Universal Basic Income – an exercise in fencesitting

Cover photo credit: James Cridland.

On June 6th, the Swiss rejected Universal Basic Income (UBI) in a referendum by an overwhelming margin of 77 to 23 %, which I publicly predicted on reddit weeks ago based on intimate knowledge of the Swiss work ethic (and got downvoted to the devil’s asshole for it by /r/futurology‘s communist youth).

So, let’s talk about UBI.

Now, uncharacteristically for an internet article, I don’t have a predecided conclusion in mind. I’m going to argue with myself, and I’ll raise counterpoints to my own points. Anybody who confidently predicts the outcomes of imaginary scenarios is insane. So let’s treat this as an exploration, rather than a final answer.

The main questions are:

  • Is it necessary?
  • Is it affordable?
  • What would happen in the long term? Especially moral, cultural, psychological effects? I.e., is it desirable?

Let’s do it with lists. Everybody loves lists.

Against

Any universal increase becomes the new baseline

The extra income is immediately priced into rents and costs of basic goods, and the only result is a bit of inflation. A particularly stupid government could try to counter that with price controls, which is one of those policies that go excellently everywhere they’re tried.

Counterpoint: Hey, rich world central banks have been chasing inflation in vain for years. A bit of it would look good to them.*

*Counter-counterpoint: because they’re stuck in the 1930s and failed to notice the nature of economic growth today is deflationary – i.e. efficiency gains. While inflation would look good to central banks, that doesn’t make it good in practice, and they would be succumbing to cargo cult thinking.

People take it for granted two seconds after implementation

One of the deepest tragedies of human psychology is that new things that were marvelous and cherished become barely tolerable outrages within seconds.

Soon enough, it won’t be enough. Which leads to:

Instant political pressure to raise UBI

This is a problem in even the most fiscally optimistic scenarios, because:

Even if fiscally affordable, UBI carries huge opportunity costs

UBI equals reallocation of vast sums to consumption. It means spending less – much less – on infrastructure, science, defense, healthcare, education. Are we sure it is the best possible use of resources? Would UBI supporters be happy to receive a bit of pocket money at the price of worse public healthcare? There are no free lunches. Is a lunch paid out of, say, the nation’s school budget a good deal?

But fiscal affordability is a huge “if”

Keep in mind the political pressure to raise the amount would be overwhelming and constant. At least if human nature is still what it was last time I checked. If there’s one thing people love more than free stuff, it’s more free stuff. And instant gratification trumps long-term optimization.

Unlike old age pensions, disability benefits and other existing welfare payments, which are limited to relatively small and easily outvoted groups, UBI would cover everybody, and proposals to increase it would enjoy broad support.

A potential solution to the slippery slope problem would be indexing the stipend to economic growth or average wages. But both indicators are gameable. Short-term economic growth can be rigged at the expense of the future – just borrow a shitton of money and spend it all over the place, as per Keynes. And higher average wages can be politically mandated at the expense of overall productivity and future prosperity. That doesn’t sound like progress.

Both policies are already in some form on the program of every left-of-center party in the world, and it is reasonable to assume the more radical elements would jump at the chance to use UBI as a trojan horse to break the economy and necessitate total government control – something that was openly suggested in a 1986 paper “The capitalist road to communism“. It’s useful to keep this in mind.

At this juncture, I’m in the unenviable position of having to publicly contradict a guy I immensely respect. Y-combinator’s Sam Altman tweeted: “Basic income is not socialism. Basic income provides a floor, and then people can get as rich as they want“. His rather unique situation as a Silicon Valley venture capitalist might make it hard to see some of the nuances, so here goes:

1) That’s literally the definition of social democracy. UBI is a redistribution-based safety net with an egalitarian underlying reasoning. Of course it is (a form of) socialism. I withhold judgment on whether that’s a bad thing, but terminological rigor compels me to make this super clear. Maybe he meant it is not communism, which is true enough (for now).

2) Getting rich is not as easy Mr. Altman made it sound, and UBI would make it more difficult still. The level of taxation necessary to finance it in a country like the United States is at irreconcilable odds with “people getting as rich as they want”. People trying to get richer would face heavy headwinds. Perhaps not in Mr. Altman’s world of venture capitalism, where taxes are a final score reduction without imposing significant drag on growth and operations, but certainly in the world most people and businesses live in.

I fully appreciate that tech (which doesn’t equal mobile apps) is where the future is, but that doesn’t mean we can afford to ignore or dismiss problems that venture capitalists do not feel as much as the backwards dupes making medicines, food, clothes, houses and the like. And I say this as a tech startup co-founder.

3) “The floor” is sloped, and looks slippery. Once there is a stipend of any size, a lucrative populist political platform immediately pops up in promising to increase it. Demand for free stuff will always exceed supply. Then politicians can either yield and bankrupt the state, or take on the role of a strict parent mitigating and frustrating people’s appetite for freebies. Two very bad ends for democracy, of which the former is far more likely.

The tendency of idleness to promote craziness

The necessity to secure a living by personal effort is the main mooring keeping most people anchored at least vaguely to reality.

The examples of every idle class in history conclusively show that easy sustenance coupled with copious free time is a reliable recipe for mass madness – Athenian aristocracy inventing fascist cults, theocratic islamic royals, the nomenklatura of every totalitarian state, Victorian gentry indulging spiritism and card reading, campus activism, groups of concerned moms against vaccinations and GMOs, and general “I’m bored, let’s get carried away by some escapist fantasy, and optionally try to break civilization” asshatery.

We’re already seeing some bad cases of collective hysteria, sectarianism and balkanization on the internet, and without the need to interact with reality to secure a living, I guaranfuckingtee people will get even more creative and adamantly resolved at careening off into lala-land.

Look at the bored middle classes with their gluten free unvaccinated organic yoga, look at tumblr’s microcosm where everybody is a self-identified transsexual lesbian weredragon, and now imagine an order of magnitude more of them, and stupider, and able to do it full time, because the affordability of being an Idle Idiot with Ideas* (with the acronym serendipitously pronounced “ayayay”) will trickle down the entire social ladder.

*Alternately I propose the term “bored idiot with too much time on hands”, or “BIWT”. If 21st century sociology plans to have any claim to relevance, it will have to formally recognize and study them as a class. I’m super serious. Of course it is free to stay true to form and invent a non-offensive euphemism that will miss the point.

In numbers, they will find reassurance and righteousness. We’ll face fucking crusades of insane people who brainwashed themselves in some echo chamber. For the love of fuck, we already are facing them.

Taking away the strongest motivation for rationality (necessity), every romantic superstitious fantasy will be enthusiastically indulged by the bored unnecessariat.

The abandonment of reason by the idle is escapism from the meaningless existence and boredom of a caged (though fed) animal.

The catalyst of buying into ever stupider bullshit seems to be desensitization and thrill seeking – like a virginal porn addict who needs increasingly bizarre material to feel any excitement.

Unless accompanied by a massive cultural shift towards critical thinking and open debate, UBI would have a devastating effect on the already worrying condition of the public mind (though when has it been anything but worrying), and threaten to catalyze an anti-Enlightenment reaction not seen since the 1930s.

Any UBI scheme must be accompanied by a robust strenghtening of the position of science in society, and it’s protection against pseudoscientific incursion, while not succumbing to close-minded dogmatism, either. A fine balancing act, the key to which is focusing on the scientific method, rather than any particular theory or canon.

One more reason why the pressure to restrain free speech is dangerous. It’s trying to shut down the immune system just as we are about to enter a tropical swamp. The trend towards idleness-and-internet-induced insanity is happening anyway, but UBI would mean rolling in the swamp naked, with an open mouth, eagerly licking the most colourful inhabitants.

Increased pressures on science and challenges to it’s legitimacy are to be expected, and are indeed already happening (not least from within).

If mass idleness becomes affordable and tolerated, there’ll be a profusion of movements and new tribes, good and bad.

A period of wild intellectual mutation and new movements already happened in late antiquity. It ended badly for the proto-scientists of the day. The result was, give or take a few decades, a lost millenium. Standards of life of a late Roman peasant and his Renaissance-era counterpart were hardly different, and if so, then in favour of the Roman. That’s a repulsive precedent, and all means must be applied to prevent the rise of some sort of new religious movement or authoritarian ideology (or worst case scenario, a mixture of the two), in what would amount to a counter-revolution against the Enlightenment.

Incidentally, an early form of UBI was tried by the Romans: free bread for all citizens, and tickets to the circus.

Counterpoint: UBI would definitely bring an increase of unorthodox thinking, which however is not identical with craziness. Unorthodox is good. Unexamined, uncritically indulged unorthodox is bad. Also, the tendency to psychosis could be offset by UBI’s benefits to parenting and therefore child development, as will be discussed in the “for” part, resulting in better adjusted adults naturally resistant to crazy.

There are different kinds of original thinking, and the best seems to be the product of ambition and a certain hunger (Elon Musk, Steve Jobs). The kinds based on lazy musing beneath a fig (or money) tree, as far as my statistical sample (i.e. human history) extends, were mostly pretty bad.

The imbecillic hivemind of the internet is going to get worse before it gets better.

Also, while there is a clear link between idleness and eccentricity (hey, who isn’t eccentric), the direction is less clear – perhaps eccentric people gravitate towards non-contributing lifestyles. It is a legitimate question whether idleness made the hippie, or the hippie made the idleness. However, at any rate, there is a feedback loop, and people who are inundated in one do tend to develop the other too.

Another objection is that the crazies already are mostly idle anyway, and UBI wouldn’t really change much – delusional bullshit with a frequent compensatory function is largely the prerogative of the very young and the very old, and those stuck in life’s stagnant eddies inbetween. The granting of a bit of unconditional income on all citizens would not have a negative effect on the mental health or ability to reason of most of them. An objection to that objection (ahem) is that it would anyway vastly enable the existing crazies. Even without an increase in membership, there would be an increase in visibility and virulence.

Increasing inequality

This may sound paradoxical to the people who think of UBI as a solution to inequality, but it makes perfect sense. In an UBI scheme, the remaining productive workers must by definition have vastly outsized contributions to support everyone else. They either keep a substantial part of that wealth, or have most of it taken away for redistribution. The first leads to inequality on a scale unimaginable today. The latter to incentives stacked in favor of joining the ranks of the idle, which is a feedback loop. Sure, there is a deep need in human beings to do stuff, but that stuff is not always aligned with other people’s needs. That’s why we invented capitalism.

Slipping standards of what counts as productivity

Already we have people who think talking about photographs counts as contributing to society. It doesn’t. UBI would make the tendency to mistake advanced forms of parasitism for work, and the blurring of the line between activity and productivity, worse.

For

Robots are going to take our jobs

Counterpoint: Maybe, but they haven’t yet. In a rare moment of the sort of good writing that once defined it, The Economist made excellent arguments on this topic. All industrial revolutions in history have created more and better jobs than they destroyed, a trend visible even today. Artificial intelligence may someday render human labor redundant, but that’s not what’s happening today, and it probably won’t happen for decades, if ever.

Such notions of a “post-work world” universally underestimate two things: the scope and amount of future humans’ needs and desires, and human inventiveness and entrepreneurship in coming up with new ways to be useful to others.

In this context, UBI looks like a ruinously expensive remedy to a problem that has not yet occured, and it is unclear if it ever will.

Increased loyalty to society

Counterpoint: but also increased dependence. The implications of every citizen becoming a retainer of the state are worrying. Also, take a minute to appreciate the interplay of UBI with mass immigration.

More time for raising kids

This is probably the best argument for. The lack of proper childrearing is the root of every social problem. Fix this, and we fix everything. No counterpoint.

Easier access to education

This is in principle true – UBI would extend unworried access to learning to virtually everybody. And to get the good jobs in the new economy, people will need top-shelf skills. This means a lot of time spent learning.

Counterpoint: skills that formal state education is unprepared or incapable of providing in many cases, while self-education, lifelong learning and MOOCs will become a massive, massive thing among people who want to do well. Incidentally, those things are free.

It is probably a good idea to separate the idea of education from listening to a regressive cartel of ex-flower children for a couple of years while picking up six figure debt.

People want free stuff

Me too. But it isn’t really an argument. Most pro-UBI campaigning seems to be self-serving bullshit wrapped around greed.

Welfare structures can be greatly simplified

There is an argument there. In terms of efficiency gains, we are told UBI might even pay for itself. That’s economically implausible, but any streamlining of welfare is welcome. Unless we end up paying for both UBI and traditional welfare schemes, which is what would happen in Europe (imagine trying to scrap the entire entitlements edifice in, say, France).

It may give people security and peace of mind to pursue ambitious projects, and lead to a boom of entrepreneurial activity

Ah yes, the notion of risk-free entrepreneurship. Or it might murder entrepreneurial dynamism by taking away both a substantial portion of the carrot, and the entirety of the stick.

The problem is that ambitious projects are rarely products of peace of mind. The really good stuff happens in “Shit shit shit!” moments, which UBI is explicitly meant to remove from human experience.

The danger appears quite pronounced of turning us into one of those blessed islander cultures that never moved beyond the javelin, because sustenance was copious and easy.

The “Here’s some pocket money, now fuck off and let the grownups work” paradigm

And here we are at the heart of the for-UBI arguments coming from people with actual incomes. Underlying the argument is the notion that a large portion of the population is irredeemably useless, and the best we can do is give them a bit of money and send them off to play. This feels plausible. Yet there is a certain unpleasant elitist twinge to the idea.

I often say that I’m more idealist than the idealists, because unlike their caste-based totalitarianism, I believe that virtually everybody can be enlightened, enabled, uplifted. I believe in humanity, and I recoil at the idea of simply declaring tens of percent of the population ballast.

That being said, as long as there are people in useless jobs, it would probably be cheaper to pay them to stay home than to make up time-wasting bureaucratic pseudo-jobs to occupy them.

If the bureaucracy that eats 40% of my income just shuts up and takes my money, with emphasis on shuts up, and stops inventing excuses to employ barely lucid idiots to inundate the remaining grand total of fifteen productive people in Europe with pointless paperwork, it’s a win. Sure it can be interpreted as a protection racket, but that’s the social contract we’ve had for decades.

And this has been the western social model for a generation – hide real costs of welfare by outsourcing it to the private sector by means of overregulation, forcing the staffing of various non-contributing paper-shuffling departments with legions of otherwise unemployable dipshits, whose sole function is to make it more difficult for everyone else to get real work done.

Even if it means paying an extra couple percent in taxes, if it makes the witless wastes of carbon with clipboards sod off, I would call it a win.

However, I think the people doing those jobs are not at fault, but being failed, and that UBI as an affirmation of their uselessness would fail them further.

I think the proper solution is to make sure they have more real opportunities, which includes introducing the notion that being a good plumber is better and more respectable than being a shitty quality systems auditor.

Hmm

In the process of writing this (and thereby sorting my own ideas), I actually arrived at a pretty firm conclusion.

The main argument for UBI is that humans will soon become unemployable, which is clearly bullshit. This means the condition of necessity is not met. And since UBI would entail a radical redrawing of the social contract, it is a relatively high-risk proposition probably best left on ice until (unless) necessary. Affordability and sustainability are obviously problematic due to opportunity costs and slippery slope issues. And desirability – the aggregate long term impact – is a mixed bag full of unknowns, with some pretty dangerous possibilities (though also many attractive ones).

But – I am not rejecting the idea. Nobody is smart enough to predict the full effects of untested policies, and even the very wise cannot see all ends (thanks, Gandalf).

Let’s have experiments. If Finland wants to try it, by all means let them. I’m super curious.

Which brings us to one last important point. Culture matters. A lot. Free money would go differently in Finland and in Greece.

Trying it in a prosperous nordic nice-o-cracy is a great choice for a proof-of-concept. If it works in Finland, it won’t necessarily work elsewhere. But if it doesn’t work in Finland, it probably won’t work anywhere else either.

There’s a solid chance of it happening in the future – but the present changes are not yet on a scale that would justify it, and in it’s present form, it appears to be another wet dream from the usual quarters. If, in the future, it becomes necessary, it is still advisable to keep people engaged, or face social disintegration, second-class citizenship, and on long-enough timescales, even divergent evolution.

I prefer a world where nothing is guaranteed, but it is super easy for anyone willing to make a good living. That’s why we’re working on a startup to enable people to do just this on a massive scale. Readers here will be among the first invited.

Ultimately, UBI suffers from the essential paradox of all socialism – the only societies that can afford it are the ones that don’t need it.


Think universal basic income is good? Prove it.

  • Marcia Dias

    As a citizen of a third world country with no welfare, I see the idea of UBI as something so good that I can’t even imagine how it would be to live in a place where people wouldn’t need to enslave themselves in horrible jobs just to have something to eat.

    Although, in my country, the mere idea of a welfare state is frowned upon because too many people would prefer to live under it than work, considering the low minimum wage we have and the lack of opportunities for people to study and get a decent job.

    But I see this is not a third-world concern only, I have friends from the USA and even nordic countries and they all show the same concern: there are too many people already living thru welfare and refusing to work. To the point of some countries face scarce of workforce.
    And those who work are the ones paying the bill in the end, right?
    It leads to the increase of xenophobia and ultra right wing ideologies.

    So for me, a complete outsider, the idea of UBI is nothing but fair. You give the minimum so you cover the basic for the entire population… Now they need to work for luxury.
    It sounds like socialism, I agree with you on that. But a type of socialism that can work, since we are in a capitalist world, people do want the luxury goods. And if they are happy with a mediocre life, at least they have their human rights preserved.
    Maybe if you also raise some kind of importation taxes and starts protectionism for national companies, you can increase the need of science and technology development inside the country. If people can’t buy cheap luxury goods from poor countries, they will have to make themselves or not have at all.

    And also, keep free education only for useful stuff. If you want to be a doctor or electrician, that’s fine. But if you want to study the literature of French monks in the 13th century you have to pay for it.

    It solves the idle people problem and, maybe for the first time, a rich country will finally have its subsistence without the need to take advantage of poor workers in peripheral countries.

    • androskci veloski

      mimimimi