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OrphanWilde comments on Stupid questions thread, October 2015 - Less Wrong
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The goal of a UBI isn't necessarily to eliminate poverty - which, given that poverty is relative, is impossible anyways - but rather to shift welfare from a complex set of rules with many hazards and pitfalls to a simple set of rules with few if any, while simultaneously permitting a simplification and flattening of the tax system without disproportionate adverse effects on the poor.
I get the impression that some people, including on rationalist tumblrsphere, do think a UBI will eliminate (or at least severely reduce) poverty.
Though it occurs to me that that's quite likely an oversimplification of their views. So I'm also interested in clarification on what people think the effects of UBI on poverty will be.
Well, UBI will probably eliminate poverty for some definition of "poverty", and not for the new one which will appear soon afterwards. Some people will keep updating the definition to mean "below the (new) average".
But if we taboo the word, we can hope that UBI will remove e.g. starvation. And it will be done without having to employ a greater army of bureaucrats. Maybe the money saved on the unnecessary paperwork will be a significant fraction of the costs for removing starvation.
So if you give me a budget and ask me whether I would rather spend it paying people to create and process unnecessary paperwork or feeding people who starve, I guess the answer is obvious for most people, regardless of their other political opinions.
(Okay, some people would call it a false dilemma, and say we should neither feed the hungry nor pay the bureaucrats, but use the money in some other way; maybe not even collect it. But when you take into account the mainstream opinion, and what choices are realistic, this one is an obvious improvement. Well, depending on technical details, of course.)
The core question is whether you pay burocrats to keep taps on whether the people who starve write job applications and attempt to get in work or whether you don't require people to apply for work.
What exactly happens when a bureaucrat tells you: "you will only get money if you can prove me you try to apply for a work"?
If you really want the money and don't want a job, you can go to a job interview and make a really bad impression. Like, wear some old smelly clothes, pretend to be slightly retarded or drunk. They will reject you on the spot, and then you can go to the bureaucrat and give them a certificate that you applied for a job but were rejected. Doing this once in a month is more or less what they require from you to keep the money flowing.
The only people who get punished by the system are those who play fair. Ironically, the less time you spend unemployed, the less likely you are to get the unemployment benefits if it happens to you, because you don't know how to play the game. Also, your education works against you, because the better education and work experience you have, the less credible it seems that you can't find a job.
The system's goal -- at least the official, declared goal -- is to get people off welfare and into jobs. Therefore if the system forces someone into a job, it counts as a success.
If you just want to keep on receiving free money, your goals are in opposition to the goals of the system -- you are adversaries. In this context, I'm not sure what "playing fair" means. In an adversarial situation if you play by your opponent's rules, you will lose.
But what if that's an unrealistic goal. The whole point of UBI is that it's a lot easier to get people into jobs if you let them keep their 'welfare' at the same time, albeit with some phase-out. (I.e. the people who are actually getting money on net are those with low-value jobs)
I don't understand what that means. You'll never be able to get everyone off unemployment into a job; you'll surely be able to get some people off unemployment into a job.
This is entirely not obvious to me, given that the motivation to go get a job will be less.
Given the way welfare is set up in the US right now, I'd argue, quite strongly, that the motivation to go get a job would be more, given, under many circumstances, that you have to reach upper-middle class levels of income before you reach the same standard of living achievable on welfare. (I'm a staunch libertarian, mind. UBI isn't my ideal, far from it, but it's a hell of a lot better than what we have right now.)
I strongly recommend anybody opposing the UBI on general principle grounds run a google search on "Welfare Cliff", and research exactly how terrible the existing system is. Don't let the perfect be the enemy of the better.
Yup. Much of the advocacy for UBI can be rephrased as "let's get rid of welfare cliffs!" given that mostly any sane (cliff-less) welfare system can be rephrased as a UBI plus a marginal tax/phaseout schedule. (Sometimes these are dependent on other factors like the presence of children, but you could also account for such variations in a UBI-based system if you really wanted to.)
Not sure what you mean. If you can have a paying job and some of your 'welfare' on top of it, the incentive is obviously greater than if getting a paying job meant giving up all welfare. This matters, especially for low-paying jobs which are the kinds welfare recipients are most likely to get.
Not at all. If the UBI is meaningfully large (there is really no point in something like $100/month), you would be able to live on it. If you can live on UBI, the incentive to find a job is less because the alternatives are MUCH more pleasant.
The carrot is slightly larger, but the stick becomes almost non-existent.
There are factors pointing both ways here. If getting a job means giving up benefits for the unemployed, or means-tested welfare that you'll become ineligible for, that's a disincentive to get a job. But utility isn't linear in money, and so a job paying N dollars will always be more attractive to someone making zero dollars than the same job is to someone on UBI worth K dollars -- and increasingly so the higher K is. That's also a disincentive.
Which of these disincentives is bigger depends on the sizes of N and K and the specifics of the welfare system. I think I'd usually expect the incentive landscape on the margins to be friendlier under UBI, but it's by no means a certainty.
The only people, out of the people who act optimally, who get punished by the system are those who play fair.
Many people don't act optimally. The type of person who doesn't want a job is likely to be lazy in a general manner, which will also lead him to not go to interviews at all rather than go to them drunk. Going to an interview drunk in order to keep the money coming in is psychologically difficult to such people for the same reason that actually getting a job is--they act based on a very short time horizon and really don't want to be doing something that is immediately distasteful for a benefit slightly later.
You have oversimplified to uselessness.
A common counter-example is people who do not want this job, for example because it pays less than their current lifestyle costs to support. It isn't lazy, it is making the smart economic decision.
You are also assuming that the trouble of traveling to and from an interview is where the stress and effort lies. I would only credit that as the case if they had a high-demand skill set and were traveling across the country for the in-person interview, which is highly unlikely to apply to someone drawing unemployment benefits. The stress and effort stems from preparation before and performance during an interview, neither of which apply if the goal is to fail at it.
A counterexample is useful to rebut a generalization. But I didn't say that all people who are punished are people who don't play fair; I said that some people who are punished are people who don't play fair. You can't use a counterexample against a point which says "there are some examples of X"; it's perfectly consistent for there to be some examples, and some other cases that are not examples.
I am assuming that that stress is enough to discourage some lazy people. It needn't be a large percentage of the total stress to discourage lazy people; it could be that deliberately failing an interview is only 10% of the stress of a normal interview, but a sufficiently lazy person is unwilling to undergo even 10%.
Ah - I appear to have misread your comment, then.
Would I be correct in limiting my reading of your remarks to rebutting the generalization you quoted?
There is no starvation in Western countries.
Well, there is some. A better way to put this is something like "there is no starvation left that could be treated by government programs."
So you are saying that there is no starvation that could be treated by government programs, but there is starvation that could be eliminated by UBI?
Errr....
Would UBI be a government program?
I was taking your overbroad and incorrect claim--that no one in Western countries starves--and replacing it with a narrowly targeted claim--that there is no starvation left that can be fixed by government programs. The last time I looked, most starvation was caused by negligence on the part of legal guardians, deliberate self-harm (as in anorexia), or being out of the system (many homeless people have difficulty collecting food stamps). But all three of these issues will still be problems under UBI, and all three of them are being approached by specialized programs that are probably about as effective as one can expect a government program to be.
What other alternatives are there?
Nothing like adding a bit of straw to, erm, fill out the opponent's argument :-P I, of course, did not say "no one". I said "there is no starvation" which, given that we're discussing social programs in the context of society-wide policy proposals like the UBI, means that there is no starvation as a social issue in the West, in particular one which the UBI might fix.
In the same sense I feel justified in saying that there is no slavery in the West, even though I'm sure some individuals are effectively slaves. The social-policy context and the nit-picking context are different.
So, I'll stick with my claim and continue to consider it narrow enough to be correct. Constructing straw extensions to make it incorrect is, of course, always possible.
Certain altcoins, like uCoin, purport to be a kind of currency with built in nongovernmental UBI.
Huh? UBI is, basically, an unconditional grant of economic value. Moreover, it's guaranteed to be there next month. You don't get to create economic value out of thin air (and guarantee it will be there next month) just by making another altcoin.
UBI means every citizen gets a sum of money in their account each month. Current government programs means people need to jump through multiple hoops in order to get food. I don't think UBI is a panacea, but I don't think it's a stretch to say it'll reach people who aren't being helped by the current welfare systems.
Not perfectly true in Britain, as far as I can tell. Families are using food banks in masses, and one kid got scurvy as I recall.
And also to stimulate consumption and thus economy.
That line of reasoning falls somewhere between the worst elements of Reaganomics and Keynesian economics. It's wishful thinking about something somebody already supports.
It seems reasonable to me that the marginal spending of money given to those of low incomes will be higher than the marginal spending of money given to those of high incomes.
And if we mandated by law that all durable products be slightly less durable than they are now, more people would be employed replacing or repairing the damaged old ones, and demand for labor would rise, and wages would rise, and we could make products even less durable. There's no limit to the prosperity we could achieve.
That value you're trying to maximize? You might want to consider what it's measuring, before you try to maximize it.
OK, I admit that maybe I did pass on this lore too quickly. It was one bit I took away from a discussion about basic income grants some time ago. But I can't find evidence for it online. The evidence I can find seems to argue against it (except the dubious Nigeria case) but then all evidence also includes assumptions about labour supply and demand that do not seem to hold in an age of machine mass production.
That seems like a lot of conclusions to be drawing about Gunnar_Zarncke's thinking, on the basis of very slender evidence. Would you care to unpack your own reasoning a bit?
The first question you should ask is whether or not consumption should be stimulated. This "stimulation" concept is where Reagonomics and Keynesian economics collide - the idea that the macro economy's ideal (efficient?) state is higher than what it currently is, and needs to be adjusted. It's worth noting that profit is the difference between consumption and production - in a generalized sense, and also in the trivial sense of mere net flow of dollars. What does stimulated consumption do? What does profit mean, on a global scale?
The second question is whether consumption can be stimulated.
Those are very reasonable questions, but how do you get from asking those questions to concluding that Gunnar_Zarncke is engaging in reasoning "somewhere between the worst elements of Reaganomics and Keynesian economics" and in "wishful thinking"?
It's true (as I understand it) that Reaganomics and Keynesian economics both tend to approve of "stimulus" to the economy. That seems like a quite different (and much weaker) claim than that approving of economic stimulus partakes of the worst of those two views of economics.
In case you didn't gather, I consider the "stimulus" aspect (and the related ideas) to be the major problem with those two economic views. If the answer to the question of whether stimulus is a good idea is "No" - a question neither school of economics truly addresses, assuming the answer to be "Yes" - and both schools of economics fall apart.
Yes, I understand that. What I don't understand is how you get from "Gunnar approves of economic stimulus and I don't" to "Gunnar is engaging in wishful thinking". Nor for that matter why you pick out Keynesian and Reaganite economics in particular, since so far as I can tell liking the idea of economic stimulus is pretty much universal. (Though clearly you don't share it.)
I don't think Gunnar is doing either of those things, and didn't when I wrote that. I said the idea exhibits those properties.
Wishful thinking is (necessarily) a thing people do, not a properties of ideas themselves. But I take it what you mean is that when you wrote, in response to Gunnar's comment, "That line of reasoning falls somewhere between the worst elements of Reaganomics and Keynesian economics. It's wishful thinking about something somebody already supports." you meant not that Gunnar in particular was engaging in wishful thinking, but that ... some unspecified other people advocating UBI for the sake of economic stimulus are engaging in wishful thinking.
Fair enough. It might have been worth making it clearer, but of course hindsight is always 20/20.