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Finland's Universal Basic Income Called 'Useless' By Trade Union Economist (bloomberg.com)
An anonymous reader quotes Bloomberg:
Finland's basic income experiment is unworkable, uneconomical and ultimately useless. Plus, it will only encourage some people to work less. That's not the view of a hard core Thatcherite, but of the country's biggest trade union. The labor group says the results of the two-year pilot program will fail to sway its opposition to a welfare-policy idea that's gaining traction among those looking for an alternative in the post-industrial age. "We think it takes social policy in the wrong direction," said Ilkka Kaukoranta, chief economist of the Central Organization of Finnish Trade Unions, which has nearly one million members.
Since January, a group of unemployed Finns aged between 25 and 58 have been receiving a stipend of 560 euros ($600) per month. The amount isn't means-tested and is paid regardless of whether the recipient finds a job, starts a business or returns to school... Advocates say it eliminates poverty traps and redistributes income while empowering the individual and reducing paperwork... While limited in scope (it's conditional on the beneficiary having received some form of unemployment support in November 2016) and size (it's based on a randomly-selected sample of 2,000 jobless people), the Finnish trial may help answer questions like: "Does it work"? "Is it worth it"? And the most fundamental of all: "Does it incite laboriousness or laziness...?"
The trade union argues this UBI program would cost 5% of Finland's entire gross domestic product, making it "impossibly expensive."
Since January, a group of unemployed Finns aged between 25 and 58 have been receiving a stipend of 560 euros ($600) per month. The amount isn't means-tested and is paid regardless of whether the recipient finds a job, starts a business or returns to school... Advocates say it eliminates poverty traps and redistributes income while empowering the individual and reducing paperwork... While limited in scope (it's conditional on the beneficiary having received some form of unemployment support in November 2016) and size (it's based on a randomly-selected sample of 2,000 jobless people), the Finnish trial may help answer questions like: "Does it work"? "Is it worth it"? And the most fundamental of all: "Does it incite laboriousness or laziness...?"
The trade union argues this UBI program would cost 5% of Finland's entire gross domestic product, making it "impossibly expensive."
How do we measure the economics of the situation?
If people become indifferent to unemployment, trade unions have no reason to exist anymore.
Here's the thing - basic income CAN theoretically not work out... but some an economist with a stake or two against it working is NOT evidence that this version of it hasn't panned out. Especially when it's posted on fricken Bloomburg news!
That's what the experiment is for. Instead, it's to see if the money spend on THIS style of program is as effective as the several other programs it can replace, and whether that replacement will be practical. It's money that will be spent in any case! You need experimental comparison to judge the merit of the approach.
Again though - until RESULTS are in, hearing some talking head berate the idea of it as not to his liking isn't helpful.
It's like folks who dismiss needle exchange programs to reduce communicable disease, without actually bothering to look at the numbers, and what the studies actually account for.
Ryan Fenton
I think the original has been improperly translated.
I think a more accurate translation may be:
'How dare someone try a system that treats everyone equally, and isnt controlled by US!
Our research shows that the best trade union members are poor and unhappy, we need more people like that!
The LAST thing we want is a feeling of happiness and satisfaction for our members, they they may not need us,
and if they dont need us, then how will we be able to take their money so we can live the high life?
No, UBI is a terrible, horrible idea, bad for everyone who matters, which are the leaders of our trade union movement!'
I haven't seen anyone come up with a good reason people wouldn't use basic income to work less and be lazy. I can tell you, if I had guaranteed income for life, I would probably not ever work again.
"First they came for the slanderers and i said nothing."
UBI is very different when the sum is enough to live or not.
If it is too low (and at 560 euro/month it is certainly too low to pay housing and food), then people still have to accept any job to live, and employer can pay less because decent living costs are already partially covered by UBI. In such a situation, UBI acts as a social support to employer without taking any power from them.
OTOH, with a UBI high enough to cover basic needs, things change a lot. Employers need to convince people to enroll them instead of the other way around, while people can also choose to start businesses that have social benefit without being profitable.
Of course that consideration do not cover the huge question: how to find the money for high UBI? Some specialists consider a high UBI possible if all national labor costs are socialized: Instead of paying employees, employers contribute to a labor fund which in turn pays UBI to people. I have no idea if this is workable or not
Well, if none of what you do earns any income, people will say it isn't work.
How do we measure the economics of the situation?
That's a very good basic question to ask.
Too many times people get up on the soapbox of the world and give their opinion about this or that policy, and one can never figure out whether they are experts speaking from experience or just political hacks.
People giving an opinion in public is just noise, and people bolstering their opinion with rationalization and/or analogy is noise masquerading as signal.
We shouldn't give any credence to anyone who tries to sway our opinions about, well... anything, unless they can back it up with facts that are suggestive or studies that can be examined in detail.
I'm especially suspect of the "it will only encourage some people to work less" comment, as if that is a bad thing. It might be perfectly acceptable for some part of society to have to work less, or perhaps not to have to work at all. There's a parallel and opposite rationalization that holds that people will accomplish great things when given enough leisure.
Making that statement ("some people" is an obvious attempt at being divisive, as in "you know the type of people I mean") in the way that he made it is simple emotional manipulation. Also from the article are such gems as "We think it takes social policy in the wrong direction", meaning basically "I don't like it, in an unspecified and indeterminate way".
He's not claiming that it doesn't work, he's claiming that he doesn't like it (and neither should you).
So, you think sickness benefits, unemployment benefits, state pensions, etc are somehow not 'giving money out'? They are somehow 'measured'?
The whole point of a (properly designed) UBI is to replace ALL of that, with a single right of income.
The advantages include removal of the huge amount of bureaucracy, management costs, corruption, and fraud.
Basically it means everyone gets treated EQUALLY, and you would be amazed how many people hate that idea.
Usually because THEY want to be the ones deciding who is 'worthy' of support.
The cost is self-adjusting, because basically all countries have graduated income taxes, and UBI is also taxed, so people with large incomes
just end up repaying most of it in tax anyway. A country should use a combination of personal tax, and savings from the scrapping of all the broken
other forms of social benefits to fund it.
Of course that is putting it simplistically, however that is the formula of a true UBI, which many haters (usually those who currently profit from control
of existing welfare schemes) work very hard to ignore.
UBI is not 'free money for all', it is an acceptance that welfare is a sensible right in society, so we should remove the broken and inequitable systems
that current exist, covered in bandaids, and replace them with a simple single system that treats everyone equally, is low cost to manage, and almost
by definition free of corruption and fraud, because it is so simple..
I haven't seen anyone come up with a good reason people wouldn't use basic income to work less and be lazy. I can tell you, if I had guaranteed income for life, I would probably not ever work again.
Here you go.
You have to realize that "work" may not be going out and doing a 9-to-5 job in the traditional sense. Newton made a bunch of his discoveries while on forced leave from Cambridge due to the plague, and there are many historical examples of well-to-do scientists and explorers and artists who made great discoveries because they had the leisure and means to do so.
Stephen King was dirt poor for much of his early life, but he still wrote because he loved writing. Imaging how much more he could have contributed to popular literature if he didn't have to take back-breaking jobs as a young man to make ends meet.
Not everyone will be Newton or King, but anyone who takes up a hobby or minor occupation and becomes really good at it might extend the frontiers of that area. All of this has the potential to enrich our society and further our scientific knowledge.
Unless all participants are grouped together geographically, your experiment will be invalid. For example, one criticism is that UBI will lead to price inflation. You can't measure that when the number of participants in the experiment is dwarfed by the rest of the population several (dozens or hundred) times over.
"If you do not have basic security you cannot be rational,"
Exactly.
Not only does SAK say that the system may reduce the labor force -- for instance by tempting mothers of small children or those close to retirement to take more time off -- but the union also suggests that making it easier to refuse unpleasant jobs may create inflationary bottlenecks.
We have automation so that we didn't have to perform unpleasant of dangerous jobs! Not enough workers? AUTOMATE IT! Can't automate it? Pay people what the job is actually worth!
This is how the future should work.
Anons need not reply. Questions end with a question mark.
Here's the thing - basic income CAN theoretically not work out... but some an economist with a stake or two against it working is NOT evidence that this version of it hasn't panned out.
Business folk (the type that like exploiting cheap labor) are terrified they are going to lose their leverage on people so they are summarily declaring it a failure. It could have been the single most successful thing on day one and they still would have declared it a failure because it's a threat to their way of life. That is to say that their way of life is exploiting people's food/housing insecurity, the modern form of slavery.
Anons need not reply. Questions end with a question mark.
is that it conflicts with all of human history.
There is ample evidence of social & economic collapse under communal economic systems (and you're kidding yourself if you don't think that's what UBI is, because the only way to pay for it is to tax wealth so much that it becomes de-facto communism)--and there is basically no evidence to support the theory that society cannot replace the jobs lost to technological automation. People have been predicting the latter ever since the loom and they've been wrong every time (including *right now* BTW, where the unemployment rate in the US is quite low). I'm going to predict it will never happen, and at most I'll only be wrong once.
Sure money is a unit of measurement, but I have yet to see an analysis that what it measures is what anyone thinks it is measuring or that what it is measuring is the right thing to measure.
and a lot of them will do exactly that. Your economy loses whatever productivity they might have contributed, socialists get more dependent voters to re-elect looters, and their kids grow up believing the world owes them a living.
You have only to look at the effects of multi-gerneration welfare dependents in the USA and the UK to know how destructive this is.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Some people think it will work very well, some people think it'll be a total failure, and of course some people are in-between.
For anyone here in EITHER of the first two groups, you both think the results would be pretty clear cut - the result won't be ambiguous. Here we have an actual experiment to test it, and there are other similar experiments being done or planned. Here's a chance to prove that you're right, and possibly in a measureable way such that those who disagreed have to admit their prediction was wrong.
Are you smart enough, and do you understand the issues well enough, to come up with some fair criteria by which to judge the outcome of these experiments? Can you mark a goal line and say "the experiment will show that UBI does A by x%, without doing B by y%"?
Since you understand the issues, that means of course that you understand the opposing viewpoint, you understand what their concerns are. Since you're pretty sure you are very much right, you should be able to be a bit generous in marking the goal lines. If anyone can come up with some fair measures we can later use to see who is right and wrong, I'll post my prediction and if I turn out to be wrong I'll freely admit it.
That would be really cool if we could do that. I don't have too much hope - I think a lot of people shooting their mouth off don't understand at all what people who disagree are saying, and have no interest in understanding anything other than their own guess. The ad hominem attacks which are already so prevalent on very page strongly suggest that some commenters haven't a clue what the other group is trying to warn them about, and don't care to know.
Anyway, there are experiments in progress. Anyone have an idea of some fair to generous criteria by which to judge the results when it's done, can you set a goal line which those who disagree might think is a fair goal line that captures their concerns?
I live in Finland, so few comments about the SAK.
SAK is worker union that has jammed to 1970's.
There are only 2 things SAK is capable of doing:
1) Shouting "bigger pays of we will go to strike"
2) Shouting "you may not do any improvements for more flexible work contracts, or we will go to strike".
Absolutely no understanding that the world economy has changed since 1970's, and absolutely no understanding od thet fact that finland has been belonginf to EU for over 20 years should make things very different than things were in 1970s.
Also absolutely no understanding of the fact that Nokia was holding Finnish economy high and now when Nokia is no longer making mobile phones, Finnish economy is doing much worse and they cannot require so high wages anymore.
In Finland the worker unions are way too strong, they have some rights (or actually wrongs) worker unions in other countries do not have:
1) The worker unions also decide how much is paid to employers that are not members of the union.
2) You get tax rebates for belonging to worker union.
3) In order to get better unemployment benefits you HAVE to belong to some unemployment fund, even though only about 1% of the unemployment compensation money comes from the unemployment fund, 99% comes directly from the goverment. Most of these unemployment funds are ran by the worker unions. (fortunately there is also one private on, "YTK", "common unemployment fund", but many people do not know it exists)
A perfect example of basic income working is the longshoremen's unions in the US. Before containerized freight and automated cargo terminals, thousands of men would stand on the stones every morning and work a back-breaking job hauling loose cargo off ships with hooks. After containerization, instantly, there was no more work for the vast majority of these people. Since most of them were completely unskilled, and not capable of retraining into any other job that paid the same or better, they could have been in danger of seing the same fate we assign to the unemployed today -- eventual destitution. However, the longshoremen's unions implemented what amounts to a tax on cargo handled through these automated terminals that goes towards paying "retired" longshoremen a basic income. This is one example, and let's just say the union has a lot of muscle behind it that helped this get passed, but it does show a way to help the unemployable -- and make no mistake, that's going to be 90+% of us sometime before I'm dead (in the next 50 years or so.)
I guess my problem with people who argue against a basic income is that they don't have a better alternative in mind. Sometime in the near future, the vast majority of low level service jobs will be automated. At the same time, the use of intelligent systems will come and cannibalize the top end of the spectrum too. Think about doctors for a second -- they're smart enough to have a regulated profession and should be fine because of that. But what if they didn't? Medical education is basically academic hazing, from the MCAT to the preclinical firehose to 100 hour weeks as an intern. Med schools select for people with photographic memories and perfect grades because that's basically the only way to survive the training as it is today. Well, thanks to Google we don't need photographic memories anymore, so the only skill left will be synthesis of all the stored knowledge. This is why IBM basically sold off their entire business and are building Watson and other AI-type systems. Soon as these algorithms get good enough, most work that requires intuition is toast. Hospitals won't have to pay doctors when they can feed test results and live observations of patients into a machine and get a diagnosis.
I think basic income is the only reasonable transition vehicle to move the world away from traditional employment. Imagine telling everyone who's about to retire that people entering the workforce now won't have to save. Or, tell people who define themselves by their work that they've all been made redundant at the same time. Or, try to divide up the accumulated property among people when money stops being critical -- who determines where the renters go, or who gets to keep the houses they own? All of these are too much stress for the economy to bear all at once and will lead to a mess. Phase in a low-employment world over time with controls, and it makes the shift easier.
As example of the general kind of thing I'm asking for, early in his first term Obama said something like "if unemployment isn't below 5% by 2012, you shouldn't vote for ... well you should think real hard about who to vote for."
It was fairly obvious he has started to say "if unemployment isn't below 5% by 2012, you shouldn't vote for me for re-election", then decided halfway through the sentence to change his words slightly. Anyway, he gave a clear, objective number by which to judge his performance. Many Republicans would probably have agreed that 5% unemployment was one reasonable, somewhat fair, standard to judge his economic policies by. Can anyone come up with a similarly fair and objective measure by which we will be able to judge the results of these UBI experiments, a pass/fail mark both sides might agree on?
* I don't remember the exact number Obama said - 4%, 5%, or 6%. The point is, he did specify a number by which his policies could later be judged.
How other could they see "it may encourage some people to work less" as a problem, when that is precisely the intent? The problem tackled by an UBI is primarily the scarcity of work, nothing else.
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.
The rest of the world bears no resemblance to the US - particularly not Europe, where the French Revolution has left clear evidence of what happens if you leave most of the population in abject poverty, and then publicly say "I'm all right, Jack".
Trump and his mates may tell you you can avoid problems by telling the general public they are worthless scum, but the evidence is against this being the case.
Sent from my ASR33 using ASCII
I should add that UBI also looks very good to people who evade tax completely but have an income. Take a close look at some of the people pushing it for examples. Other suckers like us are expected to get taxed out the backside to add to their income.
Welfare should be something to keep people alive if they don't have enough income not some "every child gets a prize" bullshit.
A UBI is very simple to administrate and requires very little bureaucracy. Our current collection of welfare systems are not. The reduction in bureaucracy won't come from increasing the number of people on welfare, but by reducing the per-person administration overhead.
I have absolutely no idea how you managed to misunderstand that from the GP's post.
It's not as if that 'extra' money suddenly leaves the economy. Given the subsistence levels of cash we're talking about, it is pretty much guaranteed that all of it will be spent quickly.
This is a point that is often lost on a lot of people. People who have little money are fantastic at spending it. From an economics point of view they are the ideal consumers: if they happen to save money it is almost guaranteed to be for a specific larger purchase in the near future. Otherwise they are going to spend all their money locally (no fancy imported Russian caviar or trips to remote countries) and soon.
There have been and are projects in Africa that specifically just give money to poor families and it seems to be working very well. See for instance:
https://www.givedirectly.org/r...
Barring emotional arguments such as 'but Western poor people are different' the fear for giving poor people (marginally) too much money is simply unfounded.
Capitalism claims to benefit the most people overall than other systems which is a socialist argument!
Socialism is actually used to justify capitalism. The problem is that so much propagandizing has been done that people see it only in extreme examples; and unfortunately people don't explore things in depth regardless of it's importance.
Making people suffer, starve, and die because they refuse to work is foolish as well as inhumane. Those people will cause hardships and increase costs to society. While some people will be criminals anyway, everybody will become a criminal if you make life bad enough for them.
The REASON for UBI is that it is more adaptable to whatever comes in the future and it eliminates a huge about of overhead managing a that area of the welfare system. The political flaws and human societal flaws probably make implementing and managing a good welfare system for much time impossible. So, designing a system which avoids human and political weakness should be priority. UBI is such a system-- it's simplistic so even a voter can understand it and it's harder to propagandize against. The more overhead and corruption the better UBI does. It is not perfect but what is?
Most people I find against UBI should actually be for it. Instead of mindless government policies and systems to baby hopeless people; hand them an income and it's their own fault if they mess up. Every welfare system has a hard time balancing so that it does not become a TRAP which punishes those trying to get out of it.
Human flaws will always have the top protecting their ASSets feeling entitled as well and putting themselves above others. The middle class is always a hybrid of both the poor and the upper classes; afraid to rock the boat except when it may take away from their earned entitlements and often they will defend the rich because they may move upward someday. The better society does the bigger the middle class will be and in turn the more they will neglect proper management of the system if not accelerate it towards despotism (the inevitable death of all democracies.) Therefore, systems should be designed around the human flaws of a successful society.
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Ironically, the 1% richest of any country already have their basic income for sure and it seems to work out fine for them. Maybe some of them work less (Richard Branson?), but I've never heard some billionaire call out his fellow billionaires that they are just lazy and don't contribute enough to society, and most of them seem to work no less than anyone else.
Norway has a population of 5.2 million people, or .1% of the population of the US. The Government is much smaller than larger countries which reduces the amount of bureaucratic layers that can be corrupted. While I would agree that the US Government is much larger than it should be, it's also larger by necessity due to population and landmass differences. In other words, what you can do in Norway does not translate to what you can do in any other Government larger or smaller.
The majority of the corruption in the US does not come because individual people are dishonest, it comes because politicians and bureaucrats are dishonest. The people in Government allow the system to be gamed because they benefit from the arrangement. People on Welfare of all types are dependent on the Government for sustenance, and will continue to vote for people who give them stuff. Sadly this is not really a parasite and host situation, it's two parasites with the host being everyone else in society. As an easy example, we should be able to simplify our taxes to a few lines. Look at the reaction when people say "you can't take away _my_ individual tax credit" when ever it has been tried. IRS agents and politicians are happy, lawyers are happy, the people who complain feel like they get something back from the system, and a very large number of people see it for what it is. Government bloat which we could do without.
The Welfare system has in turn created a different problem, which is that countless people living on the system no longer have opportunity to get off the system. Factories, Shops, and stores all closed up from lack of employees. Given the early choice of "welfare or work" large numbers of people went to welfare so those places had to close . No workers, no fluid cash in that area, no way to run a business. Now that the money is drying up we have major problems in densely populated areas because people can't work. Making things worse, we have no money to spend on Welfare (US Debt is 20Trillion cash and 220Trillion in entitlements).
I'm also not sure Finland has done the same thing with money set aside for pensions like the US has. US Social Security is an empty vault full of IOUs for the general fund instead of being saved and interest compounded for the people who put money into the system as it was sold to the American people.
At any rate, you can't say that Finland should be the model for the world because Finland has considerable problems even though they are a very small country. In some ways better than the US, but I know and work with people from Finland who moved to the US because Finland has high unemployment and little chance for economic mobility. A 60% income tax rate ensures that fact.
-The wise argue that there are few absolutes, the fool argues that there are no probabilities.