Finland Is Killing Its Basic Income Experiment (businessinsider.com)

tomhath shares a report: Since the beginning of last year, 2000 Finns are getting money from the government each month -- and they are not expected to do anything in return. The participants, aged 25-58, are all unemployed, and were selected at random by Kela, Finland's social-security institution. Instead of unemployment benefits, the participants now receive $690 per month, tax free. Should they find a job during the two-year trial, they still get to keep the money. While the project is praised internationally for being at the cutting edge of social welfare, back in Finland, decision makers are quietly pulling the brakes, making a U-turn that is taking the project in a whole new direction. "Right now, the government is making changes that are taking the system further away from a basic income," Kela researcher Miska Simanainen told the Swedish daily Svenska Dagbladet.

Comments

Doesn't work as an experiment

[bluefoxlucid]

It has to be universal and permanent to really reflect the outcome expected.

I support a Universal Dividend, anyway, which is self-funding and doesn't have concerning fiscal issues presented by UBIs. The whole UBI thing is a clunky proto-ideal that I regard as old technology.

Re:Doesn't work as an experiment

[Anonymous Coward]

We have tried that.

We have tried it several times over and it lead to about 100 million dead by starvation and secret police.

People are not working for free to sustain people that don't. Ownership of one's labor, ownership of anything that one worked for is a deeply moral concept and it is impossible to take that away without removing the core concept of morality and with it removing the basis of a peaceful society.

That is why socialist countries routinely murdered insane numbers of people, because they took out a crucial part of human morality.

Re:Doesn't work as an experiment

[bluefoxlucid]

Those kind of social experiments have a bad history of negative outcomes, something that educated people know.

You mean like popular sovereignty?

What about unemployment insurance? Old-age pensions? National medical care?

How about minimum standards for treatment of prisoners?

There's a distinct history of phenomenally-positive outcomes that educated people seem to know about.

Plus you pull out something completely new, that is also untested and unknown? Huh?

Kind of. It's engineering.

The Universal Dividend is mainly the result of an interesting financial exercise, so the fiscal impact is well-understood in the same way that the fiscal impact of buying or leasing a car is well-understood (you look at the numbers and do the math).

The Dividend behaves as a tax cut (by being a rolling tax refund) and a Keynesian economic stimulus, both of which are well-understood. A Keynesian stimulus generally involves deficit spending to create consumer spending so as to kickstart a downed economy (e.g. 2008 Great Recession, halted by a stimulus refund and a bunch of infrastructure spending); the Dividend doesn't create deficit compared to 2016 (the new 2017 tax law is broken), so essentially has the upside without the downside.

The rough fiscal model ends up cutting the corporate tax rate from 35% to 33.5%, and the top tax rate from 39.6% to 36.2%. That's adjustable, but actually adjusting it requires fiscal data most people shouldn't have: the CBO has to get involved.

Because the Dividend makes people less-poor--especially the poorest--it eases the pressure on the welfare system. This in turn allows welfare to reach farther and keep everyone stable: no homeless, no food insecure. The greatest proportional impact is in the poorest households, and thusly in the poorest local economies, and so consumer spending increases and corresponding employment opportunities appear most-significantly in these areas, creating jobs where there is most likely higher unemployment.

That sort of creates a runaway effect: people start moving up out of poverty and, thus, off welfare, lowering the cost of welfare. Because there's less welfare coming to any given household and the Dividend cannot be revoked, getting a job is less-risky and has lower direct cost, so this effect is stronger. We can improve welfare, lower deficit, or do other things.

The increase in employment and work translates to higher GDP-per-capita and GNI-per-capita, causing the Dividend to increase, creating a feedback loop. That causes a temporary runaway effect of economic growth as well. Without sufficient labor force, this growth creates an employment shortage, wage pressure, and inflation.

To control this runaway economic growth, we must shorten working hours, thus reducing the amount of productivity (per-capita, not per-hour) and spendable income, thus labor demand. People will have to work fewer hours and take home only a moderate amount of additional wealth instead of an enormous and unmanageable amount.

After that tuning, economic stability sets in: the Dividend is a permanent stimulus and thus rebuffs economic damage, so is constantly and continuously reversing transitional unemployment and any recessions which begin to form. This results in a permanent high rate of productivity growth.

All basic, known economic devices, just plugged together in strange ways (i.e. engineering). We know what an engine does, we know what gears do, we know what wheels do; let's build a go-kart.

Re:Doesn't work as an experiment

[Anonymous Coward]

It doesn't need to start full-upkeep, let everyone in the country split evenly among themselves 0.1% of the national GDP, no matter what, and see what happens, how it affects economy. Don't forget to subtract the amount given from all forms of subsidy and welfare, because the alleged point of UBI is to rise until it can substitute complicated and costly system of targeted conditional help with checks and controls.

Gradually increase handout and periodically switch on and off (to be able to filter the noise out), until there is a detectable change. If change is bad, abort. If change is good, continue the trend cautiously and keep tracking the data. Set hard limits in GDP percentage to prevent chilling effect on industries which relies on cheap labor - UBI should allow individual wages to be arbitrarily, even marginally low ("work just to raise money for fulfilling a dream"), but at the same time it would hurt unpopular hard jobs. OTOH, perhaps it was always destiny of unpopular and hard jobs to become automated out, or at least mechanized into more comfortable duties.

Many people who were raised within certain ethic system have hard times understanding that UBI is a way to safely remove shackles of "social responsibility" from entrepreneurship and technological progress. They would rather that we all live in Middle Ages, and eat our respective bread by the sweat of our respective face. Apparently there has to be a pecking order in the naked apes' society, regardless of plenty, or some of them will start screeching and biting.

Worth a shot, but no point in crying on failure.

[jellomizer]

Basic Income seems like an interesting experiment. Which comes down to the a root issue.
Do people live to work, or work to live.
This article was kinda wimpy about giving us its findings. Just supporters crying that it didn't have enough time.
However things I would like to see.
For these people on Basic Income, what did they do in their lives? Even if they didn't get jobs, what did they do with their lives? Did they just sit at home watching TV and playing X-Box? Or where they out being active in the community. Volunteering their time and talents to help make things better?

If people live to work. Even if they are not able or unwilling to get traditional jobs, their instincts will still have them being productive member of society, just in ways that Supply and Demand doesn't give a lot of money too.

If people work to live. Then basic income will be negative effect, as having enough to survive is means they are not motivated to do anything else, other then their own benefit.

I expect there is a mixture of these people, but having this targeted at only the unemployed may have found a concentration of the work to live folks vs. people who are on short term job loss, or who are under paid.
 

Re:Random

[Xolotl]

Because most people want to have more than just the basic necessities of life: a nicer car, a nicer house, holidays, gadgets, whatever. That requires money and so requires finding a job.

Reducing stress while looking for that job makes it easier, it means that you can look for a better job or get training without worrying where the next meal is coming from.

Re:Random

[Anonymous Coward]

Because most people want to have more than just the basic necessities of life

What evidence do you have to suggest this? Why are there more people accepting of mediocrity than those pursuing higher life goals to get more than basic necessities?

Why work and find a job when I can use a sob story to get legislation passed to give me what I want without work from suckers that do work?

Reducing stress while looking for that job makes it easier

Less stress != easier. Stress can be a good thing. You still have to go through the same crap of finding a job regardless of the stress. Handling stress is part of life and again can be a good thing.

Re:Duh?

[tomhath]

Agreed. My submission had "basic income" in quotes to recognized that, but those quotes were removed by msmash.

However, I do note that when the program was started, many proponents celebrated it as an experiment in UBI even as critics pointed out that it wasn't really. It is but it isn't; but wait, now it isn't but it is. Whatever.

Re:Duh?

[Opportunist]

Parliamentary elections about a year from now could be a reason...

Re:Duh?

[Green Mountain Bot]

What happens when you Give Poor People Cash? They spend it on the things that it makes the most sense to them to spend it on. Things like livestock, tools, and housing repairs. Things like health care and education.

It's almost as though the idea that helping people is bad comes from miserable SOBs who are only ever happy when other people are miserable, too.

Re:Duh?

[scottrocket]

Agreed. These people are worth more pieced out as donor organs. Put simply, in this case the sum of the parts is worth more than the whole. There really is no reason to continue to participate in society if they are not contributing, and this is a way that they can contribute in a very beneficial way.

This prompts a thought: How many people would go for the equivalent of a reverse mortgage, with their organs? I mean, they own their organs, so make a promissory deal with some company for a fixed quarterly income. I suspect the company would want to micro-manage their health care - hell they may even pay for it - but the donor would have to live a "managed" lifestyle: Minimal alcohol consumption, no drugs except as approved by Big Organ(TM), no risky hobbies or sports beyond jogging & aerobics etc. 'Course, if a surgery happened to go awry at a young age when the donor's organs are young & fresh, and worth more, or their sdc had a hiccup on a sharp curve...sounds like a science fiction story (*cough Coma *cough).

Re:Duh?

[guruevi]

Well, but it's at least a trial and a data point. If you're starting a research study for a new wonder drug, we don't dose the entire population and see if it works, why would economic policy be any different.

If it doesn't work on a small set with controlled parameters, how would it work on a larger scale without said parameters.