19 votes

Alaska’s universal basic income problem

20 comments

  1. [16]
    Sahasrahla
    Link
    I feel like some people (Yang included) overstate the extent to which Alaska's program really counts as UBI (since it fails to meet the "basic" part in letting people cover their basic needs) but...

    I feel like some people (Yang included) overstate the extent to which Alaska's program really counts as UBI (since it fails to meet the "basic" part in letting people cover their basic needs) but it still makes for an interesting case to look at. My impression from this article is that, 1. the program is widely popular and apparent moves to get rid of it would be political suicide, and 2. politicians can use it to bribe voters with extra cash and then use its expense as an excuse to cut other programs.

    The second point is the crux of the article (and ties into one of the main left-wing criticisms of UBI as a conservative Trojan horse to eliminate all other social spending) but what they don't point out is the same thing already happens outside of Alaska in just about every democracy on Earth. Politicians (usually conservative) promise free money in the form of tax cuts and tax credits and then they use the excuse of lower revenue to cut programs they dislike for ideological reasons. More generally, politicians across all ideologies frequently offer expensive things people like (money, better programs) and then fail to deliver fully on those promises while still making cuts. The promise of an increased UBI could be used by politicians in the same way as a promise of tax cuts or more spending, but I don't think this article has quite made the argument that it would be a more effective tactic (or fundamentally different) than what unscrupulous politicians can already do.

    Still, it's something to think about. Maybe this is a point in favour of implementing UBI not as a simple cheque mailed to everyone but instead as a negative income tax / mincome. That's the implementation that usually gets proposed/tested here in Canada (in short: you get the full amount of the UBI if you have no income, and if you start to earn money the UBI amount you earn gets slowly scaled back such that every dollar you make costs you less than a dollar of UBI) and it's the implementation I personally prefer. One of the main criticisms of mincome is that without everyone getting a cheque people might not support the program or they might support cuts to it more easily, but this article highlights a potential benefit: if not everyone is getting money directly (i.e. if it's more of a safety net where you get money if your income drops) then it would be more difficult for an irresponsible politician to use it as a direct cash bribe to voters.

    I have to admit though that I'm looking at this from a different political system. If many American voters still have the "why should I pay for someone else's healthcare?"* attitude then it would be difficult to convince people of the utility of a mincome. Yang's framing of the issue as "tech companies make a lot of money, let's take some of it and distribute it as a dividend" is probably an easier sell.


    * Short healthcare rant

    Completely off topic but can I just say how much I hate this argument? Leaving aside any moral or practical argument for universal healthcare, if you have private insurance you're still paying for someone else's healthcare. That's how insurance works: you pay premiums, everyone else pays premiums, and then that money goes into a big pile that (when the insurance company can't avoid paying out) goes toward the cost of helping people with whatever risk they've insured against. One big difference between a private and public scheme though is that a private healthcare company will siphon off a lot of that pile of money as profit. So not only is a person with private health insurance paying for someone else's healthcare but they're also paying for someone else's yacht. It's amazing in the most terrible sense of that word that so many people are okay with this.

    20 votes
    1. [9]
      skybrian
      Link Parent
      I think the lesson from Alaska's program is that UBI should have a stable source of funding and should never be cut. Once people start relying on it being a certain level, cuts become deeply...

      I think the lesson from Alaska's program is that UBI should have a stable source of funding and should never be cut. Once people start relying on it being a certain level, cuts become deeply unpopular. Social Security is the same way.

      I'm an advocate of UBI but I don't think it has to start at $1000/month like Yang advocates. It could start at around $2000/year like Alaska and that would still help a lot of people living on the edge, start answering some of the questions people have about what the effects will be, and be a big step forward philosophically.

      I find it philosophically appealing regardless of whatever level it starts because, in a time when inequality is very high, we are returning to the notion of civic equality and shoring it up by saying that every citizen is an active participant in the economy who can be trusted with some spending authority, as of right. It's driving a stake into the heart of the old notions that "if you don't work, you can't eat," that people who don't work have no worth and can't be trusted to spend wisely.

      13 votes
      1. Omnicrola
        Link Parent
        This POV is the essence of the whole matter for me personally. There's a very deeply embedded psychological need for us all to feel like we're contributing to society and to be appreciated for it....

        It's driving a stake into the heart of the old notions that "if you don't work, you can't eat," that people who don't work have no worth and can't be trusted to spend wisely.

        This POV is the essence of the whole matter for me personally. There's a very deeply embedded psychological need for us all to feel like we're contributing to society and to be appreciated for it. The vast majority of the time this translates into getting a job that pays money. But as Yang and others have pointed out, there's a ton of ways to contribute without getting an actual "job". Being a stay at home parent is the most obvious. The reason most of us get a job is not because we are truly invested in the work, it's because we need a way to pay our bills.

        Is the whole concept of not having a job but still being able to live a meaningful middle class life a utpoian dream? Goddamn right it is. And we all deserve it. And if we all fight for it, it can happen.

        12 votes
      2. [7]
        Algernon_Asimov
        Link Parent
        $38/week isn't even close to a Universal Basic Income. It's not going to change anyone's life. If someone is living on the edge, it's handy (but any money is handy at that level). As the article...

        It could start at around $2000/year like Alaska and that would still [...] start answering some of the questions people have about what the effects will be,

        $38/week isn't even close to a Universal Basic Income. It's not going to change anyone's life. If someone is living on the edge, it's handy (but any money is handy at that level). As the article says, "for many rural Alaskans, a big PFD can mean the difference between a year of hunger and a year of plenty".

        However, it's not going to change how employed people behave. It's not going to encourage anyone to move from a higher-paying job to a lower-paying job just for the sake of doing something they love. It's not going to give anyone the confidence that they can resign from their job to start that business they always wanted to run. It's not going to help people who decide that they want to spend their time in the arts.

        An amount that small isn't going to make any difference, and can't possibly answer any questions about the effects of a UBI.

        Even a test UBI needs to be significant. It needs to be high enough to change people's lives, or encourage them to change their own lives. A piddling $38 per week won't do that.

        10 votes
        1. [6]
          skybrian
          Link Parent
          Yes, there are questions it wouldn't shed much light on, and many people for whom it wouldn't make much difference. But it seems you're stuck in binary thinking! First saying it will change...

          Yes, there are questions it wouldn't shed much light on, and many people for whom it wouldn't make much difference. But it seems you're stuck in binary thinking! First saying it will change nobody's life, then admitting it will help for some, then going back to saying it won't help.

          There is another possibility: it will make a difference for a small percentage of the public. There are always a few people on the edge of a decision where something is barely worth it or barely not worth it (like working versus taking care of the kids, or taking a second job versus not) and change their minds. Statistically, the change should be measurable.

          4 votes
          1. [4]
            Algernon_Asimov
            Link Parent
            There is a difference between helping someone and changing their life. The whole point of a UBI is that it would free people up. It would free people from poverty and it would free people from...

            First saying it will change nobody's life, then admitting it will help for some, then going back to saying it won't help.

            There is a difference between helping someone and changing their life.

            The whole point of a UBI is that it would free people up. It would free people from poverty and it would free people from being trapped in a job they don't want.

            Giving unemployed people some extra money every week isn't going to magically turn them into employed people - it'll just make their poverty more bearable.

            But $38 per week isn't going to change much for employed people. If you received $38 per week, would you change your life? Would you start a business? Write a novel? Develop a start-up? Become a full-time musician? Is that enough money for you to consider yourself free to consider other options?

            5 votes
            1. [3]
              skybrian
              Link Parent
              I agree that most people (anyone with savings) probably wouldn't be affected. But the future is not so predictable that we can confidently say this is true for everyone. Sometimes small events...

              I agree that most people (anyone with savings) probably wouldn't be affected. But the future is not so predictable that we can confidently say this is true for everyone. Sometimes small events cascade and that can change your life. Going to one party versus staying home can change your life, if you meet the right person. Being in the wrong place at the wrong time can change your life, if you get into an accident. People can lose their jobs due to an unpaid traffic ticket.

              So, for some people, who need to track money closely, might having a few more dollars in your bank account do it? I'm reminded of a Dickens quote:

              “‘My other piece of advice, Copperfield,’ said Mr. Micawber, ‘you know. Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery."

              David Copperfield (1850)

              6 votes
              1. [2]
                Algernon_Asimov
                Link Parent
                Okay. So, coming back to the original point... If most people wouldn't be affected by a trial of UBI valued at about $38 per week, how would such a trial "start answering some of the questions...

                I agree that most people (anyone with savings) probably wouldn't be affected.

                Okay. So, coming back to the original point...

                If most people wouldn't be affected by a trial of UBI valued at about $38 per week, how would such a trial "start answering some of the questions people have about what the effects will be"? If the effects aren't noticeable for most people, how would this trial tell us what the effects are?

                That's like testing the effects of sugar on human health by giving everyone one sugar cube per day. It's barely noticeable. It would be hard to find any statistically significant outcomes among the noise of normal life

                A true trial of UBI has to use a large enough amount to bring about noticeable effects in people's lives.

                4 votes
                1. skybrian
                  (edited )
                  Link Parent
                  The problem with your analogy is that people eat similar amounts of food, but they don't earn similar incomes. The same amount of money has a different meaning depending on whether you're middle...

                  The problem with your analogy is that people eat similar amounts of food, but they don't earn similar incomes. The same amount of money has a different meaning depending on whether you're middle class or poor. (Let alone rich.)

                  When you talk about "most people" you are missing the point.

                  Edit: I'll add that the people of Alaska seem to consider their permanent fund dividend more than "noticeable". It's very popular. Maybe it's because it happens once a year? And there have been studies done on it which seem to have found some effects.

                  2 votes
          2. Amarok
            Link Parent
            Honestly, it should be pegged to external factors rather than a fixed amount - that would sidestep the issue of people wanting to vote themselves a raise every cycle by breaking that habit before...

            Honestly, it should be pegged to external factors rather than a fixed amount - that would sidestep the issue of people wanting to vote themselves a raise every cycle by breaking that habit before it starts. It'll insulate the dividend from inflation too. I'd peg it just below the poverty line at the federal level. State and local programs can do whatever they like on top of it.

            If automation continues to improve and we end up with more resources, the next best step is to reduce the length of the work week by a day rather than boost the basic income again.

            3 votes
    2. [6]
      Omnicrola
      Link Parent
      I'm a fan of Yang, but I'm glad that some close examination of UBI is being done. Overall I still think it would result in a net positive for society, but the devil is in the details. This is one...

      I'm a fan of Yang, but I'm glad that some close examination of UBI is being done. Overall I still think it would result in a net positive for society, but the devil is in the details. This is one of the details.

      As you say, I'm not sure the articles main point stands (sketchy politicians will always be sketchy) but the behavioural ramifications of UBI need to be thought out and considered carefully.

      6 votes
      1. [5]
        mike10010100
        Link Parent
        And this is precisely where I think Yang and his Gang have fallen short. They've spent all their time creating rose-tinted infographics and bulletpoint lists, but are actually just cherrypicking...

        the behavioural ramifications of UBI need to be thought out and considered carefully.

        And this is precisely where I think Yang and his Gang have fallen short. They've spent all their time creating rose-tinted infographics and bulletpoint lists, but are actually just cherrypicking positive aspects while completely ignoring the real-world issues with implementation details. The fact that Alaska is one of the few implementations they can point to as a marker for success makes this article all the more valuable when analyzing the effectiveness of UBI.

        5 votes
        1. [4]
          skybrian
          Link Parent
          I'd like to see more serious attempts at this too, but there are many unknowns and I don't think the results can be accurately predicted. It's like trying to predict freeways, suburbs, and...

          I'd like to see more serious attempts at this too, but there are many unknowns and I don't think the results can be accurately predicted. It's like trying to predict freeways, suburbs, and drive-through restaurants after the invention of the automobile. Or anticipating modern elections when the Constitution was written.

          This would be a bet on freedom, and it's a risk. Give people more freedom, and they will use it in innovative and surprising ways.

          (But sure, I can speculate, if anyone is interested.)

          2 votes
          1. [3]
            thejumpingbulldog
            Link Parent
            Honestly, is it a bad thing to try to have it all completely figured out by the time a law is passed? It seems to me we have this mentality that we must have it completely perfect by the bill is...

            Honestly, is it a bad thing to try to have it all completely figured out by the time a law is passed? It seems to me we have this mentality that we must have it completely perfect by the bill is passed, but why not try to make amendments, additions, and subtractions as we discover new data and ideas. I believe it referenced in the article about some lawmakers wanting to affix it to a certain amount to stop the political manipulation of it, and while they can't due to the volatility of the oil market, maybe under a tax-based system we could. I know saying the US government working as a cohesive unit to tackle the challenges of the day is like asking for rain in the desert, but I'm just thinking out loud. We tend to do the same thing in the design process, why not try to do the same with our laws and bills?

            5 votes
            1. [2]
              skybrian
              Link Parent
              There is certainly an argument to be made for trying things out at a smaller scale and then scaling things up nationally. Maybe doing randomized trials, too? This doesn't seem to be how...

              There is certainly an argument to be made for trying things out at a smaller scale and then scaling things up nationally. Maybe doing randomized trials, too? This doesn't seem to be how presidential politics works, though, so we're left with debating policies based on the data we have.

              1. thejumpingbulldog
                Link Parent
                That's fair, what I'm saying isn't necessarily realistic as much as a wish for what things should be.

                That's fair, what I'm saying isn't necessarily realistic as much as a wish for what things should be.

                1 vote
  2. [4]
    patience_limited
    (edited )
    Link
    Norway also has a large sovereign wealth fund derived from non-renewable oil and gas revenues. But they planned on the basis of variable pricing, continued to collect tax revenues on an income...

    Norway also has a large sovereign wealth fund derived from non-renewable oil and gas revenues. But they planned on the basis of variable pricing, continued to collect tax revenues on an income basis for public services, and now have a $1 trillion reserve which will continue to grow on its own. Norway can divest from fossil fuels without extracting every drop, in the face of devastating consequences from further carbon emissions.

    Alaska, on the other hand, has its entire government running on revenues from non-renewable energy sources. The corporate revenues from that resource extraction are currently being reinvested outside the state, without taxes on the profits of transfer.

    Even if Alaska drilled and mined everything, there's an end in sight, after which the state will have little capital invested for a sustainable tax base. When that end is reached, the state fund might have less than a tenth of the savings, per capita, that Norway has achieved.

    Essentially, the Alaskan people are receiving small dividend bribes now, to look away from the party asset-stripping their future. Climate change is likely to cause devastating changes to the state's environmental capital - loss of fisheries, wildlife, forests, and land.

    6 votes
    1. [3]
      flip
      Link Parent
      Yeah, that is the part that no one talks about, really. We have a similar experience here. During the O&G boom, tiny cities got a huge influx of money, a few states as well, so did the Federal...

      Yeah, that is the part that no one talks about, really.

      We have a similar experience here. During the O&G boom, tiny cities got a huge influx of money, a few states as well, so did the Federal Govt. (our structure is a tad different from the US).

      Did the cities invest in improvements? No, they did cool New Year's Eve concerts, they repaved the coastal walkways, they saw a lot of that money disappear into the pockets of politicians and their ilk.

      Did the states do anything productive with their share? Also no, also a lot of corruption, wasting on stuff that wasn't important, etc.

      Did the Federal Govt. use that to set up a fund that could make that money grow and grow? Well, I believe it's easy to see where this is going...

      So we had a rather relevant environmental impact, we have zero long term benefits, and once oil prices went down, shale became more accessible, etc., we basically started losing money for pumping oil, making our national oil company lose money the more it sold its product. Yes, losing billions and billions to corruption doesn't help, but if we had followed the Norwegian model, maybe we'd be in a better place.

      Alas....

      And, to make matters worse, we have a system that is similar to an UBI, but only targeted at poor people and that became a political issue (like in Alaska), it created a whole mess of people that simply stopped working/looking for work, and now we have a huge issue with the 18-25 range of the population.

      So yeah, good times.

      I'm still in favour, theoretically, of UBI. But I fail to see how it can resist the fate of all good ideas: human nature fucking it up.

      4 votes
      1. [2]
        skybrian
        Link Parent
        Which country are you talking about?

        Which country are you talking about?