VC Firm Y Combinator Launches an Experiment In Universal Basic Income (fastcoexist.com)

New submitter Gordon_Shure writes: Silicon Valley startup financer Y Combinator, remembered for successes like Airbnb and Dropbox, is launching an experiment to give people a Universal Basic Income. At present, the plan is for hundreds of participants to get repeated cash payments unconditionally. Then, assessors will record life consequences like changes in work patterns, self-employment, artistic endeavors, or idleness.

Recent focus on UBI in Finland, Switzerland and other countries see proponents claim a basic income will — in a world facing structural unemployment due to jobs taken by automated AI, robotics and machines — combat poverty and work insecurity. Others remain unconvinced. What do you think about the significance of what this kind of small-population study would show?

Comments

Interesting

[KermodeBear]

An interesting experiment, to be sure, and I'm glad that someone has the money to try it out.

It's hard to know until you're actually in the situation, of course, but I think that if I had a minimum income in addition to what I make now, I'd drop down to working part time and spend the balance volunteering and pursuing music again.

Re:Interesting

[ArmoredDragon]

As somebody who is very heavily opposed to communism and socialism, I'm interested in seeing the results of UBI (which is neither communism nor socialism, rather just a form of welfare) however I wouldn't want it anywhere I plan to live anytime soon, because it's one of those things where once you have it, it's practically impossible to take away, no matter what kinds of problems it creates or doesn't actually solve.

Re:Interesting

[Anonymous Coward]

It's a temporary study, so here's my prediction:

People currently living beyond their means will continue to live beyond their elevated means.
People capable of affording their current lifestyle will invest the additional income.
People who tend to make bad decisions will quit their jobs and pursue fame by some manner. Any success in this group will be seen as a strong argument for the UBI even if it proves to be statistically consistent with other people who drop their lives to pursue fame.

Re:Interesting

[pr0t0]

I'd drop down to working part time

While filling the remaining time with volunteering and strengthening the arts is noble, maybe even desirable in some sense; I'm guessing this modification to your work schedule is precisely why the UBI would fail on a larger scale...at least in the United States. It would seem to me the only way, or maybe just the best way, to judge it as a success is if not much else changed beyond lowering the costs of supporting those who cannot support themselves.

If a reduction in workforce productivity coincides with the UBI, a claim will be made that humans are lazy and will not work if they don't have to. Maybe they are correct. It was certainly the claim as to why Communism, or maybe Marxist Socialism, was or would be an inevitable failure. I'm not an economist, so my opinion on the matter is largely uninformed.

The UBI is interesting in principle, particularly if lowering the costs of supporting those who cannot support themselves can be achieved. If a measure of dignity and self-sufficiency can be returned to those people as well, all the better.

I personally wouldn't change my life at all.

Re:Interesting

[BarbaraHudson]

People dropping down to part-time work will increase demand for other people to fill in the gaps. It's better to have two people working part-time than one full-time and one idle, and the financial cost is the same either way.

With all the productivity gains in the last 45 years, we should be down to a 16-hour work week if the increases were divided equitably between employers and employees. So, since that didn't happen voluntarily, looks like the invisible hand is going to impose it on businesses whether they like it or not :-)

Re:Interesting

[tlhIngan]

As somebody who is very heavily opposed to communism and socialism, I'm interested in seeing the results of UBI (which is neither communism nor socialism, rather just a form of welfare) however I wouldn't want it anywhere I plan to live anytime soon, because it's one of those things where once you have it, it's practically impossible to take away, no matter what kinds of problems it creates or doesn't actually solve.

You do realize you're paying for other people's laziness/unemployability all the time, right?

Anytime any politician says "We will cut back benefits to the lazy and all that" it's really code for "We, the 1%, want to pay less taxes supporting your sorry asses". Because the homeless won't suddenly decide that because their government benefits are cut back, they will suddenly work. A lot of homeless ARE working - they don't make enough to pay for rent, food and other necessities. The ones that aren't, are generally unemployable - mental illness, drugs, alcohol or other problems keep them from holding even the most basic of jobs.

These people will not magically become productive members of society by cutting benefits. The working poor won't magically get better paying jobs (in fact, they'd likely lose their existing jobs), the mentally ill will not become employable (they need medical treatment, but they can't pay for that), etc.

Instead, those people will just become what the desperate do - steal/rob for the money and basic necessities they need. So instead of paying for their support through taxes, you're paying for them through increased crime, increased prices as stores have to cope with more shrinkage, increased security, etc. And yes, you can jail them - pay for more police officers, more courts, more jails. And medical bills - medical treatment inside the ER is the most expensive treatment option available - and the only one available, so you pay through increased insurance premiums helping people who can't pay at all for some of the most expensive medical treatment available.

Yes, it's all well and good to "be responsible" and "take care of yourself" and all that, but there will always be a segment of society that can't or won't. And it's either pay through taxes to take care of them, or abandon them and pay through other societal costs.

The only real question is - will basic income be done right? Because the basic income gets you basically very little - accomodations inside a large barracks-style room (you get a locker for your stuff, but that's it - you sleep with 8/16 other people at night), shared washroom facilities and entertainment, and 3 basic nutritionally complete meals a day.

That's what it really pays for - the absolute basics with very little discretionary money left over. Enough to live on, and for a few people, positively all they really need. If you want more spending money so you can live in more private accommodations, eat better food, have cash to pursue a hobby or anything else, then you need to do something to make extra money.

Sure, a few people will be happy to lounge around with the basics - that's fine. But a lot more people will want to improve their lot in life - I mean barracks style living only appeals so much.

Really, what happens is basic income transforms work from a necessity of survival (you can count having to steal or mug people as an occupation those without jobs have to do to survive), to a means to improve yourself. Eventually people want to have a private bathroom in their living arrangements, or private laundry, or watch more than just OTA TV, etc. So you work as much as you need to feel satisfied.

And it's sort of essential as robots and everything takes over - because those people whose jobs have been displaced aren't going to be able to find new replacement jobs no matter how much extra training they do.

Re: Interesting

[maple_shaft]

Despite the fact that the elephant in the room that macro economists are scared to death of is the drop in demand for goods and services in a mature economy. This causes natural deflation in a free market void of central bank interference. Japan for the first time is offering negative interest rates, a country that struggled with dropping consumer demand for decades. We are seeing the same things in the US and other countries where central banks are practically giving money for free with the hopes that it will trigger investment and demand. That and quantitative easing and creating new money out of thin air yet runaway inflation STILL does not occur! Most people work just hard enough to make just enough money to live a comfortable life with a few luxuries, but with productivity at record levels, not only do we have less and less need for productive workers for capitalists to make money, things that we have today that 40 years ago were toys of the rich are now common and cheap for the masses. Demand for more and more sophisticated luxuries is not continuous, it tapers off for most healthy functioning adults. This is clearly true or marketing services wouldn't be a billion dollar industry, using psychological tricks to convince people of needs that they don't have. This is only sustainable for only so long before we realize that demand cannot increase forever, constant growth cannot be sustained, and the value of human labor is approaching zero with productivity and automation gains. Universal income will not cause inflation as food and necessities on the supply side already surpass the possible demand from the population as a whole. With needs, we don't demand more food when our bellies are full, we don't demand additional homes and healthcare than what is necessary for us to stay alive. Everything else is a luxury and is a want not a need but in most people wants are limited too without psychological tricks. UBI will clearly not cause inflation, it is a necessary step towards a post consumer economy and society.

Re:Interesting

[GameboyRMH]

Ah, the "rising tide causes inflation" idea, which is incompatible with any existing theory of how inflation works. I've even seen some people suggest that increased minimum wages would trigger the same effect. According to this idea, it seems that the only force keeping inflation in check is the desperation of underpaid workers.

Modified life plan for this goal..

[Anonymous Coward]

I'm an electrical engineer. I've worked in lots of neat jobs.

A few years ago I realized none of those technical jobs would get me off the hamster wheel; having enough investments so I could eat, pay for basic living expenses, and then make nifty things and services instead. Financial independence. This is not the same thing as being filthy rich; for an accurate number, it involves having about $500k in liquid assets under investment generating income. Assuming you're willing to live someplace cheap. (I am)

I'm not from money, quite the opposite, and am unwilling to risk it all on ability to raise capital. I didn't understand how the rich stayed rich. I know what not having money to buy food feels like. Not going there. Ever again.

I looked at where the money is, and there's lots of it in financial-related industries, particularly if you're good with numbers - and even "advanced" financial math isn't that difficult relative to engineering.

My goal - through a career change and making other investment a life priority - was to get off the hamster wheel. I've devoted 10 years, or a measurable percentage of my life to this so I can enjoy the rest. I'm 6 years into my plan, and on track to make my goals, along with my wife, who shares my ambition to be free. ...but look at this!

Guaranteed income offers everyone that chance. Go do what you want to the net benefit of society. Remove that worry and fear. Remove the stigma. Hell, call it a citizenship dividend.

People will work; it's in our natures. What will change is what and how they work; most (many) jobs are pointless and should be automated. They WILL be automated in short order. Once this happens you can become a prison state, ripe for chaos; or you can adopt a scheme like this one.

We live in the future. This will be interesting.

Re:Modified life plan for this goal..

[Compholio]

... Fun experiment, ask a lazy person do help you and see how fast they are busy that day. ...

I am most interested in this because I find that lazy people get in the way of real work since you make them look bad if you get anything done. It would be very interesting to have the workplace composed solely of the people that actually wanted to be there.

Probably won't work in the US

[DrYak]

Expect the concept being shut down in the US because of "looking like an evil commie plan" in 4... 3... 2... 1...

I won't be surprised if :
- This US experiment will be one of the first to happen actually in real life (given the speed of politics here around in Europe. Specially in Switzerland).
- This experiment will bring lots of useful data.
- Right wing politics won't let it be in the US.
- Meanwhile, northern european country (I would bet mostly on scandinavian and germanic) will manage to implement it successfully.
- By the time the US finally decides giving it a try Universal Basic Income will have been successfully implemented in the whole Europe (not only the Nordic countries which are already economically stable and successful nowadays and I my opinion prime candidate for success, but I bet even *Greece* and the like will get a working U.B.I. before the US stops considering automatically putting a "commie" tag attached to it).

The UBI ignores human nature

[timholman]

The problem with a UBI is that it is (in theory) supposed to replace the multitude of payments through various government social programs with a single check or debit card given to every recipient every month, at which point the various government agencies that administer housing, food stamps, etc., can be shut down. Government bureaucracies never shutter themselves voluntarily, and it won't happen with a UBI, either.

The UBI operates under the assumption that everyone manages money in a rational manner, which is completely at odds with actual experience. Many people will take their UBI and immediately spend it on drugs, alcohol, gambling, or bling, while ignoring the monthly rent, the electric bill, buying groceries for the children, etc. Others will be cheated out of their money by criminals or even other family members. So do we let those families starve or get evicted because the heads of household are incapable of managing money for themselves or their dependents?

Of course not. Those people will need to be helped (sarcasm intended). So the various government agencies will continue to expand and spend even more money on housing, food, medical care, etc. The UBI won't even make a dent in entitlement budgets. Instead, it will become "free money" to be squandered on a thousand other things besides basic human needs.

Anyone who doesn't think it won't happen need only look at inner city schools in the U.S. In theory, every child should be getting meals at home thanks to government SNAP benefits to their parents or guardians. In practice, schools give many kids a free breakfast and lunch every school day, and even give them food bags to take home for the weekend, because Mom or Dad can't be bothered to buy food for the kids with the SNAP money. Where does the money go? No one knows or even attempts to find out. They just give the kids free food and cross their fingers.

The UBI will not change human nature. It will instead become one of the biggest entitlement boondoggles in the history of civilization.