From my perspective, the most important advantage of UBI would be providing safety net for people working on their own projects.
Imagine that I have an idea that with probability 50% can make me million dollars, but with probability 50% is wrong and won’t make anything. And it would take three years of work to find out which case this is. By the expected-outcome perspective, I should go for it. But in real life, money has logarithmic utility, and the 50% risk of losing the roof above my head (and above my child’s head) is just unacceptable.
In an UBI world, I would take the risk, with the worst case of losing three years of my time (but still doing something that I enjoyed), and on average I would profit greatly (and so would the society taxing me).
It is difficult to not be risk averse when not having regular income has harsh consequences.
Good point. The conventional solution to your issue is to sell equity in your idea so you can draw a salary when working on it. But this is of course not always possible, chiefly due to informational imperfections. UBI largely solves this issue by relying on the government’s ability to raise money fairly from a broad tax base—effectively, this gives UBI recipients a tiny bit of “equity” in everyone else’s income, so they can subsist tolerably well despite their possibly having low productivity or income-earning potential of their own.
Yes, solutions exist, but they sometimes have their own problems, which again are solvable, but that is an extra inconvenience (and each extra inconvenience reduced the probability of doing the project).
For example, if this is my first project of such kind, then I have no references from the previous projects. (On the other hand, if I had such previous projects, then either they succeeded to make millions, in which case I don’t need other people’s money to survive anymore, or they failed, in which case that would be a bad reference.)
Or if I say “I have a plan X, I just need some money to keep working on it for three years”, it makes sense for the person with money to consider giving the same money to someone else to do X. I am not an irreplaceable person and I probably don’t have any super deep secrets—I just noticed something and believed I may have a good solution, but of course there are tons of people on this planet who could deliver the same or better solution as long as someone tells them about the idea.
I guess the underlying idea is that I will have to spend extra resources on signalling to people that investing in me to do the project is the right choice.
UBI has a lot of interesting arguments for it. However, I have a concern about UBI in practice that I have not seen addressed. It seems likely to me that politicians will adjust the UBI amount erratically, leading to disruptions. Today, this happens with minimum wage laws. Often the minimum wage is not raised for long stretches of time and then in other states the minimum wage is increased to levels that are probably not economically justifiable. Likewise, what happens if the UBI is not increased adequately and suddenly a large pool of people find themselves unable to meet their basic needs on it? Or if the UBI is increased too much and workers drop out of the labor market en masse as the UBI now provides more than their basic needs?
The easiest comparison is probably not with minimum wages but with welfare relief e.g. food stamps, which is not changed all that often. Anyway, our first experiments with UBI will probably see more frequent changes as we figure out whether the system can work in the long term, but hopefully we’ll end up just indexing it to the cost of basic necessities, adjusted for some measure of unskilled wages—after all, you don’t need UBI if The Donald manages to bring all manufacturing jobs back to America, and factory work becomes as plentiful and high-paying as in the 1950s and 1960s!
″ improved incentives are where basic income really shines. Studies of motivation reveal that rewarding activities with money is a good motivator for mechanistic work but a poor motivator for creative work. Combine that with the fact that creative work is to be what’s left after most mechanistic work is handed off to machines, and we’re looking at a future where increasingly the work that’s left for humans is not best motivated extrinsically with money, but intrinsically out of the pursuit of more important goals. It’s the difference between doing meaningless work for money, and using money to do meaningful work.
Basic income thus enables the future of work, and even recognizes all the unpaid intrinsically motivated work currently going on that could be amplified, for example in the form of the $700 billion in unpaid work performed by informal caregivers in the US every year, and all the work in the free/open source software movement (FOSSM) that’s absolutely integral to the internet.
There is also another way basic income could affect work incentives that is rarely mentioned and somewhat more theoretical. UBI has the potential to better match workers to jobs, dramatically increase engagement, and even transform jobs themselves through the power UBI provides to refuse them.”
A philosopher’s take on Global Basic Income
“Land Value Taxation or LVT, also known as site or location value taxation. This tax is a levy on the unimproved value of a land site — a levy that, unlike property taxes, disregards the value of buildings, personal property and other improvements to that site.”
“Someone wishing to privatise one of those sites — to acquire and maintain exclusive private ownership of it — incurs a moral duty (which transfers to their successors) to compensate everyone else for their loss of that liberty. That is, in order to rightfully exclude others from sites which they might otherwise have used, you must compensate them.”
Study: a universal basic income would grow the economy
The Roosevelt-Levy model, by contrast, finds that any negative effect due to the deficit would be swamped by the positive economic impacts of increased demand.
The Roosevelt-Levy model also makes two other significant assumptions:
A basic income does not discourage work at all
Households don’t respond to changes in their tax burden
“Our fear that people will quit their jobs en masse if provided with cash for free is false and misguided,”
Harvard economist Stefanie Stantcheva have argued that very high marginal tax rates (the top rate on wages was 91 percent for most of the 1950s) discourage the rich from making very large salaries. In particular, it prevented them from bargaining with their employers to divert money from shareholders or lower-ranked staffers into higher executive compensation.
“How many jobs really require college?”
“When more people are pushed into college, it rarely expands the supply of jobs. Rather, wages for that profession get driven down and the marginal students end up unable to break into the field. Being a lawyer was once an attractive career path. But far too many students went to law school, so for all but the top students wages cratered and jobs became scarce. Similarly, too many students went to grad school, and the wages and job prospects for young post-grads became dire.
Across the board, the marginal college graduate increasingly find their degrees unwanted and useless. We also see this in other countries – such as Egypt – where the push to educate young adults far outstripped the economy’s ability to provide professional jobs.”
spreadsheet available in article, but just one guy’s opinion in here.
some older arguments
“Earlier in U.S. history we saw the rise of an enlightened capitalism that supported the growth of an empowered union movement, in part because some capitalists reasoned that it would reduce the chances of workers turning to socialism,”
“Overall, the inexorable shift from simple digitization (the Third Industrial Revolution) to innovation based on combinations of technologies (the Fourth Industrial Revolution)”
“On the whole, there are four main effects that the Fourth Industrial Revolution has on business—on customer expectations, on product enhancement, on collaborative innovation, and on organizational forms.”
“Silicon Valley is right—our jobs are already disappearing”
“Actually, automation has already eliminated about four million manufacturing jobs in the US since 2000. And instead of finding new jobs, a lot of those people left the workforce and didn’t come back. The US labor force plummeted by about 10 million during the same period, down to levels not seen in decades. The labor participation rate is now at only 62.7%”
Great article overall. The biggest problem with it is actually the $1000/month figure at the beginning, which is rather on the higher side of a realistic BI. (A higher figure for the BI makes things a lot harder than they could be, both politically and in pure incentive terms!)
There is also some carrot and stick going on in UBI, that only the conspiracy folks, and Bitcoin people are talking about.
This article is actually by the Davos group (Bilderburg) , and as a controlling tool, it would be VERY effective at holding a population hostage.
You would have to have a new “biometric” ID, and a linked bank account, that could be “attached” to negative interest rates, bail ins, and/or frozen if an economic “crises” was declared.
Even more power to the Police State, they could attach your linked account for any reason they wanted, even claiming a civil forfeiture, and have a very powerful argument for why you should give them info on another person, or project.
Voting history would prob be attached to that ID, and might be a filter to cause you more investigative scrutiny.
Another way to track whether you “might” be using cash, as only criminals do that...
“So here’s a new idea: why not create new money at the bottom of the pyramid when people perform useful work in their communities? How about paying people for being producers, rather than paying them to be consumers?
That pot is cracked.
Equality never gets better without a systemic crisis.
″ civilization has come at the cost of glaring economic inequality since the Stone Age. The sole exception, in his account, is widespread violence – wars, pandemics, civil unrest; only violent shocks like these have substantially reduced inequality over the millennia.”