Switzerland rejects free money for all

Vaeltaja

Ad Honorem
Sep 2012
3,629
#62
Just to comment the 'free money' aspect...

I believe that the universal income is they way things will become sooner or later (might be a fair bit later though). Increasing automation and sophistication of automated systems will reduce the number of jobs - so unemployment is not really something that can be avoided nor can every one be employed even if they wished so. The system however should be made so that any job made would increase the income level without there being gaps where it would be more profitable to be unemployed than employed. Or put in other words - working should be encouraged but at the same time the system should not punish those without jobs. How that could be organized is a different story though.
 

Fox

Ad Honorem
Oct 2011
3,834
Korea
#64
Personally, I hate this particular social contract that we're born into that we have had no say in. The majority of people spend a good part of their lives working drudgerous jobs. Why should we expect anyone to want to work doing a job they don't like, I disagree with that line of thinking.

For the sake of the argument, let's say the UBI is a feasible idea, that works in reality, what argument is there against it? "Nobody should eat for free,"......... is that it? I'm sorry, but seems obtuse to me and a bit cruel.
This is a valid point, and one which I think is often overlooked in discussions about the real potential value of a basic income program. One of the biggest potential benefits of a basic income program is the way in which it stand to empower workers on an individual scale. Right now, our societies frequently take advantage of the circumstances in which individuals find themselves, applying de facto economic pressure to push them into working not just dangerous or unfulfilling jobs, but to demean them while they do it. For example, how many people mock or look down upon Wal-Mart workers, McDonald's employees, or so forth even as they patronize those businesses, meaning they are deriving direct benefit from their labor? How many managers or business owners treat their employees poorly and get away with it on account of those employees essentially having nowhere else to go due to living paycheck to paycheck? An adequate basic income breaks the chains in this regard; workers -- and most people do want to do some sort of work ultimately, especially since they'll probably want more affluent lives than a basic income can afford -- will still do many types of work, so long as the terms of the labor in question are reasonable, not just in terms of hourly income, but in terms of decent treatment. Knowing, with certitude, that, "If I were to quit my job tomorrow, even were I never, ever able to find other adequate employment, I would not fall into homeless destitution," is valuable. Even with matters like health care, we hear stories about individuals who wanted to take a risk and start freelancing or try opening their own business, but felt the could not, because their employer-provided healthcare wasn't something they could risk losing. UBI tackles the same problem, but even more fundamentally by targeting income directly.

Beyond that, another interesting feature of the UBI is that it to some extent decouples demand from labor, meaning you've essentially got a "demand floor" below which the economy cannot fall, meaning in turn that those who wish to do productive labor (which, again, is almost everyone to some extent) will always be able to take advantage of that. When demand and labor are directly linked, by contrast, we can fall into bizarre depression cycles where in principle, there's a lot of people who want to work but at the moment are not, and because at the moment they are not, demand is lacking, and because demand is lacking, no one will hire them. A properly-run employment insurance program can to some extent mitigate this, but UBI does it better, and requires no conscious response or calibration. In other words, even those who are engaged in productive labor and not, strictly speaking, dependent upon their UBI can still be said in some sense to benefit from the system; just as those who do not drive could be said to benefit from roads, the indirect benefits are real and worthwhile. Being able to outright eliminate the minimum wage would also likely be a charming side effect in the eyes of many employers who might like to offer certain services which, while worthwhile, are not particularly economic in character. Likewise, while now the "unpaid internship" is much lamented for being a kind of de facto gatekeeping, in the present of a UBI scheme, there would not necessarily be anything abusive about such an engagement, and individuals of any social class might be able to reasonably participate if they felt it beneficial to their career aspirations. Finally, it's entirely possible that absent a minimum wage, and supported by a UBI, directly-paid wages (and in turn, prices) would fall, which marks another potential benefit for citizens even if they do not rely upon their UBI stipend themselves.

Last of all, of the three letters in "UBI," the most important of them is "U." As things stand, utilizing social benefits when your fellow man does not has a kind of psychological effect which demeans the recipient; it represents a sort of failure. No one in a country with universal healthcare feels ashamed to utilize the healthcare system, for example, and when every family with young children is provided with a small benefit to ensure proper nutrition, no one feels like a failure for receiving it. Likewise, being on unemployment benefits -- especially when they are necessarily temporary, but even if not -- strikes me as very psychologically unpleasant, and policy often seems deliberately crafted to exacerbate that unpleasantness, despite the fact that inflicting stress upon people in an already stressful situation is likely to impede their improvement as citizens. The fact that every citizen, in a non-means-tested fashion, would receive a UBI means that there need be no shame attached to it or reliance upon it. Certainly, one might be glum or embarrassed about being between jobs -- which, incidentally, is a factor which would probably promote employment even in the absence of necessity -- but that embarrassment will not be compounded by receiving a payment which others do not, nor accompanied by the stress of knowing that if you don't find work in a few months, your income will vanish and you might become destitute, and that even in the meanwhile, you must submissively report to your local employment office and convince them, "Yes, I'm trying my best to find work," or even take a demeaning drug test to receive benefits.

The whole topic is fairly complex, and from my perspective, the most of the interesting details are about things other than, "Where we will get the money?" and, "Will people keep working?"
 
Last edited:

Fox

Ad Honorem
Oct 2011
3,834
Korea
#65
As far as "affording" such a plan goes, any sovereign nation which maintains its own currency can of course "afford" it. The question is not whether such a plan is "affordable" in terms of currency units, but rather, whether the productivity of the country in question is sufficiently high that it could operate above the "demand floor" created by the program at all times and in perpetuity, and whether it will have enough productivity left after meeting that demand to engage in the other projects its citizens and government desire. For example, maintaining a massive military comes at great productivity cost, and in order to meet the productivity demands of a universal basic income, some of the productivity previously focused on military endeavors might need to be redirected, resulting in a smaller military force. The same goes for matters like health care and education; we'd probably be looking at serious price controls to limit how much societal productivity the medical industry was able to extract in return for its services, and substantially less support for education which was unrelated to genuine job training. In a certain sense, you'd be able to guess whether your society could cope with a UBI regime in part by considering how much "fat" there is to burn off in its economic structure, as that "fat" represents "excess productivity" from a certain perspective. Note that some individual citizens could be said to "lose out" in this scenario, though. The clearest example would be high-earners, who would probably be looking at top tax brackets in the 70 to 90 percent range, less because the government would "need" the money than because taxing and redistributing is less inflationary than issuing new currency. Likewise, people in "fatty" sectors of the government or economy could find themselves either unemployed or employed on less lucrative terms as a result of the transition. Korean doctors, for example, often lament how much less than earn than their American counterparts, on account of how strictly prices are controlled here, but the implementation of a UBI on American soil might necessitate some or most of that gap vanishing, leaving American doctors earning less than they did in previous generations.

In short, whether this is something a given country could do would be difficult to discern just by looking at that country's current budget and tax revenues. Considering those factors might be a quick-and-dirty way to establish an absolute minimum level of feasible UBI funding, but there's a lot more to take into account if one wishes to grasp precisely how far such a project could reasonably be taken.
 
#66
Fox, I am having real trouble following your line of argument. Just because some oafs might demean Walmart or McDonalds workers, that is no reason to change our policies wholesale, that is an argument to get people to not be oafish and to give the respect due to people. (I respect those workers, also garbage collectors, cleaners etc.., they are people working to make honest money). I have no information that their jobs are paricularly "dangerous". There are a lot of laws in place which broadly ensure that people are not treated badly. The compensation they get is not unreasonable, if you compare with, let's say, a small farmer trying to make a living on his own land. The real problem is that life is difficult and we must "earn our bread by the sweat of our brow" - that's just the way life is. You seem to say that UBI provides a safety net which would allow people to take the time to seek better work. To argue that, you have to suggest some amount that would perform that function, an amount that would enable people to eat and pay their rent for the month or two it would take them to find a better job, but you steer clear of facing up to figures. This Swiss suggestion was $2500 a month, which is $30,000 a year per person or over $7 trillion a year, in USA. Where is that money to come from? Only by facing up to hard reality can we really assess this idea. Perhaps you envisage a very much smaller payment, but will it be enough to keep people homed and fed and clothed? (You touched on health care costs, this at least is a realistic safety net that all could benefit from, and of course most of us in Europe are shocked that the USA doesn't have full health coverage for all of its citizens, leaving many of those unfortunate enough to fall seriously ill having to suffer the double blow of a crushing debt. )
You seem to suggest that the scheme is "affordable", even if money has to be printed to pay for it, but I think we all agree that printing money, as a long-term policy, would probably lead to inflation. There is taxation of the rich, but I say that even that won't raise the necessary trillions. My point is that I don't see that anything of what you say justifies implimentation of this costly policy. Considering health and education, it is generally agreed that these are things worth paying for, because just about everyone wants to be healthy, moreover healthy people are more productive, and just about everyone wants to have their children educated, and a generally well-educated population is, again, more productive. I can't see that anyone has shown real benefits, across society, of UBI, as against having targetted social security, especially considering the likely costs (and cost is extremely important, if there just isn't the money to finance a policy, that means that the policy cannot happen).
 
Last edited:

Fox

Ad Honorem
Oct 2011
3,834
Korea
#68
  • Fox

    Fox

The forum says this post is too long, so I need to break it into two parts.

Part I

Fox, I am having real trouble following your line of argument. Just because some oafs might demean Walmart or McDonalds workers, that is no reason to change our policies wholesale, that is an argument to get people to not be oafish and to give the respect due to people. (I respect those workers, also garbage collectors, cleaners etc.., they are people working to make honest money).
The fact that many of our fellows are suffering in abusive situations from which they are unable to escape on account of being economically chained to the working situations in which they are suffering the abuse in question is an excellent reason to consider changing our policies, at least if one actually cares about the individuals in question, which you purport to do. Of course, a universal basic income is not the only potential solution in this regard, which is why I phrased it as a positive element of the UBI scheme rather than presenting the UBI as the only viable solution.

I have no information that their jobs are paricularly "dangerous".
Have you bothered to look into the matter? For example, you brought up garbage collectors, and garbage collection is a much more dangerous job than many people are given to understand:

Police officers and fire fighters face job-related dangers every day, but it's not as widely known that garbage collectors do, too.

In fact, solid waste haulers rank third on the list of the riskiest jobs in the United States, according to a study by the Florida Center for Solid and Hazardous Waste Management, Miami, and the University of Miami,.

Averaging 90 deaths annually per 100,000 workers, collection falls behind fishing, with 178 deaths, and timber cutting, with 156. The high number of deaths can be attributed partly to impatient drivers, who try to pass stopped garbage collection vehicles and end up hitting collectors. This makes waste handling a riskier occupation than airplane pilot, which averages 88 per 100,000 workers, and taxicab driver, which averages 32 deaths.

The mortality rate is 100 times higher than what is considered acceptable risk by any standard, says James Englehardt, University of Miami professor of civil, architectural, and environmental engineering, and a lead researcher for the study.

The injury rate also is staggering, according to the study. Collectors, on average, are injured five to seven times more than the average worker, with 52.7 injuries per 100 workers. Most of those are back injuries and lacerations.
Likewise, there are a large number of anecdotal accounts of what it is like to work at Amazon available on the Internet on a variety of sites, describing both the dangers of the job (physical and psychological) and the demeaning elements, ranging from asthmatic workers who were taken off certain duties because the company acknowledged their asthma meant it was unsafe to do them being forced to go back to those duties, to workers suffering heat reactions due to being forced to work in a physically-intensive fashion in a hot space with no air conditioning, to workers being kept to such tight and demanding schedules that they felt they needed to urinate in bottles or waste cans in order to avoid falling behind, to confessionals about how workers regularly cry at work and see their co-workers crying due to the massive stress heaped upon them. If you care about the matter, those anecdotes will be fairly easy to find; perhaps "There are a lot of laws in place which broadly ensure that people are not treated badly," but they obviously aren't enough to stop Amazon in this regard, so they're not much comfort to the workers. A lot of what a person might reasonably consider abusive -- and let's be frank, none of us would want to work in a workplace plagued by the above issues -- is legal anyway; there is no law against your managers simply being uncaring jerks in a general sense, and there really cannot be.

I'm not a UBI fundamentalist; I don't think it will produce utopian results, and valid concerns regarding it exist. None the less, all over the world many workers are suffering on account of jobs in which they are economically trapped, and the UBI very much presents one possible means of resolving that. Unions have made some progress in improving life for workers, but globalization has largely beaten unions into decline in many countries. Law has made some progress in improving life for workers, but law is an imperfect medium which often fails the many while granting the few who win the "victim lottery" in just the right way a disproportionate reward (at the expense of consumers), which is why situations like the abuses at Amazon, or "MeToo" in general exist. Empowering workers to leave employers who they feel mistreat them seems like a more reliable approach in principle. I do not see anything especially arcane or difficult to follow about this "argument."

The compensation they get is not unreasonable, if you compare with, let's say, a small farmer trying to make a living on his own land. The real problem is that life is difficult and we must "earn our bread by the sweat of our brow" - that's just the way life is.
If their compensation is reasonable, then even in the presence of a UBI scheme, they will continue to do the work, as it's a reasonable amount of compensation for their time and effort, and they will still be able to acquire things they value with their earnings. Anyone who seriously believes that current wages are a reasonable trade off for all sorts of work has nothing to fear with regards to people not working under a UBI scheme. It's only if the compensation provided for certain types of labor, or for working under certain types of conditions, is actually at its core not reasonable that one must fear people dropping out of the labor force; it is only the employer who takes advantage of the economically precarious circumstances of his employees to underpay them or mistreat them, knowing that they cannot leave due to facing destitution if they do, that has anything to fear in this regard. So which is it? Is it true that, "The compensation they get is not unreasonable," in which case you have no need to worry about them abandoning their jobs? Or are you worried that they might decide to stop "earn[ing] [their] bread by the sweat of [their] brow," in which case, you're implicitly suggesting that they might not be compensated reasonably when compared to the circumstances of their employment? Because I for one actively enjoy my job, feel my compensation is reasonable, and would remain in it even if I had a UBI stipend. In fact, I'd even take a pay-cut to offset the stipend; I don't really need more money, because in my case, the compensation I get really is reasonable, and I am well-treated in my work place.

You seem to say that UBI provides a safety net which would allow people to take the time to seek better work. To argue that, you have to suggest some amount that would perform that function, an amount that would enable people to eat and pay their rent for the month or two it would take them to find a better job, but you steer clear of facing up to figures.
I "steer clear" of discussing the figures because the figures aren't actually the matter of fundamental importance. The actual value of money fluctuates; genuine productivity is what matters, not dollar figures. That said, okay, let's simplify the matter and pretend that the dollar figure is what is important. First of all, $30,000 a year is not a reasonable figure for the UBI in the United States as things stand; whether the Swiss consider that a reasonable minimum for their country is another matter, but in the United States, the cost of a basic life is nowhere near that. Moreover, the UBI should not be calibrated to the high costs of living in certain large American cities; even if we decide that maintaining a basic standard of living for all Americans is worthwhile, that's a very different thing than saying, "And we're going to do it at the cost level of a place like New York City or San Francisco." There are cities in America (to say nothing of non-city areas) where one can rent adequate accommodations for an individual for less than $700 a month, so let's use that figure for rent. 700 * 12 = 8400. Let's say for an absolute minimum standard of living we're willing to tolerate someone spending 40% of their income on rent (30% is more often suggested today, but that's to allow for some savings, and savings would be somewhat less important under an UBI). If $8400 a year (your rent) represents 40% of your income, then your income must be 8400*(10/4) = $21,000 a year. Still a non-trivial figure, but we've already saved $9,000 per year per citizen in comparison to the figure you suggested, so that's a victory of sorts. Moreover, let's say only adult citizens are granted the UBI; children already receive a "UBI" of sorts in the form of public education, so no need to double them up, and given the UBI empowers parents to stay at home with their children if they wish while continuing to receive pay, child care costs should decrease anyway.
 

Fox

Ad Honorem
Oct 2011
3,834
Korea
#69
  • Fox

    Fox

Part II

So with the above in mind, let's look at the census data:

-Total population estimate for July 2018: 327,167,434
-Population estimate adjusted for illegal immigrants who will not receive a stipend (Pew suggests about 11 million, which is probably an underestimate given the current narrative is, "This isn't a problem, stop worrying about it," but let's use this figure anyway as a safe minimum): 317,167,434
-22.6% of citizens are under 18 according to the census bureau, meaning 77.4% are over 18. 77.4% of 317,167,434 is 245,487,594 (rounded up).
-245,487,594 * $21,000 = $5,155,239,472,236, so let's just round it up to $5.2 trillion for easier math.

So we need about 5.2 trillion dollars in principle. Can American afford that? Well, the GDP of the USA in 2017 was $19.39 trillion, so this represents about 27% of GDP, meaning the productivity is obviously there, leaving only the matter of logistics. Social Security by itself is about a trillion, it is funded directly by taxes (meaning those funds can be seamlessly redirected), and there's no need to maintain it in the presence of a basic income, so we're down to $4.2 trillion needed. I'm going to be controversial here: Medicare and Medicaid are something of a mess, and that sort of thing would probably be better handled either by a genuine universal health insurance scheme (with strict price controls and heavy regulation of the medical sector in order to come out at cost levels comparable to other developed countries) or at the state level, so I'm going to cannibalize them and toss them into the UBI as well; you could argue, "We can't do that!" but we very much can, and the question is whether this can be funded, not . Together, they come out to about $1.37 trillion, so that leaves us with $2.83 trillion to fund. Next, as I already mentioned, a scheme like this is going to require a serious military reduction from a country like the USA. The base American military budget is about $716 billion. Note that this is not actually the amount the United States spends on its military; this is the basic budget, onto which additional contingency funds are appended on the basis of on-going military adventurism. Let's just round it up to $830 billion dollars; the actual number is higher than that, but that makes the math easier, and being conservative is the better approach when attempting to demonstrate financial feasibility. Let's leave $100 billion of that for the maintenance of some sort of national defensive force, so that means we can cut $730 billion dollars, dropping us to $2.1 trillion still in need of funding (aside: we just achieved the moral victory of no more wars of aggression throwing other countries into chaos, at least at America's instigation). Foreign aid makes up a relatively small portion of the budget (about $50 billion), but while we're giving up meddling with the world militarily, might as well redirect that non-military meddling to the benefit of American citizens as well, dropping us to $2.05 trillion. So far we've covered a huge portion of this cost with a few fairly straightforward eliminations; perhaps some of them are controversial, but hey, bombing foreign countries and dumping money on the pharmaceutical industry in a mandatory, tax-payer-supported fashion is controversial as well, so let's not be scared by some controversy, especially since this is a consideration of feasibility and an exploration of possibilities rather than a stringent policy demand; there would be plenty of room later to discuss the details of implementation and what sacrifices society was genuinely willing to make should such a policy actually be considered.

Let's get a bit more technical now. Federal payrolls sit at about $276 billion as things stand. But there's no reason to maintain current salary or benefit levels in the face of a UBI scheme; part of the benefit of the UBI, after all, is that employers can pay less in wages in the bargain, and long-term policies like defined benefit pensions become less necessary. The exact details would need to be worked out with consideration more careful than this, but let's eyeball it by cutting payrolls in half to make up for the UBI stipend on average, saving ourselves $138 billion in the bargain, and leaving us with $1.912 trillion to fund. We're in pretty reasonable territory now. Undoing the Bush tax cuts alone could bring in another $200 billion a year, and merely increasing the top bracket on the top 1% of households to 45% could bring in another $276 billion, which would drop us to $1.436 trillion still in need of funding. even back in 2013 taxing capital gains as normal income would have brought in $161 billion per year, and accounting for inflation and growth since then, $200 billion seems a reasonably conservative estimate, so that reasonable policy would bring us down to $1.236 trillion still in need of funding. We'd probably want to take it farther than this: historically, the top marginal rate was 94%, and while we probably wouldn't want to go that high, we can go quite a bit higher than 45% without destroying the economy. Let's say we raise it enough to bring in another $426 billion a year, much pulled from the top 1% of households, but some distributed across the middle and upper middle class as well. That would leave us to $800 billion to fund. And finally, I'd recommend simply issuing that 800 billion in new currency every year. The American economy can absorb that amount of inflation annually without collapsing into some Zimbabwean-style inflation Hell, and the moderate-but-steady pace of currency inflation would incentivize spending or investment over saving, which is okay given the UBI provides the security one would normally need saving to acquire. You lament that, "I think we all agree that printing money, as a long-term policy, would probably lead to inflation," but some inflation is acceptable, possibly even economically beneficial. An economy with a GDP of 19.39 trillion dollars a year can absorb the inflation induced by issuing 800 billion dollars of new currency per year. Indeed, when one considers the impact of policy like quantitative easing and the sort of money-multiplication which results from bank industry chicanery, it already absorbs quite a bit per year anyway. But even then, if we felt concerned about the potential impact of issuing 800 billion dollars a new, we could simply ask people to tighten their belts slightly and ask them to accept a "mere" $20,000 a year instead of $21,000 a year, which would save us about $245 billion a year, meaning we'd only have to issue $555 billion. And even then, we could ask them to accept a "mere" $18,000 a year and need to issue only $65 billion a year, a true pittance whose inflationary impact might not even be observable in the wake of bank-induced inflation fluctuations. A couple each subsisting off of an $18,000 a year basic income would together receive $36,000 a year, while in 2017, the poverty threshold for a household of 4 (which is to say, if they had 2 children) was $25,100. In other words, even if we decide we don't want to bear the inflationary cost of our original generosity, we could still revise downwards substantially and end up well above the poverty threshold.

This is possible. This is affordable. It ignores the savings accrued to the states, it ignores the potential economic benefits of a "demand floor," and it ignores the fact that some of the inflationary pressure of issuing new currency would be cancelled out by lower wages. The whole matter is a lot more complex than the math above suggests, but that's exactly why trying to reduce it to math doesn't make as much sense as intuition might suggest. You might argue that you personally do not want to afford it, but that's a very different matter.

Considering health and education, it is generally agreed that these are things worth paying for, because just about everyone wants to be healthy, moreover healthy people are more productive, and just about everyone wants to have their children educated, and a generally well-educated population is, again, more productive. I can't see that anyone has shown real benefits, across society, of UBI, as against having targetted social security, especially considering the likely costs (and cost is extremely important, if there just isn't the money to finance a policy, that means that the policy cannot happen).
"Generally agreed" is just a declaration of the status quo. A hundred years ago, what was "generally agreed" was very different than what is "generally agreed" now. Were you born into a society with a functioning, successful UBI regime, you and others would "generally agree" that it was worthwhile. I'm not saying there are no valid potential concerns with the implementation of a UBI scheme, but your own argument does not really articulate any of them in an especially effective way, and it's not clear to me you have any solid objection beyond a vague feeling of dread in the face of potential major societal change.
 
Last edited:

Fox

Ad Honorem
Oct 2011
3,834
Korea
#70
  • Fox

    Fox

And in closing, note that the budgetary savings and redirections I was able to scrounge up are substantially less than would a skilled accountant with a deep understanding of both federal and state policy and budgeting. There are many individual programs which could be reasonably reduced or eliminated in pursuit of the basic income, both at the federal level, and at a state level (which would leave those funds available for redirection to a federal program, should our society truly desire it). The question of "affordability" is not really on the table any longer; a massive economy like that of the United States of American can obviously afford a policy like this should it wish to do so. The question is one of preference; one of how we will utilize the productivity we have, and towards what ends we will strive. And that's a topic regarding which reasonable people can disagree; there is no singular "right answer" with regards to many objects of national policy. Some might prefer to continue waging wars of aggression against other countries, meaning they would not want to redirect military spending into a UBI scheme; some might want to continue subsidizing the investment income of the wealthy, meaning they would not be comfortable with tax hikes on the top 1% or the reclassification of capital gains as standard income; and some might prefer to continue dumping money on the pharmaceutical industry, meaning they would not want to see changes to the way in which society handles medical care. I'm not going to opine on whether those preferences are legitimate or not, but rather, simply point out that they are choices, and they too come with a cost. Let's not pretend they are somehow brute facts of life just because they are parts of the status quo, though.
 

Similar History Discussions