Capitol Hill Blue Forums Political Issues Finance, the economy & Economics Universal Basic Income? Guaranteed Job?

Any serious government activity requires money, usually a lot of it. The first task is to right the economic ship by increasing taxes on those who benefit the most. Once that happens, though, those who object will scream "redistribution!" Of course, EVERY government activity is "redistribution"- which is exactly the point. If we don't do something about it now, it will be too late later. Opportunity cost.

I just got back from a long driving trip, so got to listen to lots of radio stations. Funny thing that, in the desire to not retrace the central valley I5 corridor that I took going up, I crossed over the Sierras on Sonora Pass (beautiful!), and on the east side of the mountains I was unable to find a single NPR station for more than a whole day of driving.

But I did get all the Christian radio my little heart desired. One program was the Wall Builders - I don't know that they took the name from il Douche de L'Orange, but I'd say they are in his camp - and they were talking about socialism and capitalism. One of their premier intellectuals has studied history more thoroughly than the usual group of self deluded mainstream historians and has discovered the truth of things. One major truth is that the Pilgrims fled Europe to escape the oppression of socialism. Yet when they arrived in the New World, they went ahead and kept with the "from each according to their ability, to each according to their need" creed. After a significant number of them died from starvation they switched to a private property and free markets thing and everything was good after that... fat and happy.

Proof positive that greed is a better motivator than starvation for getting people off their lazy arses and succeeding like Trump!

All that history got me to thinking - the core concern about socialism is that lazy people will take advantage of industrious people, and that just ain't right. In the extreme, under socialism nobody will do anything, because it isn't fair, even to the point of dying.

Which brings forth the question... are humans all too stupid and lazy to be trusted with a socialist system?

Would a universal basic income really feed an instinct to laziness?

Well, we were talking about the increase in automation that has decreased available manufacturing jobs and in the future might eliminate a lot more. So I don't think the old concerns are important anymore.

People would still work if they wanted to in service jobs. They could make some cash over the UBI, so a lot of people would probably do it. A lot of people make a great living now in service jobs or owning service businesses. And I doubt the UBI is going to supply everybody with steak and lobster.

Let me guess Loggy, he got his history degree at Butt F$ck U.

I started out with an earnest question, then got a little sidetracked with the Wall Builders anecdote.

The question is: would a UBI encourage people to be nonproductive?

I suspect it would make people more productive, if anything. Japan has historically had among the highest rates of productivity with the lowest rate of wage disparity, lower rates of employee turnover and higher mean wages than most. It also has a pretty extensive social net, and single payer healthcare. Less instability more productivity. Better distribution of wages better work ethic. Less fear of loss of income, better and stronger social contract.

Caveat regarding Japan. They are an enclosed monoculture, with outsiders viewed-- at best-- as less than acceptable. They abhor immigrants and go out of their way to disallow them as citizens.

Okinawan’s are viewed by mainland Japanese as “southern scum”. And not quite regarded as real “Japanese”. If anyone disagrees with my assessnment I am all eyes. And ears.

I caveat your caveat and raise you:
The insular character of Japanese society began to change (and open) in the late 19th century (the Meiji period). After WWII that accelerated. In the early 2000s I was in Nagoya, Tokyo and Kyoto for close to a year. They are enamored with Western "culture", to their detriment in my opinion.
Nonetheless, that is not germane to the comments on the economic framework in post WWII Japan. Although I will say, again to their detriment, even that framework has been changing lately, for the worse.

We did defeat them and then did not enslave them (like they would have done to us). So that may have affected the way they saw us.

Earlier in this thread I addressed this question (with links). Rather than going back, I'll just say that the evidence is mixed. As I recall, the highest level of actual "loss" of incentive was around 5%, while another study showed it actually increased productivity (for the reasons that Ezekiel posited). It was also noted that the decrease in work was primarily attributable to social factors outside of employment (e.g., pursuing education, birth of children). Those may be actual social goods that improve the nation rather than employment detriments.

My opinion is the same as Zeke's - I believe that the social stability will increase productivity, just as Social Security did, and as Worker's and Unemployment Compensation have.

BTW, the same is true for taxation: the economic friction that occurs is primarily the result of volatility in the tax structure, not the actual tax rate. There is very little evidence that increasing taxes actually decreases productivity (and the opposite may be true). It's a canard of anti-government economists (without empirical support) that as taxes increase, people invest less. In actual fact, when taxes are sufficient to cover government expenses (i.e., not increasing deficits) the economy improves. (Tax Cuts Don't Lead to Economic Growth, a New 65-Year Study Finds) The opposite can be directly shown: State Personal Income Tax Cuts: Still a Poor Strategy for Economic Growth. The reality is that tax cuts cause deficits. Tax Cuts: Myths and Realities (I'm trying to re-find literature on it, but there is evidence that every modern recession has been preceded by a tax cut.)

So, what does all this have to do with UBI? The point is that nothing stimulates an economy more than consumption. A Tale of Two Tax Cuts. When economic benefits go to the lowest end of the economic spectrum that results in increased consumption and increased Aggregate Demand (stimulus). When they don't, it does not. The UBI, like tax "credits" (not deductions), would also increase aggregate demand, and thus improve the overall economy. (Some caveats, here. In the short term, a UBI would increase government debt. Unlike tax cuts, however, this debt would be offset - with a lag time - by increased revenues from taxation associated with increased aggregate demand. Tax cuts, on the other hand, reduce government revenue, but do not increase demand (supply-side economics). So, the deficit increases, but there is no offsetting increase in revenues to tax.)