5. No review of the trials is required, all the statement means is the trials were incorrectly designed/run.
The concept of UBI boils down to "something for nothing", which is incoherent, practically a violation of the laws of physics. Money is not wealth. You cannot simply pass a law that magics wealth into existence. The only way to give everyone a minimum standard of wealth is via the already heavily used strategy of taking wealth away from other people who are creating it, and then hoping it doesn't bum them out so much they stop working.
One big problem with stock based compensation is that it pushes income into a big windfall year. The top marginal tax rate in the US is something like 52%. So, someone that would pay 25-30% effective tax in a fictional average year ends up paying 52% on multiple years worth of income.
Also, you can’t use the standard deduction to make your taxes negative. Assuming the average effective federal tax rate is 25%, to convert the standard deduction to UBI, it’d be reduced from $22,500 to $5600, but applied to the total tax owed, leading to the IRS paying you if you paid less than $5600 in taxes pre-deduction.
I think $5600 is too low. It should be enough to live off of. The 25th percentile household income in the US is $40000. $10,000 UBI per person seems more reasonable (probably still too low) to me.
Just for the sake of precise communication: it’s tax evasion.
I don't remember exact details and may miss something, but the work is very short so please check it. In short, he described, I believe, a real situation when a major of people in a town got extra extra money because a toll on the bridge to the fabric was eliminated. But in a short time the town's rental cost grew up by exactly this amount.
FWIW we have had a form of UBI in the USA for decades: the earned income tax credit, which for many people amounts to a significant subsidy over and above their tax burden. Nobody stopped working, and prices didn’t go up.
How is a tax credit that you only get if you're working, and scales up depending on how much you earn (to an extent) an "universal" basic income?
>Nobody stopped working, and prices didn’t go up.
Nobody stopped working because you had to work to get the tax credit.
The most common criticism of UBI is that landlords will raise their prices to capture all of the gains. I disagree, I believe that a properly implemented UBI will lower rent prices.
Rent rises quickly because both supply and demand are inelastic and renters are relatively price-insensitive. Any market with relatively fixed supply and demand experiences large and quick price changes. The most prominent example is oil -- a small change in supply causes a large change in price because demand is inelastic; people don't stop buying gas just because the price went up. But oil experiences quick price changes in both directions. Rent only seems to increase.
Housing is a necessity. If there are more families needing housing than there are houses, families will pay as much as they are able to ensure they're not the ones without housing. So when supply exceeds demand, price rises rapidly. The converse is not true. Most landlords are not as desparate to rent their dwellings. When supply exceeds demand they have the ability to say no, they can and do choose to leave the dwelling empty rather than accept a lower price.
But prices do eventually come down when supply exceeds demand. For example, the rent for 1 bedroom apartments in Toronto is down 10% in the last 12 months.
If implemented poorly UBI could definitely be inflationary. If UBI is paid for by money printing rather than through taxes it will be inflationary. But if it doesn't increase the money supply and is constant across the country UBI will lower rents rather than raising them.
Why? Becuase it makes demand elastic. Right now people are moving to the expensive cities because that's where the jobs are. They don't really have a choice. UBI gives them a choice. You can move to San Francisco and work 2 jobs to be able to afford rent, or you can move to West Virginia and pay your rent out of UBI and not need a job. Some people are going to do that. Not many, but likely enough.
There's a saying. "100 supply, 101 demand; price goes up. 100 supply, 99 demand, price goes down". Small changes on the margin can have a large impact on prices.
Keep in mind that any UBI that is fully tax supported is going to necessarily be very miserly. US average income if $40K. So if you set tax rates at 100% and spent every penny on UBI then UBI could be $40K. Obviously neither assumption is going to be true. Tax rates will have to be significantly less than 100%, and we'll spend money on our military, etc. A UBI of more than $1000/month seems highly unlikely without money printing. And there are basically only three ways you can live on $1000/month: Move to a low cost of living region like West Virgina, live on the street or live in highly shared accomodation. All three of these scenarios reduce housing demand in expensive cities rather than lower it.
Probably not the industrious and productive kind I'm sure.
If you work for free, your income is zero and you won't pay taxes. You'll still get UBI though.
That being said, I note that there is a proliferation around military bases of auto dealers who happen to accept down payments of the exact signing bonuses of new recruits.
UBI would have an inflationary effect, but it wouldn't be that every merchant would suddenly demand all of the UBI surplus because there are scores to hundreds of businesses that a given person buys from each month and they can't all get the full UBI increment, for at least two reasons: 1. They are jointly going to consume the UBI amount, not individually and 2. Many people would be paying higher taxes (in order to pay net UBI to people paying taxes&transfers which are zero or net-negative once UBI is included) and many of those people would see a net decrease in spendable money versus today.
Note that UBI is effectively "everyone gets extra income" for the poorest parts of society, so things only poor people buy will get some inflationary effect.
It's a fantastic game theory playground.
Some jobs are just shit, and people will quit them as soon as they can. UBI would put some companies out of existence.
But as others say, at the end of the day if everyone has an extra $1000 a month, there will be groups such as landlords trying to jack up prices.
To counter other commenters on this issue - we do have price controls on things such as milk, bread etc and it does 'work' to some degree. In the landlords example above - a smart gov would implement an algorithm for 'greed' and fine/tax offenders and put that money into the UBI cash reserves.
I think UBI as a real possibility needs to be taken seriously. The level of AI has accelerated in such a short timeframe that (imo) we're starting to see the knock on effects into society. This is just in tech for now - thousands applicants for positions, and no one really needing to hire juniors as Claude et al easily replace the tasks they do.
Once other industries realize that they can replace a lot of tasks with ai, we'll see a gradual shortage of jobs for unskilled admin jobs (not manual labour... Yet)
There's a lot of shouting about AGI but the current LLM landscape effects are slowly happening around us right now. UBI studies should be taken more seriously and at a larger scale.
My understanding, based in the US, is the commodity price controls set a minimum price to protect the farmers and not the consumers.
To counter your point, look no further than tuition prices at US universities. In the '90s (when I went to university) they were fairly heavily subsidized then the state governments stepped back and federal loans and grants took over. Universities, seeing this new influx of capital, promptly raised their prices well over inflationary rates to capture more and more of these federal funds leading to what we have today. I, admittedly, took the cheap route of community college and state university (along with the GI Bill) and only had something like $6k in student loan debt by the time I got my bachelors in '97 while today's community colleges have higher tuition than what I was paying at university.
Though... I don't doubt AI is going to cause some serious problems when it starts replacing people at high rates across the board.
wasn't this simply a substitution of income sources (from state government grants to the federal government student loans) rather than an actual increase in capital?
Especially as the world gets more complicated: giving people money without any sort of structure or guidance is a recipe for malaise and lack of purpose.
The whole article talks about this aspect. What was your take on the points the article raised with respect to this?
It has nothing to do with laziness, as the (unnecessarily hostile article argues) but is simply because the world is getting more complex, and an inflationary-prone method like UBI is inferior to actually investing in societal institutions.
Many UBI proponents never seem to ever discuss public goods, but think that the ideal solution is to just make everything rest on the individual. I don’t think that will work, and to me it obviously didn’t work during COVID, which was a real world application of UBI.
UBI sneaks around the problem by giving the rich the same exact benefit as the poor.
I don’t think a society with poor public services and UBI is a desirable one. It sounds pretty dystopian to me, frankly, especially if people become dependent on the payments.
Most everyone is already dependent on the federal govt anyway. Barely a fraction of the country could survive a year without some kind of federal aid or social services.
But the US isn't ready for that either.
Once CBDCs become a thing, citizens should have the ability to have direct credit relationships with the central bank.
We can then transition from a cash based monetary system to an accrual based one (similar to how businesses do their accounting.)
Public benefits, then, rather than being given out like it is currently (e.g. you get $200 for food stamps) will instead be based on allowing you to draw credit.
So, the eGovCreditCard would for example always allow any citizen to draw $200 per month for food expenses.
Potentially, if we want to do more generous policies a la "UBI," we could add e.g. $1000 always being allowed per month for rent.
Health care similarly, instead of if the archaic and very inefficient system we have now where those on the dole often go to emergency rooms, money is funneled through "insurance", etc... would allow you to draw money for regular doctor care. Maybe at a set maxiumim limit per citizen, e.g. $1M.
Will that come with the healthy interest rate one could never hope to repay?
For example, friends lend each other money without usury simply because the "interest" comes from helping a friend.
Similarly, the central bank which is an agent of the government fulfills its interest by having healthy citizens. So there probably wouldn't be usury.
Instead, earnings from the citizen would be garnished if they had debt.
Getting rid of cash also requires proper paper work and identification so you can sign up for the CBDC wallet. In that case you're excluding the very people from the system who need it the most.
Also it would make welfare more efficient, as you can garnish earnings from citizens to repay back the debt, whereas now it's just a gift.
Even if we agree on facts, we don’t agree on basic morality. No amount of well conducted studies can overcome that gap.
That is a permanent payment to live on to a section of the population, except that section is divided by age not location. And the results from millions and millions of data points across the globe are crystal clear - the people stop working and the dependency ratio goes up.
To the extent that Denmark has just increased the age to 70, ie reduced the size of the section of the population entitled to the payment. They wouldn't have needed to do that if 'people continued to work'.
Of course a payment to a small section of a fixed currency area will work. It's paid for by all the other people from that fixed currency area not getting the payment. As will a small payment that is not enough to live on - which ends up as a subsidy to private sector employers and results in wage compression towards the minimum wage.
The fun starts when you try to give a living payment to all the people within a fixed currency area. And that has yet to be trialed anywhere.
Premature extrapolation is a cruel affliction.
The people on the trial - whether that’s a random sample or the population of a geographical area - all get an economic privilege over the people who aren’t receiving the UBI, and therefore can buy more goods and services.
But when you expand this to the whole country (which is producing the same amount of goods and services) then prices naturally increase to match the same disposable income that the entire population now has, due to increased demand.
Now you could say that it’s not actually giving everyone the same, increased, amount of money since it would require huge tax raises on the wealthy to afford it.
But when a poor family gets that extra money they’ll spend it on things that a poor family would buy - a new low-tier car, food, a better air conditioner. And a rich family doesn’t just buy the same stuff as a poor one but in greater quantity - that painting is a million dollars and it’s not like it’s going to feed anyone or get them anywhere.
So the price of goods for the average person will increase, because despite redistribution there will be basically the same supply with more demand.
The US already spend $1.19 trillion a year on welfare programs, or about $4,600 per adult in the country. Much of that is wasted due to the massive bureaucracy required for means testing aid (determining rules for eligibility, having people to administer and test for eligibility, enforcing “proper use”, etc.). UBI could just be a check after you file your taxes every year.
Come to think of it, prices often go down with demand, since so many costs are fixed costs that businesses have to whether they have high or low demand. A restaurant has to pay their lease and their staff whether the place is packed on a Saturday or dead on a Tuesday afternoon. People eating out more would better utilize the space and bring per customer costs down. Same with basically all service industries. For goods, most companies have equipment they have to have for manufacturing but aren’t 100% utilized, and increased demand would allow them to optimize closer to 100%. And if they reach 100% and would need to buy more equipment and raise costs, well then there are probably other companies in that sector that aren’t yet at 100% and can still sell at a lower cost.
I.e. if we took the money (or a portion of it) that would be going to UBI and instead used it to directly buy the goods, for distribution, at scale.
Universal tertiary education (for the countries that don't have it), universal healthcare (for the US), universal food and shelter entitlements, etc.
I'll grant that some amount of direct income would be best, because of the flexibility it affords, but UBI in capitalist societies is a slippery slope for the reasons you mentioned (especially market price changes).
Why not instead focus on directly driving costs for basic goods so low (via volume) that we can make them effectively free?
I grew up near a reservation, and I can tell you --- it's not good. I don't think many people can point out reservations that are doing well except for casino money.
Free government money, I believe, has systematically destroyed the people over the generations.
(These days wealth is not necessarily created by extracting value from physical resources, but that is a very recent development.)
> Image via Pilotprojekt. Study period: March 2021 to November 2024.
> This is likely because women are more likely to experience poverty and economic dependence arising from the gender pay gap, workplace gender bias, as well as the disproportionate burden of domestic and care labour.
These are false. As the author mentions earlier in the article, these are young adult Germans, working for something close to minimum wage, specifically selected to not have children. They are probably not up against any of these issues.
The reason I am frustrated by these dogmatic answers is because this new sexist dogma prevents any curiosity around the real cause of these differences.
For example, perhaps this result discloses a more fundamental reality about female experience that could be analyzed. Or perhaps the population was skewed toward women who were dependent on partner income because they make up a larger part of that income demographic. But it won’t be explored because it is instantly and inaccurately explained away as systemic sexism. It is intellectually lazy.
My own personal concern would be what impact UBI would have on existing social security that everyone in the US has spent their entire adult life paying into. Social Security is neither a benefit nor a welfare program. It is a paid for security blanket that all working people in the USA have paid into with no option to opt out. Would social security go away and would I get all my money back?
[1] - https://en.wikipedia.org/wiki/Universal_basic_income_by_coun...
Honestly, the thin skin on some of the folks here is in a class of it's own.
prhn•6h ago
cscheid•6h ago