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If definition was so important to me, I could argue with you what unconditional really means and if the unsupervised Uganda program falls under the definition of UBI even when it’s only granted to applicants with a valid proposal. But I give up, you win. And I don’t have to defend Britannica, because it’s so well established.
I don’t deny that many, maybe the majority, view UBI as unconditional. But to say ALL define UBI this way is a really strong statement, do you have any proof?
Here an example I found on Britannica:
Uganda’s UBI trial, the Youth Opportunities Program, enabled participants to invest in skills training as well as tools and materials, resulting in an increase of business assets by 57%, work hours by 17%, and earnings by 38%.
Christopher Blattman et al., “Generating Skilled Self-Employment in Developing Countries: Experimental Evidence from Uganda,” ssrn.com, Nov. 14, 2013
Link: https://www.britannica.com/procon/universal-basic-income-UBI-debate
It doesn’t make sense to argue about definitions. If you define UBI so, then so does UBI mean for you. I’m actively pushing for a redefinition of UBI, or reshaping the policy as I said, because I thinks it’s the right thing to do.
Did I reply in so perfect English that it sounded like corrected by ChatGPT? Cheer to my English, which has improved so much! 🥂
Thank you for the explanation.
By actively co-shaping UBI, businesses can make it more effective and efficient, by training the reserve workforce in the way needed by the economy, with more cost control. Of course, if businesses prefer to pay tax and let government do it, it’s also OK, can even be more efficient if businesses trust the expertise of the government. It’s analogous to when consumers buy from businesses, it’s always more efficient to have the specialized companies produce everything, but we also observe DIY projects and it’s good that they are not forbidden. If you DIY something, you can gain knowledge and better discern good products from bad ones, so you can make informed purchases. By doing DIY, you can better understand the effort made by companies and why they deserve to be paid. And if some companies misuse their expertise and charge too much from you, you can have DIY as fall-back option. Analogously, it’s a good idea to let business and other tax payers have the possibility to participate in design of political programs like UBI, although they can certainly opt for paying tax and letting government do everything, although I think it’s a good idea that the government consults businesses and other stake holders to make the UBI more aligned with the need of the society.
As much as I know, UBI isn’t a real policy yet, it’s not yet determined how much UBI everyone should get, whether it’s paid out in dollars or vouchers for training programs or other things, whether the amount everyone gets should depend on their personal effort etc. Thus, I used UBI as an abstract, philosophical term capturing the promise of society to support individuals in need, and I personally think this support should also contain incentives for the recipients to improve themselves, and if UBI is realized, it’s also recommendable to have a good coordination with other existing benefits, training programs, philanthropic supports, etc, lest someone get less than others merely because they are covered by less support.
That UBI can generate a stable consumer base for businesses is well known, but coupled with training programs, it can also support a reserve workforce pool. The market only dictates layoff during economic downturn and re-hiring during recovery, but does nothing for the time in between, where part of the workforce, if lacking proper support, may drift off and be lost to mental problems, alcohol/drug problems, or radicalized. So when business starts to rehire, it can be hard for them to find qualified staff. If you take this into account, it can even save cost by maintaining and supporting a reserve workforce during the downturn, because it makes it easier for businesses to find qualified workers, but also suppliers, once the economy recovers. So with reserve workforce I don’t only mean potential salary takers, but also self-employed like Uber drivers, or startup founders who deliver services and products.
I’m personally responsible for every point in my post, not ChatGPT. While I can conceive some don’t like ChatGPT, I don’t understand what’s the purpose of human written comments if you use exactly the same phrases as Kennaway: “something ChatGPT might right”, etc.
I have genuine belief in what I published. This post is a call to the business to actively co-shape UBI instead of passively rejecting it. Whoever pays, has accordingly more say, like if Microsoft co-finances UBI, it can ask UBI recipients to learn its online courses and make certificates, so when the economy recovers and Microsoft again wants to hire more people, it can more easily find qualified staff. I don’t know what other companies may want, but in general if you don’t participate in the financing, you also have no say.
Yes, I used ChatGPT to polish the English, it did a great job 👍 while I am of course myself responsible for every point in this post.
To your comments:
This post points out that it’s better for the business to actively co-shape UBI instead of passively rejecting it. For humanitarian reasons, it’s good to ensure the existential minimum for everyone, even those too old or too sick to learn or work. If this minimum is already covered by other governmental programs or philanthropic organizations, there’s no need to include it in UBI. If business co-shape UBI, they can ask it to be conditioned on completing training programs, like the certificates offered by Microsoft. It’s an illusion that the market can automatically solve the problem. The market mechanisms only says that in an economic downturn, staff should be laid off. When the economy recovers, they can be re-hired. But the market mechanism doesn’t take care to maintain a disciplined reserve workforce in the meantime. When business starts to re-hire, they may find it difficult to find qualified staff, because part of the workforce drifted off in the meantime, some got mental problems, or alcohol/drug problems, some were radicalized, beside the agony suffered by the laid-off staff and destabilization faced by the society, it also becomes more expensive for the business to find qualified staff when they need them. Of course you can say that it’s the government’s job to take care for the unemployed, but of course government has to raise taxes for its social programs. If business actively co-shapes, it can make such programs more effective and efficient, have the reserve workforce trained in the way they can better find a job or start self-employment/start-up that can better meet the needs of the economy, and that at a lower cost.
I haven’t logged in for three months, so I just read your comment. Sure economics can’t explain everything and cost-benefit analysis is not the only factor affecting popularity (though often the most relevant). Can you be more specific about what do you think makes the card so popular, even if it didn’t satisfy the cost-benefit criterion?
Yes, the special card I suggested is like food stamps (I guess with food stamps you can also choose between different foods and are not bound to a particular food) or Medicare (where you can also choose I guess), only the card idea is slightly more oriented to the supply side (a flat supply curve is the premise), while ultimately the consumers also benefit.
I guess in many aspects I‘m also a poor person, but I haven’t yet found the time to really think about it, because I really doubt if things would be any different if I would be a bit richer. I certainly don’t starve, in fact I‘m thinking about putting up a foundation to give something back to the society, because in Germany you can also put up a foundation with little capital. My idea also has something to do with AI, but not with UBI. I think labor division is great, but also has side effects: people in different jobs tend to be alienated and fragile, a lawyer doesn’t really understand a nurse, losing a good paid job often makes the person suddenly doubt on her worthiness although it’s still the same person. With AI I could generate lots of contents to help people navigate the life. For example, if someone looks for food, I can show them where to find the food cheaper, how to assess the nutritional value of the food, and how the food is made. If you have made the food yourself one time, you can more appreciate the time and effort by the producer, I think. By no means should everyone make all his own food, that’s contra-productive, but they should have the possibility to know how things they depend on daily are made, that gives them more confidence, and sometimes someone may even find a new endeavor, (I know there are some former chemists who became chefs and teach molecular cooking). The users can also network, discuss new ideas, get together for a project or put up a new company. The general idea is that now things can be produced cheaper due to scale effect, so we need new demand, including new idea. If someone earns lots on AI, the money he gets has no direct use for him, he must buy goods. If we can make more users acquainted with entrepreneurship, turn more consumers into producers, then today’s winners can also get more rewards in real terms, namely more gadgets which are new of its kind, while today’s losers can find new work to do which in turn enables them to buy more AI. By blurring the boundaries between producers and consumers, as well as between different professions, people can also understand each other better. While this is not about UBI, I do see both as complimentary: with some UBI, or food stamps or whatever, people are insured, have time to get better informed and improve themselves, and I intend to serve them the above mentioned information to help them find a better opportunity more easily.
I fully agree with Radford, while all others also made some good points. My question is: why does UBI have to be paid out as dollar, and not e.g. in form of coupons for say, e-books? The cost for producing one more copy of ebook is almost zero, so you can even finance it by printing money and the price won’t go up, as the quantity varies with demand.
You could even do it on a larger scale: you give everyone a special card with certain amount which can only be used at vendors who agree to keep price constant. For instance, if strawberry sellers have plenty strawberries to sell in May, where the marginal cost is almost zero, they can apply to be partner in May and promise to keep price constant in May, and mid May they can apply for June or decide not to. If Alaska suffers from declining population, it can apply and promise to keep rents constant for a year, and 6 months before year end it can decide whether to continue. The card holders can see online or in a dedicated app, where they can use this card for what and how long. The card is not as comfortable as cash to use, but one gets it for free. For the society as a whole, it can tilt demand towards where supply curve is flat and the risk of inflation is low, since only vendors with (temporary or permanent) low variable cost will apply, otherwise it wouldn’t be profitable to promise a constant price to attract more demand. What do you think?
And if you don’t mind, I‘d also like to ask what are the two numbers beside the commentator id mean. One looks like the thumb up/down as in other social networks, but what is the other for?
Great post! Really. I used to be a picky reader and even if you show me the tweet of a Nobel laureate, I can immediately pick out a few points to criticize, which, of course, doesn’t mean that they aren’t way better than me in economics. A few tweets doesn’t say much about someone’s achievement, if you read my tweets, you can certainly find more to pick on. That you’ve achieved a lot in life, doesn’t even need to be mentioned by me, all know it.
Although I don’t agree with every point in this post, I quite like its philosophical touch, which possibly explains why you, unlike many other non-economists, can directly see through the veil of money and from start on addressed the crucial point (of goods and productivity). I don’t want to list here the points I would pick on, it’s not productive. I don’t need to say what you can improve on either, as the highly rated comments have already said all possible things. Because I‘m not well informed about UBI, I only have one question: why does it have to be paid out in dollar, and not e.g. as coupons for some goods with near zero variable cost?
You are right to say that money alone is not enough to eliminate poverty, although that’s no sufficient argument to disprove the effectiveness of UBI, because you only distinguish between poverty and no-poverty, but not between more-poverty and less-poverty. I don’t know if UBI can reduce poverty, but if you want to disprove it then you need to say more.
It’s amazing that you addressed various aspects of poverty and not reduced it to more shirts vs fewer shirts, but you somehow mingled everything up so that it’s difficult to see your point. In the story about the lacking oxygen, it’s an example of absolute poverty. As you wrote later, oxygen can be produced, actually market economy always works to produce the most needed goods. I guess for someone to survive, a finite number of goods would survive, then market economy would only fail to fix absolute poverty ultimately if itself produces new scarcity, like of oxygen. Yes, it’s known that production can cause environmental problems and pollute air, due to the phenomenon called externality. Government is actually one possible actor who could intervene and fix this market failure, but then you said governments ALWAYS destroy wealth without specifying what you mean. Is the action of getting more fresh air the destroying of wealth because the action costs while air doesn’t? Or for some reason the government insists to do it in a stupid and costly way and forbids you to do it in a more clever way?
You also wrote something about the necessity of sending kids to a better school district so that they won’t be bullied. That’s an example of relative poverty, and as your friends said, relative poverty will always exist, UBI won’t help, nor would market economy. It doesn’t mean that bullying relatively poor kids should be tolerated or even praised, but that’s not the topic here either, I guess.
Your writing sounds like someone put you under pressure to finance UBI and combat poverty. I think that’s not good. If they want you to pay for something, then it’s their job to explain to you why it’s ultimately good for you. Of course, in case the difference is too big, they also have the right to cut tie with you — a threat which is only effective if they are doing it better than you or you are doing better in the community with them than outside.
If you are not under pressure but want to hinder others in implementing UBI and combatting poverty, then you have trespassed. As you said, the definition of poverty can vary from place to place and from time to time, so without looking into the specific case, you can’t actually know for sure if it is productive or not. I heard that Christianity rose as a religion for the poor, which united and empowered them so much that a Roman emperor found it good to adopt this religion. I’m no Christ, so if I’m wrong you can correct me. And even if I’m right in this point, it still doesn’t say much about your specific case which I don’t know.
My point is: everyone has the right to implement UBI and combat poverty if they gather the resources for it on a voluntary basis (forcing in debt doesn’t violate the voluntary principle as long as the debt was made by free will, so if you have received benefit then you have to somehow repay someday) and they can do it in the way they see it fit. In the example about Christianity, the UBI was not designed as a certain amount of money but enough food to avoid starvation and shelter to avoid freezing to death. Of course, one can also do it differently.