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A Universal Basic Income Stipend for Americans: Is It Time?

There are at least three general categories of arguments in favor of a Universal Basic Income (UBI), a basic income grant, or a negative income tax. Yes, I know, those three are not fully interchangeable. But the distinctions are less important for present purposes than the similarities.

One set of arguments is based on the idea that we’re paying them already, so let’s just give them the cash. P.J. O’Rourke famously made this claim (Weekly Standard, January 30, 2012) when he wrote:

The federal government has some 50 different “poverty programs.” Nearly half a trillion dollars is spent on them each year. That’s about $11,000 per man, woman, and child under the poverty line, enough to lift each and every one of them out of poverty. (U.S. Department of Health and Human Services 2011 poverty guideline for a family of three: $18,530.) We call them “poverty programs” for a reason. If ordinary people with down-to-earth common sense were spending that half trillion, we’d call them “modest prosperity programs.”

In other words, there should be no poor people in the United States. We are spending more on poverty programs than would be required to end poverty, but we’re just not giving the money to the right people. We give it instead to bureaucrats whose job it is to pester and harass welfare beneficiaries, and generally make miserable poor people even more miserable without in any way making them less poor.

A second set of arguments follows the line taken by philosopher Matt Zwolinski. Zwolinski wrote, in “Property Rights, Coercion, and the Welfare State: The Libertarian Case for a Basic Income for All” (Independent Review, Spring 2015), that if we were to take the Lockean proviso seriously, we might think of things in terms of a Coasian analysis: A system with property rights and market processes produces much more prosperity than state ownership or centrally planned price systems. But the prosperity is not equally shared; the winners don’t deserve all their gains, and the losers, who played in good faith and did nothing wrong, ended up in shrinking industries. We’re better off allowing that dynamism, but if creative destruction is as productive as its proponents claim, then the “winners” should be able to compensate the (relative) “losers” and still come out ahead.

The Kaldor-Hicks “compensation” approach would simply note that market systems produce a net gain. But a fairer, more ethically defensible Coasian bargaining approach[1] would require that the compensation actually be made. If that part of the argument were accepted, it would be easy to conclude that the best and most efficient way to create a universal social safety net, one that would not encourage partiality and rent-seeking, would be a truly universal UBI.

Of course, as with the first set of arguments, the UBI would replace all the other welfare and social insurance programs (except for health care). That would mean dismantling minimum wage laws, Social Security, food stamps, and housing subsidies.

These two proposals, the first based on political expedience and the second on an ethical concern for making “potential Pareto” an actual Pareto improvement, would each require that the existing programs be replaced by the UBI. There is a third proposal out there, whose proponents would favor the imposition of a UBI while continuing existing programs. There might be consolidation and fiddling at the margins. But the more “radical” version is what Philippe Van Parijs and Yannick Vanderborght lay out in Basic Income: A Radical Proposal for a Free Society and a Sane Economy. This book makes UBI the centerpiece of a rethinking of the entire system of income distribution.

The Problem of Contingency

One problem with the existing panoply of welfare and anti-poverty programs is their contingency. The reason may not be obvious at first; after all, shouldn’t we only use public assistance to end poverty for people who are actually poor? The difficulty comes at precisely the point where what economists call the “price effect” kicks in.

A person with zero income, living in subsidized housing and receiving subsidies for child care, food, and other things, might want to live a better life. Suppose that person is a woman, with several children. Two ways this woman might improve her financial situation would be to marry a person who has a job or to get a job herself. The problem is that if she did either of these things, she would lose most or even all of her benefits. It has been variously estimated that, for the poorest Americans, the marginal tax rate for the first $10,000 or so in income is 100 percent or more. That means that if our subject earns $10,000, she loses $12,000 or more in benefits. This has been called the “benefits cliff,” and scholars have argued that this aspect of anti-poverty policy perversely locks in poverty.

There is much to be said for taking away the contingency. Everyone would be receiving a UBI (that “U” meaning universal). Even people who didn’t need the stipend and didn’t deserve it by any normal set of considerations would receive it. This would take away the “price effect.” On the other hand, doing this would bring into play what economists call an “income effect.” That is, if people have a taste for leisure, and they are given (say) $1,500 per month with no strings attached, some people who now work in jobs will simply stay home and play video games. Parijs and Vanderborght forthrightly acknowledge this objection, which they call the “free riding” problem. Ethically, the concern is that it would be unfair, and immoral, for able-bodied persons to live at the expense of others when the means of that living would be obtained coercively without the consent of those taxed to provide the benefit.

The authors give two responses to the “free rider” objection.

The first is that it can’t be right that “everyone should have to work,” given that the wealthy often take leisure, and in some cases do not work at all. This is an odd response, tacitly conflating the stricture that one “shouldn’t live at the expense of others” with the idea that “everyone has to work.” The wealthy do not work, perhaps, but neither do they live at the expense of anyone except themselves. A UBI would take money from some and give it to others; I don’t think this response is as powerful as the authors seem to think.

Their second response notes that the amount of labor in the overall economy devoted to the production of basic needs—food, shelter, and clothing—has sharply declined as the economy has become more productive and the division of labor and specialization have proceeded apace. Consequently, acting on the proposition that citizens are entitled to the fulfillment of their basic needs would place a much smaller drag on the economy than it would have in earlier times.

Maybe. But then again, the increase in productivity in all the other things we make and consume is only a benefit if people continue to find new and better ways to make those things. Absolving free riders from the obligation to make some contribution to society is something quite different, because it reduces the amount and diversity of products and services available for others to consume.

“Free Riders” Might Still be Contributors

Still, this response does have some merit, because it is likely that even those who “free ride” (using the most derogatory framing) are disposed to contribute to the happiness of their neighbors and friends. Van Parijs and Vanderborght are saying that the activities of citizens need not be formally commodified, and exchanged in the money economy, to be of value to the community. Producing art or music, volunteering at the kids’ school, assisting in the running of a charity, or giving great dinner parties for groups of friends may not be production, but they aren’t nothing. Happiness counts.

I fully share their assumption in this regard. It is simply not true that most people, especially most poor people, are lazy and looking for ways to live dissolute lives. The problem with a minimum wage is it makes scarcer the jobs that the least experienced workers can fill, and employers can then exercise prejudice or impose abuse on workers who aren’t sure they can find another job. A UBI would improve the “outside option” of all citizens, putting them in a stronger bargaining position vis-à-vis employers. People will find jobs because they want to, not because they must. Lives of contribution and participation in communities of meaning are things humans have always sought. There is no reason to expect that most people can be bought off for $1,500 per month.

Basic Income considers a wide variety of arguments about the implications of a UBI, asking whether it is politically achievable, and also whether it is economically sustainable. The book is readable and, for the most part, quite fair-minded. But make no mistake: Van Parijs and Vanderborght advocate a UBI and are quite serious about it. This volume is an important part of a growing and useful discussion.

[1] Michael Munger, “Kaldor-Hicks Coercion, Coasian Bargaining, and the State,” in Coercion and Social Welfare in Public Finance: Economic and Political Dimensions, edited by Jorge Martinez-Vazquez and Stanley L. Winer (Cambridge University Press, 2014), pp. 117-135.

Reader Discussion

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on September 17, 2018 at 09:57:25 am

Yep, we have approximately $6 TRILLION spare cash around to distribute.

Easy, no problem.

Of course, eliminating the legions of Federal and State Welfare bureaucrats may very well be worth it.

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Guttenburgs Press and Brewery
on September 17, 2018 at 10:03:30 am

I wonder:

Is this what is meant by the Free Rider problem?

https://www.breitbart.com/big-government/2018/09/16/watch-looters-wilmington-carry-armloads-family-dollar-store/

And will UBI make this less or more likely - after all, under UBI one could conceivably come to believe that EVERYTHING is FREE!

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Guttenburgs Press and Brewery
on September 17, 2018 at 10:19:48 am

Mike Munger perfectly encapsulates the old adage that is Betteridge's law of headlines: "Any headline that ends in a question mark can be answered by the word no."

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Mad_Kalak
on September 17, 2018 at 12:02:34 pm

"[I] if we were to take the Lockean proviso seriously, we might think of things in terms of a Coasian analysis: A system with property rights and market processes produces much more prosperity than state ownership or centrally planned price systems. But the prosperity is not equally shared; the winners don’t deserve all their gains, and the losers, who played in good faith and did nothing wrong, ended up in shrinking industries. We’re better off allowing that dynamism, but if creative destruction is as productive as its proponents claim, then the “winners” should be able to compensate the (relative) “losers” and still come out ahead."

What is "the Lockean proviso"?

Locke founded his belief in real property rights on the premise that there exists ample land of equal quality for all--a perhaps plausible theory in an era of common, open-field farming, but seemed preposterous in the context of the Enclosure Movement sweeping the U.K. Thus, Locke's theories never found great support in Europe. But in the New World, with its apparent boundless supply of land for the taking, Locke found new adherents.

But what of those who, for whatever reasons, lack their own source of wealth? Locke embraced wealth distribution:

"§ 42. [W]e know that God hath not left one man so to the mercy of another, that he may starve him if he please: God, the Lord and father of all, has given no one of his children such a property in his particular portion of the things of this world, but that he has given his needy brother a right to the surplusage of his goods; so that it cannot justly be denied him, when his pressing wants call for it: and therefor no man could have a just power over the life of another by right of property in land or possessions; since it would always be a sin, in any man of estate, to let his brother perish for want to affording him relief out of his plenty. [C]harity gives every man a title to so much out of another man’s plenty as will keep him from extreme want, where he has no means to subsist otherwise: and a man can no more justly make use of another’s necessity to force him to become his vassal, by with-holding that relief God requires him to afford to the wants of his brother, than he that has more strength can seize upon a weaker, master him to his obedience, and with a dagger at this throat offer him death or slavery. "

John Locke, Two Treaties of Government (1689), Book I, Chapter IV., Of Adam’s title to sovereignty, by donation, Gen. i.28.

Locke's philosophy built upon the earlier philosophy of the Levelers:

"The Earth (which was made to be a Common Treasury of relief for all, both Beasts and Men) was hedged in to In-closures by the teachers and rulers, and the others were made Servants and Slaves: And that Earth that is within this Creation made a Common Store-house for all, is bought and sold, and kept in the hands of a few, whereby the great Creator is mightily dishonoured, as if he were a respector of persons, delighting in the comfortable Livelihoods of some, and rejoycing in the miserable povertie and straits of others. From the beginning it was not so…."

The True Levellers Standard Advanced: or, The State of Community Opened, and Presented to the Sons of Men (1649) (rebelling against the enclosure movement).

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nobody.really
on September 17, 2018 at 12:35:36 pm

If you use a UBI to replace the standard deduction, bottom low tax brackets, and assorted exemptions, along with welfare, you come pretty close to break even. I ran some rough numbers here: https://www.holisticpolitics.org/TaxReform/Prebate.php

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Carl Milsted
on September 17, 2018 at 13:05:01 pm

Absolving free riders from the obligation to make some contribution to society is something quite different, because it reduces the amount and diversity of products and services available for others to consume.

I find this a strong argument—if accurate. Yes, we would expect a Universal Basic Income would cause SOME people to spend fewer hours in the labor market. But would a Universal Basic Income result in a net loss of productivity? Hard to say.

First, as Munger observes, the fact that people spend less time in the paid labor market does not mean that they fail to act productively; it just means that they invest more time in things that the labor market does not reward. Historically society did not reward domestic services such as child-rearing and attending to the sick and elderly. Today the labor market DOES reward those activities—provided you provide services to OTHER people’s children, sick, or elderly relatives and are compensated via a paycheck. Why should we conclude that people providing those services to their own family members are suddenly not being productive?

Studies of the UBI in the 1970s revealed precisely this dynamic: Some people (mostly women—it was the 1970s after all) reduced their labor force participation, and instead invested more time in getting kids to doctors’ appointments, attending parent-teacher conferences, or attending to elderly parents and in-laws. Do we really think that their time would have been better spent as Walmart cashiers?

Second, even without a UBI, we observe a declining labor force participation rate. Given this dynamic, how much difference would we expect a UBI to generate?

Third, what accounts for the declining labor force participation rate? At least some of the dynamic may result from the declining need for labor. Given a number of changes in our economy—especially the increased labor supply due to women entering the labor force, the increased use of technology, immigration, and globalization—the world can produce more stuff with less (US) labor.

In short, I question the premise that excusing people from the paid labor force will result in less productive activity than in the past.

Fourth, a UBI would transfer wealth from the relatively wealthy to the relatively poor. That would presumably depress those things that wealthy people do with money, but stimulate those things that poor people do with money. In other words, this policy would destroy some jobs but create others—and I can’t say in the abstract which consequence would predominate, and which sectors of the labor force would benefit.

Finally, I would call attention to a Protestant Work Ethic bias. Yes, work CAN generate desirable results. But I sense many people value work—and hate leisure—for religious reasons: They simply value the idea of seeing other people working, and resent seeing other people at leisure. I believe in separating church and state. If we want to talk about productivity, let’s talk about productivity. But let’s use caution in treating work as a proxy for productivity. Many people want to make “work” a condition of receiving various kinds of government benefits, without regard to the productivity of the “work” required, or the real cost to the productive activity that recipients must forego in order to qualify for the benefits. This attitude has nothing to do with economics and everything to do with religion. We need to avoid building religious attitudes into public policy.

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nobody.really
on September 17, 2018 at 13:24:42 pm

Oh, one other dynamic of a UBI: entrepreneurship.

Where would we expect to find people with the talents to start a business--and where DO we find the people who start businesses? Don't know. As a guess, I'd expect to find entrepreneurial talents distributed randomly throughout the population. But I'd expect to find actual entrepreneurs appearing relatively high up the income ladder, because entrepreneurship benefits from being able to have time outside the paid labor market to invest in a new enterprise.

Now consider the growth of crowd-funded enterprises, or even micro-loans, as evidence of what economic transfers can do for those who would normally be locked out of the credit markets. A UBI might unlock untold entrepreneurial potential sitting within our population, simply waiting to be set free.

Again, the moral is that we have difficulty anticipating the net benefits and costs of a UBI.

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nobody.really
on September 17, 2018 at 13:37:23 pm

"...BLAH, BLAH, BLAH....everything to do with religion. "

Oh stifle yourself, Edith.

could it be something as what Lincoln observed that it is offensive and grates upon human sensibilities to observe that"you work and I eat" or more apropos of this UBI proposal, that "I work and you eat."

I would think that even a good practicing agnostic may feel some resentment towards those who would receive the fruits of his or her labors.

And, oh yeah, I am absotively certain that the level of entrepreneurship will reach previously unheard of levels when all those previously unemployed, either due to lack of talent, lack of will or even due to the vagaries of life are provided with a government stipend to do - well, to do JUST WHAT.
Oh yeah, to suddenly transform the,selves into modern day Edisons, Fords, Carnegie's, Mellon or Jobs.

My Gawd, Edith - such inanity can only be proffered for consumption by an academic (or like minded).

Give it a break.

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gabe
on September 17, 2018 at 13:46:11 pm

What would be the point of having a UBI/NIT without cutting back other welfare programs (especially in-kind programs like public education and public health care)?

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Juan Manuel Pérrez Porrúa Pérez
on September 17, 2018 at 13:58:12 pm

In my opinion, Locke inherited his belief in property rights from his presbyterian Grandee ancestors who looked at the deeds to their real property [which more often than not were contingent upon the continued validity of Henry VIII's dissolution of the monasteries in the 1530s] and the wealth and prerogatives that were associated with their real property and noticed that if a Catholic should ever again become the supreme sovereign in England then they, too, might end up on St George's Hill in Surrey with the landless Diggers making the same arguments advanced by Winstanley and Everard; who were not Levellers but rather "True Levellers" as they described themselves.

This is not say Locke knew nothing of Levellers and Diggers. To the contrary, he was all hugger-mugger with some bona fide wild and wooly old Levellers and Commonwealths' Men in the Rye House Plot but Locke was much more like Henry Ireton and Denzel Holles than he was John Lilburne, Thomas Rainborowe or Henry Martin.

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EK
on September 17, 2018 at 14:33:01 pm

I happen to have been watching the 1972 BBC production of "War and Peace" this weekend was caught by Prince Andre's reply to Pierre to the effect that the peasants need physical work in the same way the upper class needs intellectual stimulation.

The great danger of a guaranteed income for those who need physical rather than intellectual work is that without a job to do their lives tend to become unstructured, they lose the discipline of focusing their attention on a task they can do for eight hours a day, they become isolated and they die; just as who have been left behind are now doing.

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EK
on September 17, 2018 at 15:16:30 pm

Replacing all welfare and inkind transfers such as Medicaid, food stamps, section 8 housing vouchers with UBI is a good idea. Adding UBI to current social welfare is a horrible idea.

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bobloblaw1967
on September 17, 2018 at 15:22:04 pm

the percent of the population that is entreprenurial is tiny. UBI would mostly result in less hours work and more hours smoking legalized pot

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bobloblaw1967
on September 17, 2018 at 15:37:35 pm

[W]ithout a job to do their lives tend to become unstructured, [the unemployed] lose the discipline of focusing their attention on a task they can do for eight hours a day, they become isolated and they die; just as who have been left behind are now doing.

I find this a powerful argument: We need to create employment NOT for the benefit of the GDP, but for the benefit of would-be workers--to promote social interaction, promote a sense of self-worth, and add structure to the day. Leisure, much like other "goods," can become burdensome when you have it in excess. As a wise person once said, joy does not consist of having nothing to do; it consists in having things to do--and NOT DOING THEM!

That said, I suspect that (thanks largely to automation) we are entering a world with ever declining demand for labor. As many labor economists have observed, the labor market is distributing a shrinking share of society's wealth. I expect this process to continue, to the point where we'll all have to concede that we need some other mechanism for sharing the wealth.

Thus, the issue you raise, while valid, poses a false choice: A world with excess leisure and a UBI, or a world as we have known it. Rather, I think the choice we face is between a world with excess leisure and with a UBI, or a world with excess leisure and without a UBI. In other words, a UBI may help us address the problem that the labor market will no longer function to help distribute society's wealth. But we're going to face the excess leisure problem regardless.

Arguably, the greatest invention we require is not another cell phone; rather, we need someone to create (or revive) a public philosophy whereby people can gain a sense of self-worth even without any reinforcement from the labor market (e.g., getting a paycheck). Perhaps we need to promote the idea that we're all valuable children of god, and that we need to see our role--and everyone else's role--in that light. Or something like that. Cuz, without some message of social cohesion, we're in big trouble. As Russ Douthat observes, conservatives who turn away from Christianity turn toward white nationalism--and down that road lies Armageddon (an ironic fate for people pulling away from Christianity....)

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nobody.really
on September 17, 2018 at 15:48:42 pm

What $6 TRILLION spare cash?

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Sebastian Holt
on September 17, 2018 at 15:53:32 pm

I would think that even a good practicing agnostic…

I actually have been a bit negligent in my practices (God forgive me).

And, oh yeah, I am absotively certain that the level of entrepreneurship will reach previously unheard of levels when all those previously unemployed, either due to lack of talent, lack of will or even due to the vagaries of life are provided with a government stipend to do – well, to do JUST WHAT.
Oh yeah, to suddenly transform the,selves into modern day Edisons, Fords, Carnegie’s, Mellon or Jobs.

Well, I was discussing the extent to which currently employed people might elect to spend less time earning a paycheck in order to invest time in launching some other productive enterprise. But if you need an example, recall that J.K. Rowling was receiving welfare as she wrote the first (and second?) Harry Potter books. I suspect England’s return on that investment has been rather handsome, don’t you?

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nobody.really
on September 17, 2018 at 16:18:12 pm

A UBI regime may well be preferable to the current regime of welfare provision. After all, Social Security was established in the way it was precisely to reassure the elderly that they were not getting "welfare" but only their own economic contributions returned to them. I would entertain a UBI regime as a complete substitute for all of the current welfare and other federal payment/provision programs but not as an addition to them. But that will never happen, and even if it did, there is zero chance that it will be implemented on any basis other than sheet state fiat, resulting in a Venezuela-like scenario here. The UBI will be no different from the minimum wage; whatever it is, it won't be "fair" or "adequate."

But My God! The philosophical basis! The writer cannot be serious. There is no "rethinking" being done by anyone, merely a repackaging of Marx's famous lines from The German Ideology: "while in communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman or critic."

Here is the repackaged version: Van Parijs and Vanderborght are saying that the activities of citizens need not be formally commodified, and exchanged in the money economy, to be of value to the community. Producing art or music, volunteering at the kids’ school, assisting in the running of a charity, or giving great dinner parties for groups of friends may not be production, but they aren’t nothing. Happiness counts. . . People will find jobs because they want to, not because they must.

This is not how 7 billion living souls, nor even 340 million, actually live! And these jobs that people will "find": where, exactly, will they "find" them? Who will produce 350 million "jobs" for the finding? Are they like Eater Eggs, hidden by the Easter Bunny to be found by the delighted squealing children? Marx's version was just a flight of the imagination no less than John Lennon's and Van Parijs's and Vanderborght's.

The fact is, charity/welfare/income redistribution--however called, originally arose to relieve people who were utterly destitute or at imminent risk of becoming so: starving, homeless, without adequate clothing; and the world of 2018 is a world where that kind of destitution just doesn't exist any longer. The first priority of human civilization from its inception through about 50 years ago--to provide for the basic material necessities for simple existence for all--has been achieved. Such an object required no philosophical justification; it was intuitively accepted as an obligation by everyone (not literally everyone, of course). Now, however, coerced income redistribution does require such a justification, and a justification that soars to rhetorical heights waxing on "the liberation of everyone's human potential" or the like is just tripe at best and, at worst, flowers on the chains our would-be modern Lenins and Trotskies, Castros and Guevaras, would like to bind us in, in service to their wills to power.

Does no one read about the USSR any more? That was an actual UBI regime. UBI will necessitate, now as then, complete State organization and management of all labor of all persons (most of them, anyway). "Jobs" will be created and people will be "educated" to want them; this is how that works. The art and music all that liberated human potential will create will be carefully circumscribed; after all, we can't have any counterrevolutionary--excuse me, racist or transphobic--art being produced.

So, by all means keep publishing papers and books on UBI. Just don't do it.

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QET
on September 17, 2018 at 16:33:17 pm

This fine statement is essentially the undercurrent of my own comments. But I hope you mean phrases like "we need to create" and "we need someone to create" only rhetorically, because there are many people who would like nothing better than to be given the power to create for you what you are asking for. Your suggestion (that is how I understand it) that it is not possible now to produce or ensure 7 billion "meaningful" jobs is one I have often made myself.

The only development I can see that could alter the inevitable stasis on this planet is the Star Trek-y one where humans push out into space and are able to find outlets for their energies there. But I don't know if that is a real possibility or just an imaginary one.

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QET
on September 17, 2018 at 16:40:04 pm

Re: USSR and UBI:

The old joke (which follows) actually describes UBI under a state planned economy such as USSR:

Worker says: "Everything is in balance here in USSR. We pretend to work and the bosses pretend to pay us."

Of course under communism, all work was meaningful, right?

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gabe
on September 17, 2018 at 17:33:01 pm

"That said, I suspect that (thanks largely to automation) we are entering a world with ever declining demand for labor. As many labor economists have observed, the labor market is distributing a shrinking share of society’s wealth. I expect this process to continue, to the point where we’ll all have to concede that we need some other mechanism for sharing the wealth. "

Interesting, indeed and not without value.

Item in recent news:

Automation is anticipated to account for 50% of all labor tasks within the next 25 years.

Seemingly supports nobody's argument.

Let me try to modify that statement.

Should the US continue on a path of outsourcing labor tasks to overseas markets, in pursuit of the Wall Street financial dictates, then, YES - this will surely come to pass.

However, and again as nobody alludes to, if a more responsible social - business ethos is able to take hold, perhaps, we may be able to forestall or reduce that 50% figure substantially. Let us not forget that the videos we see of high tech electronic manufacturing notwithstanding, a substantial portion of all electronic components / hardware are still assembled by hand (as one example). This work was previously performed by US workers, who have neither lost their ability nor their desire to perform such labor.

So I would also look to changes in the incentive structures operating upon corporate management; in particular those Wall Street based financial incentives which have reduced the power and influence of the *productive* professions, such as engineering, research and manufacturing, in the corporate world and seen a corresponding gain in influence to the green eye shade types who capitalizing on the peculiarities of the Tax Code have transformed many corporations into horizontal conglomerates run by managers who are less than expert in the field. Rather, the financiers gain prominence because, as an example, they know how to perform leveraged buyouts, etc, the growth from which expands the balance sheet(s) and satisfies Wall Streets incessant demand for growth.

Cuz, it ain't simple, kiddies, how we got into this mess.

And it is clear that one of the reasons that as nobody rightly argues the labor system is responsible for an ever decreasing share of the proper distribution of society's wealth (perhaps, that should be societies', as it affects more than just the US)

Should we fail to(re-)establish a more human social-business ethos, like nobody, I suspect that we will have a world with EXCESS leisure AND UBI.

Here is a question for you, nobody:

Should government decide to fund the arts via UBI, how long before it takes on the form AND purpose of the previous application of UBI - the USSR funded arts, etc. Gee, that turned out pretty well didn't it; well, only if one includes *samizdat*.

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gabe
on September 17, 2018 at 17:36:50 pm

OK, I'm basically against payment to an individual for just being alive; call what you wil. Welfare charity whatever. That being said, directly payments to all individuals cutting out the middle man (the bureaucrats) would enable far more new consumers to enter and energyize the economy than tax cuts for those who pay the taxes. Their aren't enough wealthy people to energize the markets to create jobs and the UBI would add 15 to 20 percent more functional consumers than any federal tax cut of 5% would. Look closely, the federal government is no where near balancing the budget even with record tax collections from the various tax cuts since the Reagan presidency. The face facts, supply side economics will never balance the budget since cuts to social spending never happen.

Let's eliminate the middle man bureaucrats put the poor and lower middle classes (everyone gets the Ubi as well) on the dole and energize the economy from below. One thing to remember, he who pays the band calls the tune. Look for a direct reducton in individual freedom when the UBI eliminates choice since the first thing to go will be free choice with the UBI

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David Weber
on September 17, 2018 at 18:37:44 pm

Unsung here;

The song of the Rules of Policy (legislated "laws") to delineate "incomes" in terms of needs, rather than by commutation.

And the discordant notes of impacts of those Rules on individual liberty?

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R Richard Schweitzer
on September 17, 2018 at 19:31:17 pm

Now comes MORE news contradicting earlier report on loss of jobs to automation:

https://hotair.com/headlines/archives/2018/09/robots-workplace-create-double-jobs-destroy/

wherein robots create more jobs than they destroy.

Hey, we may be confronted with a problem of unemployed robots. UBI for robots - too.

I think, however, we may be missing the bigger picture, i.e., State intervention AND determination of who will receive what, when, how much and especially, if as nobody suggests that elusive *someone* will create all those jobs, presumably a government *someone*, who decides who gets those jobs, who decides who remains "leisurely" (sedentary, actually) and yep, correspondingly who gets FIRED and WHY?

This could put nobody's call for "god's little chilluns'" in an entirely, if unfavorable light. Without freedom to navigate our own lives we are in fact children. I would suggest that we would not be God's little children but rather Leviathan's.

Of course, all too often those who suggest that we embark on such a path PRESUME that they will be among the fortunate CHOSEN.
Ha!

To bastardize a phrase of Carl Jung:

"A particularly beautiful woman [theory] is a source of terror. As a rule, a beautiful woman [theory] is a terrible disappointment."

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gabe
on September 17, 2018 at 20:51:56 pm

Two questions. 1. What happens when the currency becomes worthless due to over printing? 2. What happens to people who refuse to pay the State's taxes or obey the State's laws regarding wealth redistribution? I would guess that our glorious leaders would have to not only reinvent the old Soviet Union but the Soviet Union's Gulag system as well.

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libertarian jerry
on September 17, 2018 at 21:39:46 pm

No economist wants to address the Alligator in the corner.

The tens of millions of government workers who do so very, very well in the state and federal Swamp. They will fight, even if normally "liberal Democrats", to protect THEIR rice bowl. And fight viciously to PREVENT exactly what these pie-in-the-sky schemes depend on -- billions of dollars freed up by "dismantling minimum wage laws, Social Security, food stamps, and housing subsidies" and firing the horde of paper pushers employed in shoveling out the cash.

Without killing that Alligator ( their public employee Unions that control our politicians) all these "scholarly" articles are just mental masturbation.

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Professor Joseph Olson
on September 18, 2018 at 00:14:50 am

I would entertain a UBI regime as a complete substitute for all of the current welfare and other federal payment/provision programs ....

I wouldn't. Imagine a soldier who gets blown up in a military operation and needs expensive treatment. Would we really tell that soldier, "Nope, sorry, we've eliminated VA benefits; you're remedial measures are capped at the level of the UBI"? Clearly some people will need more expensive interventions than others. Note, however, that if we move toward a Medicare for All model, these costs might already be covered.

That said, I ponder the idea of a UBI being a substitute not only for Social Security and SNAP funding, but perhaps also for the minimum wage, union laws, anti-discrimination labor laws, OSHA regulations, etc. If we give people a viable alternative to work, then we arguably relieve employers of a duty to fairness. Now, employers would be free to contractually COMMIT to certain kinds of fairness as a means of attracting employees (or to ensure their own efficiencies). But that would become a matter of contract between employer and employee, not government mandate.

In short, while some people gasp at the idea of wealth redistribution, they may fail to appreciate the extent to which current policies are designed for wealth redistribution. Arguably, straightforward wealth transfers would be more efficient for all concerned.

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nobody.really
on September 18, 2018 at 00:29:09 am

1. The US has long printed more currency than it can back up with gold reserves. So if you need a place to mail all of your useless US currency, feel free to ship it my way.

2. Likewise, people have been refusing to pay US taxes since the days of the Whiskey Rebellion--and the US has long had mechanisms for dealing with them. Yes, sometimes it involves incarceration. So it was in the days of Thoreau; so it is now.

...oh, the tyranny....

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nobody.really
on September 18, 2018 at 01:51:21 am

"When" the currency becomes worthless I will ship you all I have and then you can use it as either toilet paper or wallpaper just like the Wiemar Republic did in the 1920s. Don't think it can happen here? Fiat money has always failed,sooner or later.

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libertarian jerry
on September 18, 2018 at 09:19:27 am

"There is no reason to expect that most people can be bought off for $1,500 per month."

The problem isn't what "most people" in the labor market will do, it's the effect on the marginal people in the most vulnerable SEGMENT of the labor market--specifically, entry-level workers. Entry-level workers (or people about to become entry-level workers) are the ones most likely to decide that playing video games all day for $1,500 per month is preferable to working 40 hours per week for a bit more than that. And if you derail people just entering the labor market from taking entry-level jobs, how will they ever progress to the types of jobs that "most people" would not give up for $1,500 per month and full-time leisure?

The problem of people deciding to live at the expense of others rather than engage in productive work would start out small, I'm sure, because it's true that "most people" would not choose to do that today. But will it stay small?

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PubliusVA
on September 18, 2018 at 09:53:17 am

"There are a thousand hacking at the branches of evil to one who is striking at the root."
.
Project Veritas
Deep State Investigation Released Today, Short Video
Federal Employee for State Department: “Resist everything… Every level. F**k sh*t up.”
Democratic Socialists of America (DSA) Embedded in Federal Government Positions, Actively Resisting
https://www.projectveritas.com/2018/09/18/deep-state-unmasked-state-department-on-hidden-cam-resist-everything-i-have-nothing-to-lose/
.
Rep. Thomas Massie
‏Verified account @RepThomasMassie
Sep 13
Great news for fans of @TheSwampSeries...they stopped by my office today to film a new episode!
Sneak Peek | Time for the Midterms

We’re back! The Swamp is back, and we're filming for the fall session. Featuring Rep. Ted Yoho
https://www.facebook.com/TheSwamp/videos/2196262153748519/

.
Watch all 7 excellent short videos of the inside workings of Big Government.
Worth every minute of your time. imo
The Swamp
@TheSwamp
What happens when people who hate Big Government take over DC? Go behind the scenes in The Swamp, a
groundbreaking new documentary series. https://www.facebook.com/TheSwamp/?hc_ref=ARSoQW3j7TpRryiISlDWLADlriOmsqh9LGLPH7PSYmMM5axFJaVwS1bcQKhvCBBapCg
.
Another must watch video, imo.
9/08/18 Supreme Court Justice Clarence Thomas
https://www.c-span.org/video/?450905-1/justice-clarence-thomas-speaks-federalist-society
On the Future of the Chevron Doctrine
https://fedsoc.org/commentary/blog-posts/on-the-future-of-the-chevron-doctrine
.
A Universal Basic Income Stipend for Americans: Is It Time?
Dietrich Bonhoeffer
Letters and Papers from Prison.
“Upon closer observation, it becomes apparent that every strong upsurge of power in the public sphere, be it of a political or a religious nature, infects a large part of humankind with stupidity. … The power of the one needs the stupidity of the other. The process at work here is not that particular human capacities, for instance, the intellect, suddenly atrophy or fail. Instead, it seems that under the overwhelming impact of rising power, humans are deprived of their inner independence and, more or less consciously, give up establishing an autonomous position toward the emerging circumstances. The fact that the stupid person is often stubborn must not blind us to the fact that he is not independent. In conversation with him, one virtually feels that one is dealing not at all with him as a person, but with slogans, catchwords, and the like that have taken possession of him. He is under a spell, blinded, misused, and abused in his very being. Having thus become a mindless tool, the stupid person will also be capable of any evil and at the same time incapable of seeing that it is evil. This is where the danger of diabolical misuse lurks, for it is this that can once and for all destroy human beings.”
.
.
When all else fails ....
https://www.youtube.com/watch?v=8F5nhYo5nx4

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Dagny Galt
on September 18, 2018 at 12:03:16 pm

[R]obots [may] create more jobs than they destroy.

They may. My argument has assumed the contrary, but I could easily be mistaken.

Historically, technology has destroyed many jobs, but new forms of employment have arisen. Consider that at one time, nearly everyone was employed in agriculture. Now, only 1.5%-2.5% of the US population is employed in agriculture--yet we do not see 97.5-98.5% unemployment. Clearly the workers found other ways to earn a living.

Kinda.

Recall that there was a painful transition as displaced rural workers moved to cities seeking employment; that's what Charles Dickens novels were about.

Still, by and large society adapted and rural workers ended up better off, right? Yes--for workers who could adapt. But consider other rural workers: horses. The US used to employ roughly 10x the number of horses we do today. Oh, society still employs horses--as pets, and meat. Quite obviously, not all rural workers could adapt to the change. The idea that new forms of employment will always arise clearly has its limits.

No doubt automation creates employment--especially for the highly educated. And, no doubt, this creates new demand for people to get technical educations. But the fate of those who can't will not be pretty.

Still, even the unenviable fate of the few may not justify impeding the power of creative destruction, if it really will create more and better jobs generally. But will it? I'm concerned that technology is advancing so quickly that it is akin to having an agricultural revolution in nearly EVERY job sector simultaneously. The old strategy of having displaced workers move to a new job sector may not work when nearly every sector is experiencing the same change.

I admit that I'm engaging in a "This time is different!" argument--a famously bad practice in economics. Historically, creative destruction has led to more employment, not less, so perhaps I'm being needlessly pessimistic. I hope so.

I think, however, we may be missing the bigger picture, i.e., State intervention AND determination of who will receive what, when, how much….

Uh ... not sure what this is about. Recall that we already have myriad wealth transfer mechanism throughout our laws. In other words, we already have state intervention and determination of who will receive what, when, and how much. The advantage of a Universal Basic Income is that it would be UNIVERSAL: the choice of who receives it, and how large it is, would be relatively simple and uniform compared to the status quo.

…especially, if as nobody suggests that elusive *someone* will create all those jobs, presumably a government *someone*, who decides who gets those jobs, who decides who remains “leisurely” (sedentary, actually) and yep, correspondingly who gets FIRED and WHY?

You’ve lost me here. *I* was not the one arguing for manipulating the labor market; I was the one arguing for creating a philosophy whereby people could achieve a sense of belonging and self-worth WITHOUT being in the labor market.

To the contrary, gabe (and Trump) favor manipulating markets to oppose “outsourcing,” presumably via tariffs. Let’s be clear: These are government policies designed to determine who gets jobs. And the choice of which tariffs to impose, and by how much, reflect the government picking winners and losers.

To be sure, this is one possible response to a world with declining demand for labor—but it’s an economically costly one, because it compels firms to do things in a less-than-efficient way simply to create more jobs in the US. With tariffs, we typically cost ourselves $300,000 for each $50,000 job we create/save. (Numbers are only illustrative.) This is one form of wealth transfer—but, I hope you can see, a wildly inefficient kind.

In contrast, I would propose letting markets operate as efficiently as possible—eliminating not only tariffs, but minimum wage laws, FICA taxes, etc. But then I’d TAX those oh-so-efficient firms to share the wealth. This is another form of wealth transfer—a more efficient form. Society ends up richer.

(At least, that’s the theory. We’d need to run a lot of models, and tweak a lot of variables, to see if the theory holds up. And who knows? Maybe models will demonstrate that tariffs, labor laws, existing social safety net programs, etc., are the more efficient option. I’m willing to be persuaded either way.)

To bastardize a phrase of Carl Jung…

]

You know he was Freud’s protégé—until Freud learned that he was having an affair with Freud’s daughter Anna. Freud stopped talking to either of them from that day on—notwithstanding his daughter’s pleas (in a German accent): “Papa, tere was nothing wrong with our love! It was beautiful! It was pure! And ve vere Jung … and Anna Freud!”

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nobody.really
on September 18, 2018 at 12:35:10 pm

the percent of the population that is entrepreneurial is tiny.

And the percentage of atoms that are platinum is tiny, too. Yet society is willing to exert great effort in finding those atoms because they're so figgin' valuable.

I don't mean to go all Ayn Rand on you, but if you look around your current environment, there's a good chance that you will be unable to see ANYTHING that was not influenced by an entrepreneur. Even the trees in my yard--and the yard itself--came from firms started by entrepreneurs. I have the good (?) fortune to be married to an entrepreneur, and the capacity to see opportunities and combine resources in new ways never ceases to amaze me. (And, yes, sometimes bankrupt me; risk-taking is part of the package, too.)

No disrespect to non-entrepreneurs; I count myself as one of them. But as C.S. Lewis remarked, humility is not about denying your talents; humility is about seeking the best outcome REGARDLESS of whose talents get employed. I want the best social outcomes, so I want to ensure that scarce things--including talents--can be employed for their most valuable purposes. We strive to overcome various forms of prejudice so that people can make the most of their talents regardless of their demographic circumstances; I merely propose helping the relatively poor/busy do likewise.

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nobody.really
on September 18, 2018 at 13:07:32 pm

I think these are reasonable hypotheses. However, if it were true that government subsidy of of free time leads to more entrepreneurship, one would expect the cupaneros of Puerto Rico to be stalwarts of entrepreneurial vigor. The available evidence does not seem to bear this out.

If we assume that entrepreneurial predilection is evenly distributed across a population, one would also assume, that other traits, e.g. propensity to gambling addiction, profligacy, drug addiction, etc., to also be distributed evenly. In this event, the government ends up not only subsidizing potentially beneficial activity, like entrepreneurship, but also decidedly destructive behaviors as well.

Richard brings up a good question below: what are the implications for liberty? Do people who pay for benefits have a moral, legal or civic claim on the conduct of the recipients of those benefits? To take an obvious hypothetical, if someone pays for your healthcare, do they have a right to object to your smoking? If so, how far does this right extend? Merely voicing an opinion, right to refuse to pay for smoking related or arguably smoking related illness? Can they prevent you from riding a motorcycle without a helmet? Now assume that the payment is not for medical care, but just for "stuff," with the assumption that "stuff" means necessities like food, clothing and shelter. Does the payor have a right to object to the recipient's purchase of marijuana? Sex worker services? Lottery tickets? Guns? Is there any point at which, by social contract theory or otherwise that receipt of unearned benefits is accompanied by a claim on liberty?

Does a universal basic income distort the very fine balance between risks and benefits of particular behaviors? Is there a societal Peltzman effect whereby certain forms of wealth distribution effectively subsidize foolhardiness that is detrimental not only to society but to the recipients of such benefits? Are there considerations for how producers and non-producers view the relationship with each other if the non-producer feels entitled to the fruits of another's risk taking and effort?

Now, it goes without saying, so I won't.

Are there considerations of justice to be hashed out? Richard has frequently expressed a model of justice based on the notion of obligations. Can income be justly redistributed without invoking reciprocal obligations, and if not, what are those obligations?

I offer these questions with the assumption that wealth is unsustainably unevenly distributed in the United States. I assume that some form of wealth redistribution is necessary, but also suspect that any such undertaking will be fraught with unintended consequences.

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z9z99
on September 18, 2018 at 14:08:17 pm

OK, it was a rhetorical "all" anyway. And personally I would very much like to see the VA medical system greatly improved.

I am not gasping at wealth redistribution. It has proven itself necessary to ensure not just the survival but the prosperity of a market capitalism-like economic order. The question, for all but dogmatists, is not whether but how much (and under what circumstances). A "straightforward wealth transfer" exists only in theory. So the concept suffices for its main purpose which is to enable academic career advancement via regular publication and the resulting branding of the academic with a marketable brand. But in actuality, the theorized efficiencies will never be realized, at least not on a net basis.

UBI will always be Tantalus forever reaching for the fruit, no different from "livable" wage. The UBI will have to be sufficient for a blue city (say, SF) resident with no job to live "decently." Average rent for a 1-br apt in SF is around $3500. Go by the general 30%-of-income rule and each person needs $11,667 tax free UBI per month. How long will that average rent remain at $3500? The exact numbers don't matter to this dynamic.

And what happens when the inevitable significant fraction of the population squanders its UBI on drugs or gambling or whatever? They'll just be left to starve/freeze, right?

I realize all of this is painfully obvious.

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QET
on September 18, 2018 at 14:19:13 pm

nobody:

"You've lost me here."

Only BECAUSE you wish to avoid the point I was making and it is not unlike the point R. Richard made.

What is the effect upon Liberty? when job assignments, distribution of wealth, etc etc is surrendered to the vagaries of governmental experts? Who decides who warrants payments? who decides what those jobs you expect that elusive someone to create?

As Z states and Richard implies, what happens to the notion of obligations.

Can I ask, tell, indeed, command you to give up red wine if I am providing you with a monthly stipend? And the example that Z cites of a medical professional denying service to someone who smokes HAS ALREADY happened in England and quite openly; in the States, it is more subtle but still present. In England, smokers have been told that they will not be allowed to have certain procedures performed on them.

Hey, after all, I (the State) am paying for this, right? is the refrain.

Now as to your figures for a $300,000 cost for every $50,000 dollars of tariffs:
1) It all depends as always on what numbers you choose to incorporate into your analysis AND
2) Just like those studies arguing against tax cuts, it is based upon aSTATIC analysis - one which does not comprhened ensuing / adaptive behavior by the subjects of the study.

Hey, BTW: Freud could not complain about little Anna and Carl as he himself had a couple of affairs with other women to include a patient.

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gabe
on September 18, 2018 at 15:18:29 pm

….the cupaneros of Puerto Rico….

You keep using that word. I don’t think it means what you think it means. At least, *I* don’t know what it means.

If we assume that entrepreneurial predilection is evenly distributed across a population, one would also assume, that other traits, e.g. propensity to gambling addiction, profligacy, drug addiction, etc., to also be distributed evenly. In this event, the government ends up not only subsidizing potentially beneficial activity, like entrepreneurship, but also decidedly destructive behaviors as well.

All true. Likewise—

• Imagine that we adopt tariffs that increase social costs $300,000 for each $50,000 job saved—and the people with those $50,000 jobs spend their money in ways you disapprove of. What then?

• Imagine Union troops died to free slaves—and some of the former slaves then behave badly. What then?

• Imagine patriots die to preserve your right to participate in democracy—and you fail to bother to vote. What then?

• Imagine your parents scrounge and save to send you to college, and you end up living a life they disapprove of. What then?

Two morals: 1) When we give people resources, they may use those resources in ways we disapprove of. ‘Twas ever thus.

2) Knowing this, we may CHOOSE to try to restrict the use of gifts. And I’m not entirely opposed to this, though it often doesn’t work. For example, we restrict what “food stamps” can be spend on—but people can evade these limits (to some extent) by simply selling the food stamps for cash.

For my part, I’d favor keeping some portion of UBI in the form of socialized medicine, e,g., Medicare for All. You might prefer to have all the money in cash and simply buy the amount of health insurance you think you need for yourself. But there’s the rub: You’d buy the amount YOU want for you—not the amount that *I* want for you. So we have a simple disagreement about values. And if the public is footing the bill, then I’d let the public make decisions about how the money is distributed. If the public is feeling libertarian, they might vote one way; if not, they might vote the other.

Likewise, we might attempt to restrict the use of these dollars for gambling, prostitution, tobacco and other drugs, etc. The restrictions wouldn’t be entirely effective—but what it?

If it’s any comfort, remember that we’re talking about wealth redistribution. So we’d have just as much chance to transfer a dollar out of the hands of someone who frequents prostitutes as we are to transfer the dollar into the hands of someone who frequents prostitutes. (Probably less: Men tend to be wealthier than women, so a UBI would likely result in a net flow of dollars from men to women.)

[W]hat are the implications for liberty? [I]f someone pays for your healthcare, do they have a right to object to your smoking?

Well, we’re making this up as we go, so we could propose any rules we like. I see three general options.

1. The simplest rules would say no: Government transfers the funds, and you’re free to blow it at the racetrack that afternoon.

2. An interim position would be to declare limits on what recipients can do with the funds received by the UBI, but leaving recipients free to spend funds from other sources in any way they liked.

3. But conceptually, government could impose all kinds of conditions on receipt of the funds. For example, government could say that if you accept UBI funds, you agree to stop smoking—and if you break the agreement, you may be committed to a rehab facility for 30 days. Presumably government would be unable to impose unconstitutional conditions—mandating religious practices, for example. That said, SCOTUS ruled that there are limits on the conditions government can impose on grant recipients; see Agency for International Development v. Alliance for Open Society International, Inc. (2013).

Does a universal basic income distort the very fine balance between risks and benefits of particular behaviors?

Maybe—but what reason is there to think that this balance is all that fine? After all, we have a UBI in the form of police and fire protection. In the absence of this, presumably people would invest more in protecting their homes from fire and theft, and in learning self-defense strategies. In other words, our current polices are subsidizing lazy, risky behaviors on the part of the public. Another way to put it is that these institutions subsidize our civic way of life. It’s all true. Whether you favor or disfavor these behavior modifications, they are the result of public policy.

Likewise, we used to have an economy that favored physical strength. Now we have an economy that favors intellect. And government has played a major role in that transition (again, in part, by creating environments in which people don’t need to rely on their own physical strength for their own safety).

In short, government is CONSTATNTLY altering people’s incentives. Because I’m not persuaded that our current set of policies incentivizes optimal behavior, I have little fear that tampering with the current system will disturb some ideal balance.

Are there considerations for how producers and non-producers view the relationship with each other if the non-producer feels entitled to the fruits of another’s risk taking and effort?

The US, with its various individual liberties, was created because a bunch of risk-takers refused to act independently, but instead bound themselves together—pledging their lives, their fortunes, and their sacred honor—to creating a framework where greater autonomy could thrive. We are all now entitled to claim the benefits of their risk-taking and effort—including those of us who constantly complain about having to contribute to the maintenance of this system.

I don’t anticipate any special obligations attaching to the right to qualify for a UBI—any more than I see them attaching to any other governmental right. Yes, we owe obligations toward the maintenance and development of our society—but those obligations exist today, regardless of the UBI. This ain’t a cafeteria plan, with a separate price for Free Speech, Due Process, or Equal Protection. Everyone gets the whole smorgasbord—at a lump-sum, sliding-scale price.

I assume that some form of wealth redistribution is necessary, but also suspect that any such undertaking will be fraught with unintended consequences.

Certainly true. Just as the status quo is fraught with unintended consequences, such as our current wealth disparities and potentially a declining demand for labor. So the real question is whether we have cause to believe that the unintended consequences of a new policy would be worse than the unintended consequences of the status quo.

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nobody.really
on September 18, 2018 at 16:02:09 pm

The UBI will have to be sufficient for a blue city (say, SF) resident with no job to live “decently.”

Well, yeah, there would be some advantage to that kind of benchmark. But, as you point out, if the benchmark where quite that explicit, it would create obvious disadvantages.

So I'd start by saying that I know of no minimum amount for a UBI--with the understanding that the smaller the UBI, the fewer government programs we could fold into the UBI. But if the feds wanted to give everyone $10 annually, they could simply add it to the standard deduction on the tax form--and I wouldn't complain. It's a start.

However, even IF we wanted to set the UBI at a subsistence level--and that would be nice--it does not follow that it has to be a subsistence level in San Francisco. It could be a subsistence level in Billings, Montana, or Biloxi, Mississippi--anyplace where a person would have a realistic option to move to, and that maintained minimum US living standards.

And what happens when the inevitable significant fraction of the population squanders its UBI on drugs or gambling or whatever? They’ll just be left to starve/freeze, right?

What happens to them today? They get some modicum of public and private assistance. I would want to continue at least some of that assistance--and thus, I wouldn't favor converting all government programs into cash. As I mentioned above, I'd favor a Medicare-for-All type program--effectively converting some of the UBI into health insurance.

But, as I've also mentioned, I expect that some people receiving UBI would spend it in ways I disapprove of--just as lots of people spend money in ways I disapprove of. The US gave firms massive tax cuts, and they spent those savings on buying back their own stocks; that also didn't meet with my approval. What else is new?

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nobody.really
on September 18, 2018 at 16:38:28 pm

”You’ve lost me here.”

Only BECAUSE you wish to avoid the point I was making and it is not unlike the point R. Richard made.

What is the effect upon Liberty? when job assignments, distribution of wealth, etc etc is surrendered to the vagaries of governmental experts? ...who decides what those jobs you expect that elusive someone to create?

Ah. Are you responding to my statement “We need to create employment NOT for the benefit of the GDP, but for the benefit of would-be workers–to promote social interaction, promote a sense of self-worth, and add structure to the day”?

Perhaps I expressed that inartfully. I merely meant to acknowledge EK’s point that employment provides value BEYOND productivity and a paycheck. Even people who receive income (via a UBI) might suffer for lack of social interaction, a social role and self-esteem, and a daily routine.

But this idea has nothing to do with a UBI. It’s just a commentary on problems arising from the declining demand for labor. If this idea bothers you, feel free to ignore it (for purposes of discussing the UBI).

Can I ask, tell, indeed, command you to give up red wine if I am providing you with a monthly stipend?

In your case, I expect the stipend to be PAID in red wine.

Hey, BTW: Freud could not complain about little Anna and Carl as he himself had a couple of affairs ….

Eh, I’m not sure this joke worked. The whole story is just an excuse for a pun: If you use a German accent to say “Ve vere Jung and Anna Freud,” it sound like “We were young and unafraid.” See? Heh heh heh.

Heh.

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nobody.really
on September 18, 2018 at 17:02:36 pm
Image of z9z99
z9z99
on September 18, 2018 at 17:35:13 pm

nobody:

Therein lies the problem:

UBI @ SF rates or @ Bulls Balls, Montana rates?
And who determines this?
And what pressures are brought to bear on the "supplicant"?

In fact, as I am certain that YOU know, the end result of this new *endowment* from the Federal cornucopia will be that the new *fruit* will simply be one more amongst an already overflowing basket of ripe (overripe, perhaps?) fruits on offer for the plucking by the less ambitious (?) / less fortunate of the citizenry.

Will recipients of UBI voluntarily give up their Medical coverage. One may safely assume - NOT!
Will they give up other *free* shit? - One may also assume not?
And on and on and on!

Moreover, the history of entitlement programs reveals that they never diminish in breadth, scope or size. They appear to grow like some Blob from a 1950's B-movie.

Forget, for the moment, the propriety / morality of government sponsored indulgence of the unambitious; look only to the costs. Someone used a figure of $6 TRILLION cash. A little high. But perhaps not that high - and certainly not out of reach after, perhaps, less than a decade of COLA, program expansion, etc.

$1500 / mo x 12 months = $18,000 per year.
How many are eligible and / or would choose to be eligible. In fact, some proposals indicate that EVERY citizen is eligible, needful or not.
Where does this money come from ON TOP of all the other "endowments"?

We both know what will result. Simply ONE MORE ENDOWMENT at a staggering multi-trillion dollar cost.

Put this into effect, and the tax burden alone will ensure that UBI WILL be needed as countless millions of additional jobs will be moved offshore as no corporation will be able to sustain itself under such heavy burdens.

Perhaps, rather than UBI, we simply CUT OUT THE MIDDLEMAN and send checks to those who have previously been vetted and are deemed eligible for current welfare payments. The reduction of administrative overhead would be more than sufficient to actually increase payments to the needy.

Oops, I forgot, Shoot! That won;t work. All thiose Democrat Party Federal and State Buireaucrats would lose their jobs - we can't have that now, can we?

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gabe
on September 18, 2018 at 23:27:46 pm

I am not persuaded by your examples of potential consequences following from sacrificial choices. As a preliminary matter, analogies and similes are sometimes useful for illustrating relationships, but are not acceptable substitutes for rigorous analysis. This is particularly true where, as here the subject under discussion involves unique considerations of economics, psychology, philosophy, law, and ethics. Further, I don't think the examples that you cite are sufficiently analogous to considerations of universal basic income, even if a general resort to analogy might otherwise be useful. The motivations of civil war soldiers, parents, founding fathers and trade policy geeks are too diverse to say anything conclusive about their relationship to the consequences that you cite. And I doubt that any of these consequences ever formed serious arguments arguments against the sacrificial choices with which you associate them. I am skeptical that even the most fanatical copperhead argued that the civil war should be foregone because some of the freed slaves might misbehave, or that the husband should get snipped, or blow the college fund in Vegas because junior might get a nose ring. Finally, I would note that each of your examples does have an answer to "What then?" There is recourse for taxpayers, Reconstruction society, patriots and parents who when asked if they have children respond "None to speak of, no." I am not concluding that you do not have a case, or refuting the notion of UBI, just opining that this use of analogy does not help make that case.

I also am not persuaded by the claim that a fire department is a form of UBI. It is not. A fire department is a community endeavor that is focused on a specific need. If Joe Sixpack were able to take the firetruck on a beer run or use the firehouse for orgies, the analogy might have more validity, and might also call into question whether a community is running the fire department correctly. A fire department is not socialism*; it is a community endeavor that makes sense when measured against considerations of efficiency, community values, and notions of responsible citizenship. I have said before that there are some things that i want only the government to do (run police departments, prisons and courts) and some things I do not want it to do (run newspapers, churches, labor unions or casinos). The fact that the notion of community inherently involves some sense of shared obligation does not make everything that a community does socialist or any common undertaking a form of universal basic income.

And yes, in properly functioning systems, risk and benefit are finely balanced. Reasonable gamblers would not play roulette if the wheel had 24 green slots instead of two; unless of course they were playing with someone else's money. When the consequences of foolish behavior are perceived to be borne by someone other than those engaging in the behavior, distortion of incentives exists and you end up subsidizing foolish behavior. I assume you have read The Big Short, which chronicled the effects of risk/benefit distortions that were bad for lots and lots of people. I am also not as confident as you seem to be about the wisdom of Medicare for all, but that is another discussion.

This is a serious issue that does not have a simple solution or false choice such as UBI or status quo. I think the article on cuponeros is instructive, because it raises some interesting questions:

1.) Why is author suggesting changes to the current welfare system? Where did the problems that he is trying to solve come from?

2.) Why are educated people moving from Puerto Rico to the mainland United States?

3.) If one of the problems seems to be that everyone is a cupanero and has his snout in the public trough one way or another, how is it that people that are already fabulously wealthy profit handsomely from programs designed as a social safety net (e.g. fast food companies, large grocers, etc.) What government policies account for this seeming imbalance where people with the least need benefit the most? Is the system being gamed?

4.) Do lavish welfare programs degrade human capital?

5.) Do the proposed fixes (e.g. placing behavioral constraints on receipt of benefits) infringe on liberty? Is this okay?

* Yes, I know you didn't mention socialism, but I saw a bumper sticker that said "If you hate socialism buy your own damn road," and have heard umpteen times that defense, and Social Security and pretty much any government program is "socialism." I thought I'd take this opportunity to disagree. Hope you don't mind.

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z9z99
on September 19, 2018 at 02:02:56 am

I am not persuaded by your examples of potential consequences following from sacrificial choices.

That’s fine. You commented that under a UBI, “the government ends up not only subsidizing potentially beneficial activity, like entrepreneurship, but also decidedly destructive behaviors as well.” I merely observe that 1) this is a common dynamic of policies designed to improve people’s lives, and 2) if we regard this as a sufficient problem, we can seek to attach conditions on UBI recipients—but we should expect that some people will seek to evade those conditions.

A fire department is not socialism*….

True—at least as Benjamin Franklin created them in Philadelphia. Back then, they were pure free-market capitalism. Each property owner chose whether to subscribe and pay the fee, for which he would receive a medallion to be placed prominently at the front of the property. When a fire broke out, the fire department would extinguish blazes on properties displaying the medallion, and not otherwise. Rival fire-fighting firms would compete on price and reputation for prompt service—but might also seek to sabotage each other.

But in my neighborhood, people don’t get to choose whether they pay for the fire department; the payment is built into the tax structure, levied in proportion to the value of people’s property. Thereafter, people get the benefits of the fire department (or, at least, many of the benefits) at no incremental charge. More or less, people pay for the service based on their ability to pay, and they receive the service based on the extent of their need. That looks like socialism to me.

That said, WHO CARES? The point is that government is constantly adopting policies that shift risks and incentives—and, presumably, people adjust their behavior accordingly. If we’re worried about ANY policy that might alter people’s behavior, arguably we should eliminate government. (That one’s for you, Libertarian Jerry!)

I don’t mean to sound cavalier about incentives. But in a world that has never been richer, and that may be facing a declining demand for labor, the idea that giving workers money will impoverish them seems a little far-fetched to me. I don’t doubt that Puerto Rico faces economic challenges, as does much of Latin America. I do doubt that the social safety net is the CAUSE of those challenges, rather than a symptom—but I’m willing to be persuaded.

Why are educated people moving from Puerto Rico to the mainland United States?

As far as I can tell, people throughout the world—educated or not—seek to move to the mainland United States. And not just that: Educated people move WITHIN the United States, tending toward coastal cities. These cities often have relatively high tax rates and relatively generous social safety nets. Maybe there’s a lesson here about the merits of a UBI, but we’d want to unpack that a little more.

[H]ow is it that people that are already fabulously wealthy profit handsomely from programs designed as a social safety net (e.g. fast food companies, large grocers, etc.)

Maybe they provide a desired service especially efficiently?

Look, if you have evidence of corruption, then we should focus on corruption. And if you regard wealth as evil in itself, then I guess you’re justified in focusing on the fact that some people are wealthy. But the mere fact that someone may have gotten rich while serving the poor rather than getting rich by serving the rich doesn’t bother me in the slightest. I don’t hold Sam Walton in contempt for making money catering to a working-class clientele.

What government policies account for this seeming imbalance where people with the least need benefit the most? Is the system being gamed?

Uh … maybe. Income disparities have rarely been greater, and clearly some people have learned how to thrive in the current environment. I suspect some of this would qualify as “gaming the system.”

For what it’s worth, I don’t favor a UBI based on theories that rich people are all blameworthy. I subscribe to a more John Rawls viewpoint. I want to focus on making things better, not on finding and punishing the guilty.

Do lavish welfare programs degrade human capital?

Probably, to some extent. Just as ending slavery triggered a northern migration, wherein many ex-slaves agricultural skills atrophied. When wars end, ex-soldiers experience declining military skills and physical fitness. Is that a problem?

Perhaps you’re referring to the backwards-bending labor supply curve. It sounds a little racy. And if you Google “backwards-bending,” you’ll see some pretty graphic images—that is, you’ll fully-clothed not-very-nubile economists explaining graphs. Pity.

Basically, standard economics suggests that as the price for something increases (all else being equal), the supply tends to increase, too. But labor differs. As the price of labor increases, a confounding thing happens: Workers get richer. And as workers get richer, they consume more of all normal goods—including leisure. In short, as people get richer, they eventually want to take more time away from the paid workforce. And conversely, as workers get poorer (say, as a result of an accident, or increased taxation), they may choose to work longer than they otherwise would have.

So yes, if we make workers richer, I expect they’ll reduce the amount of time they spend in the paid workforce, which could result in some degradation of human capital. But note that this dynamic is not unique to working-class people; rich people also respond to this dynamic. So if we tax rich people more heavily, they will find themselves poorer than they had expected to be, and some will elect to defer retirement—or at least shorten that vacation—to make up the loss. And this might result in higher maintenance of human capital.

Do the proposed fixes (e.g. placing behavioral constraints on receipt of benefits) infringe on liberty? Is this okay?

Could some condition infringe on liberty? Sure.

Consider: Assume the feds lack the authority to compel states to adopt a 55 MPH speed limit. Instead, the feds raise taxes and then to remit block grants to states—but only on the condition that the states adopt a 55 MPR speed limit. Conceptually states could face the threat of ever-increasing taxes until they accede to whatever the feds demand. This scenario assumes, however, that “the feds” do not need to fear an enraged citizenry.

Similarly, I expect that the feds could impose taxes to finance a UBI, and impose conditions on the receipt of the UBI, and some people might regard those conditions as burdensome. Yet many states impose work requirements on people receiving social safety net benefits, and few people seem to regard this as an undue infringement on liberty. (Instead, some people regard it as a misdirection of efforts, or just demeaning.) So I don’t know how serious a problem this would be.

Can you envision some specific condition that you think 1) would be sufficiently popular as to be adopted, 2) pass any constitutional challenge, yet 3) be unduly burdensome to liberty?

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nobody.really
on September 19, 2018 at 13:28:46 pm

nobody,

Many of your statements seem like responses to arguments no one has made, at least not made here. Whether this is intentional straw-man obfuscation, misinterpretation of others' arguments or just a characteristic of a good faith discourse style is not clear. I will assume it is the last of these. To keep on topic, allow me to address three quotes taken from the Puerto Rico article to which I linked earlier.

1.) "Stories of the “ay bendito” mentality, widespread tax evasion and high-profile corruption busts make it easy to label welfare recipients as opportunistic and fraudulent."

2.) “'In the last 20 years we have developed generations accustomed to dependency, and not hard work,' stated Ramón Luis Rivera Cruz, Mayor of Bayamón."

3.) "Ramón Cantero Frau, a former president of the Government Development Bank, referred to the mantenidos as 'a class of lazy, thieving, mooches created by the welfare state; encouraged by each incoming government.'"

4.) " Initially intended to redistribute wealth, social assistance programs when combined with generous benefits for public employees, budget deficits and countless incentives packages and subsidies for industry and commerce are now placing much of the burden on other sectors of the population. When money destined to nutrition for the poor, for example, ends up in the pockets of fast food franchises, multinational supermarket chains and imported foreign food, the ensuing exportation and concentration of wealth defeats much of the purpose of public assistance."

As you can see from quote 1, the issue of corruption was mentioned by the author of the article. Is corruption a reason why the public assistance programs in Puerto Rico leave something to be desired? I don't know. I've never been there. Someone obviously thinks it is. Google "Puerto Rico corruption" and see what other people think, particularly in the aftermath of Hurricane Maria. It certainly is possible that corruption plays a role, and as such should be a consideration for similar programs elsewhere.

Quotes 2 and 3 suggest that the unintended consequences of a poorly designed social welfare program go beyond a few anecdotal cases, or are simply failures to achieve desired results. There is a possibility that these characteristics of the poorly designed program do actual harm, not merely fail to do good. Again, not an argument against social welfare programs in the abstract, but a cautionary tale that should not be dismissed.

The fourth quote touches on your statement that " the mere fact that someone may have gotten rich while serving the poor rather than getting rich by serving the rich doesn’t bother me in the slightest." It is not the fact that someone has gotten rich that matters. It is that the the conditions that allow rich people to get richer off of programs intended to help the poor end up, in the author's own words "Defeat[ing] much of the purpose of wealth redistribution." If one is really concerned about helping the poor, one should be troubled that the effects of the program defeat the purpose of the program. One does not have to be against wealth to be skeptical of programs that claim to help the poor, but instead create "generations accustomed to dependency," and have effects that "defeat much of the purpose of wealth redistribution." Again, not an argument against such programs, but definitely a call to understand why this particular program went off the rails. If the final common pathway of your social safety net is "move to Florida," there is something wrong with your program.

As I said, I have never been to Puerto RIco. A friend from there (a physician who moved to the U.S, who has an engineer brother who moved to the U.S., and a lawyer sister who...moved to the U.S.) tells me that many of the island's problems are the result of U.S. congressional meddling, such as the Jones act. This apparently irritates a lot of Puerto Ricans. I also found the comments on the article discussion how Puerto Rico' s inability to devalue currency, being tied to the dollar, creates headwinds for economic recovery.

As a quick aside, perhaps you would be so kind as to give your definition of socialism, and explain how your reasoning regarding fire houses does not lead to the conclusion that all governments are socialist. I think it wise to maintain the substance of public ownership of the means of production in the definition. It minimizes the risk of pointing to things desirable and claiming them to be socialist while whitewashing the effects of the very real miseries associated with the socialist experiments of the last century and a half. I rather doubt that the economic and humanitarian climate in Venezuela has anything to do with dalmatians, fire engines, and ladder trucks.

As for your question:

"Can you envision some specific condition that you think 1) would be sufficiently popular as to be adopted, 2) pass any constitutional challenge, yet 3) be unduly burdensome to liberty?"

I would first note that there are some imprecision in the terms. What will pass constitutional muster in one court may not in another. Breyer and Alito may not agree. Also, what is "unduly burdensome" is a matter of opinion. With these caveats I will mention two: prohibition of firearms in public housing and drug testing welfare recipients.

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z9z99
on September 19, 2018 at 13:40:00 pm

Oops, forgot. The second and third quotes above are what I was referring to by "degrading human capital:" creating dependence and the damage associated with it.

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z9z99
on September 19, 2018 at 16:54:49 pm

Thanks for the (tentative) assumption of good faith on my part.

1. Do social safety net programs promote laziness among Puerto Ricans?

Again, I have no great knowledge about the causes of the depressed economic circumstances in Puerto Rico, or in many other parts of the world. I read the quotes in the article blaming (to a greater or lesser degree) safety net programs or the beneficiaries of those programs. I read such complaints all the time, whether or not people are talking about Puerto Ricans. I conclude that status-consciousness, envy, and resentment are the human condition—but may not provide an optimal prism for analyzing human behavior.

Years ago I volunteered with Habitat for Humanity. The housing market crash meant that many building projects had dried up, and many developers were willing to donate housing components such as bay windows, Jacuzzi-style tubs, fancy countertops, etc. The stuff piled up all over the place. Yet we were instructed that we could not incorporate much of this stuff into a person’s house. See, neighbors are hyper-aware of their status relative to the status of the new house on the corner, and would deeply resent anything suggesting that their poor neighbors were living in a nicer house than they were—even if this cost them nothing.

Likewise, polls show that Americans resent the amount the US government spends in foreign aid—while simultaneously having no idea how much the US government spends in foreign aid.

Some people will recall Tally’s Corner, a study of the behavior of poor black men in Washington DC in 1962-63 and, in particular, the structural challenge they faced with capital formation/savings. It described how people with little private wealth must rely on resources such as their social networks. When an emergency arose, they would call on a network of friends and family to bail them out—and would be expected to contribute to bailing out others in turn. Under these circumstances, the classic American success story—an individual with great talent, ambition, and initiative who “escapes poverty” and adopts a middle class/wealthy lifestyle in a middle class/wealthy neighborhood—appears like a story of betrayal. The successful person’s family thinks, “We bailed you out when you needed it; now you’re taking your good fortune and hording it for yourself!” It’s not an irrational perspective.

Yet for people who live in that world, there is little incentive to work hard or save, because whatever you earn you are expected to share with your clan. This creates perverse incentives for the poor. Thus, people observed poor black men with little labor force participation, just hanging out at Tally’s Corner.

Note that this dynamic arises independent of social safety net programs. Indeed, to the extent that people know they have a social safety net to bail them out in a crises, they can then cut their ties to these informal mutual aid networks and begin capital formation/savings. But this change would never be complete, and would not occur all at once. So when you provide social safety net assistance to the poor, you’ll continue to see (some of) them sitting on street corners. And sure as God makes little green apples, you will find resentful people concluding that the social safety net programs are the CAUSE of this behavior.

Let me emphasize that I don’t know that social safety net programs have NO relationship to low labor force participation rates; indeed, I have seen evidence suggesting that they do have a marginal effect. But I like to see actual evidence on these questions—not ruminations—before I draw conclusions.

2. Wealth and corruption in social safety net programs

”If you have evidence of corruption, then we should focus on corruption…. But the mere fact that someone may have gotten rich while serving the poor rather than getting rich by serving the rich doesn’t bother me in the slightest. I don’t hold Sam Walton in contempt for making money catering to a working-class clientele.”

It is not the fact that someone has gotten rich that matters. It is that the conditions that allow rich people to get richer off of programs intended to help the poor end up, in the author’s own words ‘Defeat[ing] much of the purpose of wealth redistribution.’ If one is really concerned about helping the poor, one should be troubled that the effects of the program defeat the purpose of the program. One does not have to be against wealth to be skeptical of programs that claim to help the poor, but instead create ‘generations accustomed to dependency,’ and have effects that ‘defeat much of the purpose of wealth redistribution.’ Again, not an argument against such programs, but definitely a call to understand why this particular program went off the rails.

I suspect there is no difference in our perspectives—but a big difference in our points of emphasis.

First, let’s untangle a few things here. Imagine there were a social safety net program designed to distribute cash to poor people, but instead the administrators just burned the cash. Should we approve of this practice because, after all, no one is getting rich in the process? Obviously not. We still want the intended beneficiaries to derive the intended benefits.

The fact that someone might get derive wealth from stymieing the program is only relevant to the idea that this someone will have both motive and means to continue the practice—that is, it’s relevant to the issue of corruption. This is what prompted me to say, “If you have evidence of corruption, then we should focus on corruption.” But my focus is on the benefits and beneficiaries. I would like to see incompetent administrators retrained or removed, even if no one is getting rich. And if competent administrators are able to help the needy while getting rich at the same time, that’s the best-case scenario; it may help attract other competent administrators into the field.

I suspect the real point you wish to make is that social safety net programs can sometimes be administered in a corrupt manner. Yup—just like any other kind of program, public or private. Thus, in designing public (or private) policy, we should remember that nothing occurs with complete efficiency. But the fact that perfection is unattainable does not lead me to conclude that no efforts should ever be pursued. Corruption gives us cause for prudence, not paralysis.

3. Socialism

As a quick aside, perhaps you would be so kind as to give your definition of socialism, and explain how your reasoning regarding fire houses does not lead to the conclusion that all governments are socialist.

“so·cial·ism (noun): a political and economic theory of social organization that advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.” Google Dictionary.

Sounds about right to me. And I know of no government that does not engage in socialism. Likewise, I know of no society that does not engage in capitalism. Thus, people who gasp at the word “socialist” (or capitalist) are engaged in a moral panic over a bogyman. The issue we face is not whether to embrace socialism or capitalism, but how to pick the optimal mix of policies.

A UBI is not so different than Social Security payments or Alaska Permanent Fund dividends. We’ve lived with those policies for decades, and people have not devolved into “reefer madness” yet. We may well decide that we don’t want to adopt such a policy—but we shouldn’t do so merely because we let fear of a label overwhelm our capacity for critical thinking.

I rather doubt that the economic and humanitarian climate in Venezuela has anything to do with Dalmatians, fire engines, and ladder trucks.

Have you worked with Dalmatians? Do NOT underestimate their capacity for chaos. 101 Dalmatians should have been the title of a horror movie—with Cruella Da Ville as the hero. The more I hear about Venezuela, the more it sounds as if the place is being run by a pack of Dalmatians.

4. Potential conditions on a UBI

”Can you envision some specific condition that you think 1) would be sufficiently popular as to be adopted, 2) pass any constitutional challenge, yet 3) be unduly burdensome to liberty?”

[P]rohibition of firearms in public housing and drug testing welfare recipients.

Nice examples.

I have to wonder that some jurisdictions don’t already impose such conditions as a condition of receiving government aid. So, arguably, we could discuss the merits of these conditions independent of the merits of a UBI.

But just to focus the discussion: Let’s imagine that Congress was considering a UBI law that would impose these conditions on recipients, and that these conditions would pass constitutional muster. The only question before us is whether we’d prefer a world with a UBI having these conditions, or a world without a UBI. If your goal is promoting liberty—that is, granting people a greater capacity to exercise discretion in their lives—would more people gain greater discretion by being offered a UBI having these conditions (along with having some additional tax burden), or by having no UBI at all (and no additional tax burden)?

Well, rich people would probably not be welfare recipients (at least in the sense I suspect you mean), nor residents of public housing (ditto—I mean, sure, Trump lives in public housing, but that’s not what we’re talking about….), so the conditions would not burden them at all. Still, under a progressive tax structure, I’d expect that rich people would pay in more than they’d receive. So, unless rich people really cared about ensuring that everyone gets some minimum income (or had businesses that cater to people with lower incomes), I suspect that they’d experience a net loss of wealth, and thus discretion, due to the program.

However, because median income is lower than average income, I’d expect the UBI to generate more net financial winners than losers—with the understanding that [insert complicated discussion of dead weight social loss/social gains arising from taxation/wealth transfers here.] And because most of these people would also not be in public housing or welfare recipients, their net financial gain would not be offset by these constraints.

But what of people ON welfare, or IN public housing? If we really mean that the proposed conditions are CONDITIONAL on receiving a UBI, people who object to those conditions could simply decline to receive the payments and thus free themselves of the conditions. Sure, they’d still be subject to the UBI tax—but if they’re on welfare or in public housing, they probably aren’t paying a lot of income tax anyway. This leaves only one more group: people who are on welfare or in public housing, and who choose to receive the UBI payment even with the conditions. These people would presumably derive a net benefit from the program—or else they would have rejected the payments. Again, conceptually they’d be subject to the additional tax, but as a practical matter, probably not.

By my assessment, the policy would generate a net benefit to liberty. Your mileage may vary.

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nobody.really
on September 19, 2018 at 20:03:43 pm

nobody:

I'll respond only to a few of your comments and indirectly to Z's:

1) The issue of the rich deriving the majority of the benefit from programs intended to benefit the poor is simultaneously over and understated.
Over stated in that the number of such "rich" is far less than some would like to believe and the absolute value of that enrichment is also less than some would have us believe.
Understated (and I here I take editorial liberty to redefine "rich" to mean not Jeff Bezos wealth BUT middle class wealth). Those that are primarily enriched by these programs are the legions of civil service bureaucrats, who with their inordinately bountiful benefits, salaries (given the skills required), and this is especially true in Puerto Rico consume the majority of those tax dollars (or debt as in Puerto Rico) allocated for welfare / assistance programs.
2) As R. Richard repeatedly argues, *institutions* become *institutionalized* and soon embark upon objectives and deploy mechanisms / rules / policies not otherwise recognized under their originating mandate / purpose. As one "feeds the institutional beast" one also depletes the resources available for direct distribution to the poor. As institutional "interests" proliferate, such things as status, power, staffing may assume precedence over the originating mission. "Hey, kids, look at the empire I built."

3) #1 & #2 actually would indicate that a UBI of some form would be preferable and MORE efficient in dispensing funds to the poor. And were it not for the "deformations" in behavior / motivations, indeed in the very epistemology of recipients, UBI would be of some value.

4) "...I’d expect the UBI to generate more net financial winners than losers" And just precisely who (are you to) will decide who wins and loses? Upon what basis? other than, as Z alleges and you yourself seemingly applaud by your rather cavalier equating of a community funded Fire Department with, SOCIALISM."

"But in my neighborhood, people don’t get to choose whether they pay for the fire department; the payment is built into the tax structure, levied in proportion to the value of people’s property. Thereafter, people get the benefits of the fire department (or, at least, many of the benefits) at no incremental charge. More or less, people pay for the service based on their ability to pay, and they receive the service based on the extent of their need. THAT LOOKS LIKE SOCIALISM TO ME".

MY GAWD, EDITH! I do have to congratulate on your advanced skill as a "wordsmith." Overly clever, my friend, overly! Marx would be proud as you have so construed current capitalist economy's funding of Public Service units as to reflect Marx's rather (false) and quixotic notion of From each aaccording to his ability, to each according to his needs.

I bloody well ought to salute you for this rhetorical legerdemain.

And like many who propose and believe in the ultimate "refinement" of humanity, its growth into a truly *social* being, you also cavalierly dismiss the *impositions* to be placed upon the liberty of others - all this in pursuit of The Plan (to make all whole).

And as for people rejecting the UBI, yeah, REALLY. (Oops, I used your last name again.)
More seriously, how do you think the courts would rule when the State attempts to (further) dictate individual behavior.

Hey, how about this?
If you take UBI, you can not have any children. Then again, just a variation on a theme from China - you know that socialist utopia.

But i must once again applaud your *craftsmanship*.

BTW: You may want to read Devin Watkins reply to Mike Rappaport's essay on the 9th & 14th Amendments and the effect on Privileges and Immunities to imagine how our Black Robed masters may view any restrictions.

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gabe
on September 19, 2018 at 20:41:39 pm

Oops, forgot this: (now that I have had some good Merlot, I *may* be able to remember things - Ha!)

Nobody is repeatedly admonishing us that the "State" already intervenes and shapes behavior, and that this intervention is somewhat more substantive than is "nudging"; thus, we should not be "a-feared" that under UBI the State will "only' continue to "nudge" us toward what it perceives (decrees?) to be proper behavior.

At what point does this State intervention becomes burdensome? (and it is irrelevant whether or not some UBI'ers are willing to accept it).
And what point does it exceed that which is constitutionally permissible?
And at what point does it constitute a "transformation" of a regime, intended to be limited in scope and based upon certain liberty of thought, behavior and practice, to a regime of compulsion and strictly limited liberties?
At what point does it bear a striking resemblance to a more authoritarian and class society, bearing in mind, of course, that the prospective acolytes of the nobody's of the world will presume to be the ones dictating proper conduct. Of course, they will not view themselves as *nobodies* - that characterization will be left for the rest of us.

(BTW: I do not believe that nobody ACTUALLY believes much of what his digital pen has entrusted to binary bits).

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gabe
on September 20, 2018 at 00:07:50 am

- Can I ask, tell, indeed, command you to give up red wine if I am providing you with a monthly stipend?

- In your case, I expect the stipend to be PAID in red wine.

- [N]ow that I have had some good Merlot, I *may* be able to remember things....

HEY--you're supposed to be saving that for the stipend!

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nobody.really
on September 20, 2018 at 01:02:54 am

It occurs to me that if your take the approach of different professions to the problem of wealth distribution, you will likely get discrete perspectives.

A doctor will consider the desired state, the current state, make a diagnosis regarding why the current state differs from the desired state and provide a remedy.

An economist will look at the desired state and try to identify the incentives that will encourage development of that state.

A lawyer will identify the rules that affect operation of the current state and invoke those most advantageous to producing the desired state.

An engineer will consider the possible paths to go from the current state to the desired state and then design a process assuming the worst and to design around modes of failure.

A politician will look at the current state and calculate the way to maximize the political advantage in advertising the desired state, and instituting policies that are tuned to political concerns whether or not they achieve the desired state,

One of the interesting things about this thread is that there does not seem to be much disagreement that wealth distribution is in some degree desirable. A reasonable question is why is it desirable? What mechanisms produce social good by redistributing wealth? What is the optimum distribution of wealth, and why? What interests are going to demand consideration in any program to redistribute wealth? Given the empiric observation that failed wealth redistribution schemes can cause a lot of harm, maybe the engineering approach is the best one. Maybe the first question we should consider is"What could go wrong?"

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z9z99
on September 20, 2018 at 10:12:33 am

[T]here does not seem to be much disagreement that wealth distribution is in some degree desirable. A reasonable question is why is it desirable?

Diminishing marginal return.

We observe this in the human senses: If you light a match in a pitch black stadium, even people in the furthest seats will see it. If you light a match in an open-air stadium on a sunny day, almost no one will see it. Our sensitivity to light is not proportional to its presence, but seems to increases on a logarithmic scale based upon light’s scarcity. Likewise with many other stimuli. (But curiously, even ample exposure does not cause us to become acclimated to pain, loud noises, or clinical depression.)

Economists observe a similar (if not always logarithmic) relationship with investments. If a farmer is going to put one acre under cultivation, she’ll pick the one for which she expects the best returns. If she’s going to cultivate a second acre, she’ll pick the one for which she expects the second-best returns—which, by definition, will have expected returns lower than the first acre. And so on.

Economic theorists postulate that the same occurs with consumption: You really value the dollar that you spend on that life-saving medicine. The dollar that you spend watching Mamma Mia for the 15th time—not as much. The return on the investment diminishes.

Thinking Fast and Slow reviews the research on people’s reporting of experienced (real-time) satisfaction, and of retrospective satisfaction, sorted by wealth. People’s report of their real-time satisfaction tends to max out in households earning $75K/yr., and plateau thereafter. (I don’t recall the date of the studies generating this result, so we might need to adjust for some inflation). Yet people with higher incomes continue to report higher retrospective satisfaction: Arguably, people regard high income as a status marker, and will therefore feel satisfaction with it when this fact is called to mind, but not during their moment-to-moment life.

Arguably we could achieve greater social well-being by shifting more dollars from people with diminished marginal returns on consumption to people without diminished marginal returns on consumption—roughly, from rich to poor. Yes, rich people will not like this—but if the greatest part of their satisfaction comes from status, and if all rich people are effected equally, then they will experience little loss of status relative to their peers—and peer groups are the basis upon which we measure status. (See my discussion of Habitat for Humanity homes, above.)

Given the empiric observation that failed wealth redistribution schemes can cause a lot of harm, maybe the engineering approach is the best one. Maybe the first question we should consider is” What could go wrong?”

See the French, Russian, and Chinese revolutions. See various riots that have occurred in the US over the years. See the US’s bizarrely high infant mortality rate. See the rise of populism and tribalism throughout the developed world. See the rise of suicides and drug overdoses. Arguably, THOSE are things that can go wrong—and are going wrong.

I don’t mean to deny that change involves risk. But the status quo involves risk, too. Admittedly, the status quo isn’t uniformly risky to all. It was not MY child at big risk for infant mortality, nor MY neighborhood at big risk for going up in smoke, so it’s easy for me to dismiss those risks. But if it WERE my kid and my neighborhood at stake, I suspect I’d make a different calculation.

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nobody.really
on September 27, 2018 at 19:53:07 pm

"...under UBI one could conceivably come to believe that EVERYTHING is FREE."

Actually, no.

You still would have a limited amount of currency. You would still have to make choices about how to deploy your resources.

There are people who retire, and live off the interest generated. That money "magically appears" in their account, but I don't see them blowing it like it's House Money.

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Ike

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