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.
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.