Universal basic income (UBI) is often dismissed as unaffordable, unrealistic, or politically impossible. But the conversation I had recently with Howard Reed and Elliott Johnson of the Common Sense Policy Group at Northumbria University left me less sure of that.
The Group’s research challenges the Treasury orthodoxy in two important ways:
Public investment multipliers are far bigger than assumed, and
Even current spending has a strong multiplier effect, meaning it can pay for itself
And if the economic case for investment is stronger than we’ve been told, then the political question changes too: why aren’t we investing in that case?
Even I can’t be bothered to wade through the bullshit to check but an assumption.
They’ve looked at the gross effect. Which isn’t correct. What we require is the net effect.
So, as we all know all, taxation has a deadweight effect. Economic activity that does not happen as a result of taxing. Sure, sure, we can use the money raised – and MMT doesn’t change this as we must still tax to curb the resultant inflation – to do such wonders. But we lose what would have happened without the tax.
Thus any multipliers must be nett – outcome minus what would have happened without the action.
At current levels of taxation deadweights are estimated – very rule of thumb – at 30 to 50% of the sum raised. Therefore multipliers must be greater than 1.6 to 2x in order for the outcome to be greater than what is lost.
Are they?
UBI is affordable, but it’s more of a grinding poverty level of affordable. You can eat, exist etc.
Personally, I’m in favour of this. Single UBI payment. All your bills have to come out of it. We’ll empty London of people on the dole. Go live in old Nottinghamshire mining villages, live on beans on toast. You want the nice stuff, you have to go to work. It would remove the disincentives to work.
The lefties just want even more state.
bring back the workhouse!
‘Can I have more?’ No!
Pretty sure that if slappers were offering blowjobs at £15 a pop, they’d get takers. So, £30 an hour. You just need the punter to have a car and some Trebor mints.
About the only way to make it sort of affordable is to make it absolutely universal.
Because if you start checking for fraud, that gets expensive really quickly. Means checking adds lots more, and differing amounts also does that.
We don’t know how to do it otherwise.
Which also means the cheque will be really small.
And it will be unpopular because everyone will want more. Or you’ll end up with welfare again.
It’s easier to detect UBI fraud than benefit fraud.
I suppose it would be, since you’re checking for fewer things. Does this person exist and is currently living is about the extent of it.
Checking that the person is a citizen starts getting complicated. I’m assuming you’re not giving cheques to anyone who can recite an address.
Benefit fraud has a long checklist of things, since those things both check whether you should be getting any money, and also how much.
Ha! You’re still thinking they’re proposing a Citizen’s Basic Income. No, it’s morphed completely into a UNIVERSAL basic income. Open to all comers.
He won’t have checked it either. It’s the answer he wanted so it must be right.
Very much so. Putting the words “Common Sense” in the name of your policy think tank lets you swerve checking if your policies are any good. The message is that they must work, it’s just common sense.
Common sense says comparative advantage is wrong.
And you don’t show a graph of UK deficits ‘cos that would be testing the theory – that when spending keeps going up then all that taxation is coming back in greater amounts due to multipliers.
It’s a red flag when people use a name that is emotional rather than factual. It means they have a self-righteousness rather than a thought through ideology.
And “common sense” is one of those expressions I hate. There are things in life that are common sense, like don’t step on Lego, but people apply it to groupthink.
Common sense is the ability to see past the intended outcome to likely outcomes, and lower order outcomes, and on that basis decided whether the proposed action is worth doing. Good builders and plumbers have it; goupthinkers less so.
Bunch of cunts alert!
Oh look, another magic money tree!
The point with UBI (and neither of the people he lists, least of all him have been able to answer this) is this:
I got crickets to all three of the questions above or at best answers that kicked the can down the road. I understand the desire behind it, especially with AI and useless mouths but I can’t see it working.
“Regional variations: What you need even in different parts of certain cities and parts of the country will be wildly different.”
Work out the median value, maybe a bit less. Rents in say, Northampton. If people decide they want to move to some absolute shithole with cheaper rents, they get to keep the difference.
“What happens for people who are drug addicts, chronic alcoholics, compulsive gamblers? They would do the payment in one day? Do they then require more? Removing the payment from any sort of conduct covenant means you are effectively subsidising pathology”
They can sort their shit out.
“Are immigrants entitled to it? And if they aren’t what kind of enforcement is there to prevent them claiming it?”
Non-citizens? No. We have National Insurance numbers don’t we? We know which of those are citizens or not, right?
Regional variations in cost of living and desirability are one of the major problems with standardised pay scales.
Yes, but that’s because we need to have nurses in Oxford. We don’t need chavs to be in Tottenham. They can sit around watching This Morning in Merthyr.
Half of the total national housing benefit cost is spent on London. We house barely working people in Tottenham, and have people commuting in from outside. It is utter madness.
Chav? That’ll be “Mr. Lammy” to you.
A major problem is attracting good people to work in
shitholesless desirable areas like Grimsby. If the hospital could set its own rates to attract better people, like a market would, then they might go there, but national pay-scales prevent this, so Grimsby is stuck with poor quality senior medical staff. If you’re going to be paid the same whatever, why bid for a shithole?Fuck NHS pay-scales. Open everything to the market. Then NHS staff can find out what they’re actually worth, and it may be a surprise in either direction.
You’ve got it the wrong way around. Teachers are gagging for jobs in Lincolnshire. You get the same money as Oxford but your housing is a lot cheaper.
The real problem is places like Oxford, Reading, Guilford. The bits of the country that are expensive, but just outside London weighting.
It’s why my daughter didn’t even look at Oxford when applying for pathology jobs in the NHS. £1400/month to rent an apartment around Headington vs £700/month in Newport, Gwent. Of course, if Oxford just knocked down all the old crap in the centre and built on the greenbelt there wouldn’t be any housing shortages around there.
…if Oxford just knocked down all the old crap in the centre and built on the greenbelt there wouldn’t be any housing shortages around there.
“…the old crap in the centre” has an economic value deriving from its cultural and aesthetic value. Tourists, like most people, value beauty. People don’t visit ugly places voluntarily.
As for the Oxford green belt, build, baby, build – though just as better roads increase traffic, more accommodation around Oxford will increase demand, so prices might not fall…
Something I would love to know (and I’m not loading this one way or another) is the cost of tourists. No-one ever considers this. That if you have an old building, that’s land where an office, factory, car parking or a better road could be.
There’s places where the alternative value is so poor, that you might as well do it. Walt Disney World was built on Florida swampland. No-one wants to do anything else with Stonehenge than have a neolithic monument on it. But inside cities, there is a cost. Buckingham Palace sits on land worth about a billion pounds.
“They can sort their shit out.”
Thats easy to write on a blog comment. Its a bit harder to actually enact and then enforce. Because the bald facts are that c.10-15% of the population are functionally useless. Due to a mixture of mental health, physical health, alcohol and drug related issues (usually the latter two making the former two worse) they are unable to live in modern society if they do not get given everything handed to them on a plate. Housing provided and managed for them. Money in their bank account every month to pay for their ‘needs’, a lot of which will be drink and drugs anyway. No requirements to actually do anything with their time other than wile the hours away until the next drink or drug binge.
If you remove the system that supports such people today and replace it with a ‘here’s a basic minimum of money for the month, thats your lot, sort everything else out yourself, don’t come crying to us when you’re run out after 5 days, you’re on your own now sunshine’ tough love type system then you are going to get people literally dying the gutters. These people cannot function in the way you or I could in such circumstances. Many of the reasons they are where they are is because of their inability to make good decisions. So even when faced with obvious catastrophe (there will be no money for food/rent/heat next week if I spend it on drugs now) they will still do something stupid with it today, because thats what they’ve always done.
The question is what then happens. I would predict that politically in a Western society that people starving to death and dying on the streets because they’ve been evicted for non payment of rent etc would not be considered acceptable. And you would rapidly replace the tough love system with something that is pretty much the same as we have now. Because a large proportion of the rest of society won’t accept the harsh outcomes of such a welfare system.
Whatever way you decide to reform the welfare system you have to have some process by which the changes are seen by the rest of society (pretty much all of it, not just the 30-40% who vote for one party or another) as being far, and stand a reasonable chance of remaining in place across changes in governments. Then you might start pushing the recalcitrant 10-15% in the right direction, learning to stand on their own two feet. But going cold turkey on them just isn’t going to work. A change of government in 5 years will just undo all the changes and you’re back to square one.
So what happens with drug addicts now? Do they not get money now, do they piss it up the wall on smack?
Of course, we could also legalise drugs which would massively lower the costs.
Currently a lot of what they get is in kind, so it’s difficult to piss it against a wall. Subsidised housing, free (at point of use) healthcare, bus passes, etc. etc.
But, as Jim says, if you switch to UBI, where all* of that is replaced by a single cash benefit, lots of people won’t be able to cope with the organisation, budgeting and basic self-restraint that requires.
(OK, probably no-one is proposing replacing healthcare with a cash payment under UBI, but certainly it’s a major issue for the housing)
Welfare is no part of central government’s proper function, but having made it so is a large part of the current debt/welfare death spiral.
Assuming welfare is part of any layer of government’s proper function, it ought to be local government: reconnect what is spent with who it is spent on, visible and accountable to the people who pay for it, and so that those on the receiving end know that they are being not merely looked after but also watched for good behaviour.
Welfare is no part of central government’s proper function.
It is now. So it has to be limited…
c.10-15% of the population are functionally useless.
ISTM that the underclass is 25%-30%.
…politically in a Western society that people starving to death and dying on the streets
No need for that. The change is phased in. Benefits are immediately cut to below the NMW and then time-limited to between 1 and 3 years, with very few exceptions (eg genuine cripples and spazzers)…
It’s probably only 25-30% because the benefits system subsidises people to be useless.
Jim’s 10-15% seems about right as the rump who would still be incapable even if we sorted out the incentives.
Citizen Basic Income – you have to be a citizen. *Universal* Basic Income, which it has morphed into – no, anybody can get it. Just like they’re proposing for voting.
These folks are already covered by the existing benefit system, so to a large extent the variations are already known. What we have is:
The Benefit Cap (London vs. Outside London)
Housing Support (Local Housing Allowance)
Council Tax Support
Discretionary Housing Payments (DHPs)
Local Welfare Provision & Household Support Fund
Social Care Funding
The only problem one is that one containing the word “discretionally”.
To this I would also make state pensions UBI and give an uplift based on number of years of contributions.
Income tax personal allowance would be very small perhaps £2k but on top what the person gets in benefit. You earn anything it wont reduce your benefit and you will get a bit tax free after which you pay tax.
Eligibility should be what it currently is for benefits but with the qualifying monetary numbers not used.
It’s work in progress. The aim is that you can’t be better off on benefits that someone in the same situation who also works.
“It’s work in progress. The aim is that you can’t be better off on benefits that someone in the same situation who also works.”
It’s actually a lot fucking more than that. People who work should be considerably better off. Better off to the level that they’ll get out of bed, pay for a bus, and miss Homes Under the Hammer.
If people make 10p/hour more than the dole, they aren’t going to bother.
What I was trying to say is that everyone gets what the person on benefits gets so you cant have someone on benefits getting more than someone who works. Anything you earn is on top of the benefits.
Regional variations: Feature not a bug as WB points out
Junkies: state sponsored shooting galleries with free fentanyl (must be consumed on site)
Immigrants: not a fucking penny
Well, the dole is identical regardless of where you live, £92 a week I’ve just checked. If you want it to stretch further, simple, move somewhere cheaper.
If public spending generates enough extra tax revenue to pay for itself (over what period is never specified) then why are we £3tn in debt, and running a budget deficit of 5% of GDP ? Why has all that extra spending above and beyond what we taxed not generated enough extra tax revenue that we are suddenly in surplus?
Now you’re just being silly and using actual data to test a hypothesis. There’s no place for that sort of nonsense in MMT.
Wrong sort of spending.
This is essentially an argument that we should take money off people and give it to some other people just because those people might spend it “better”. I don’t know where to start…
Gamecock thinks the multiplier is INFINITY!
If government spends a pound, the economy will grow infinitely.
Prove me wrong.
Riddle me this: If government spending will grow the economy, why would UBI be needed?
Some infinite series have finite totals, such as 1+0.5+0.25+0.125+0.0625+0.03125 … which adds up to 2
True, but in Murphonomics you change the sign from + to -.
But of course government spending has a multiplier. Empirically it’s round and about 0.5.
A mind game: we are standing by a harbourside 600 years ago. Most people around me know that the earth is flat. I disagree though, my own observations have told me that the earth is likely to be a sphere, just like those objects in the sky; everything is explained for me by this conclusion. And that clever Jewish guy Friedman, who everyone else doesn’t like, agrees with me and talks through the implications. Along comes this gobshite called Murphy, accompanied by a ‘scholar’ called Howard Reed. They tell me “the Earth is spherical don’t you know. No, Friedman doesn’t think that because everyone doesn’t like him, so he can’t believe that”. Now, just because I despise them, does that mean the Earth is flat again?
So with UBI or negative income tax. Why do we concede the principle to the Left and to charletons like Murphy and failures like Reed?
Your analogy doesn’t work because your premise is false. 600 years ago, everyone knew the earth was a sphere. Man had known from the time of Ptolemy. The idea that people thought the earth was flat comes from Washington Irving’s 1828 fictional account of Christopher Columbus.
I keep telling people that, old cock. They still love to repeat it.
Washington Irving’s motive was apparently a desire to damage the reputation of the Roman Catholic Church: an ignoble way to pursue a noble cause and probably redundant anyway.
The rest of the story:
Columbus was an idiot. What set him apart, and was the basis for his mission, was that he thought the earth was much smaller than what other people thought. Man had a fairly good idea of the diameter and circumference. Columbus thought it was only a third of the actual size. Hence, sailing west should find Asia quite easily. He was incredibly lucky to bump into land in the Caribbean, else he likely would have never heard from again. Columbus was wrong but got lucky. And found the New World.
Whats the probability of Columbus not bumping into land when sailing west.
Id have thought that on reaching the Caribbean it would have taken Herculean efforts not to bump into land at some point.
The probability was 100% . . . if he went far enough. Problem was his goal was another 10,000 miles west. Which they would not have survived.
The premise isn’t fake; the analogy isn’t go odd. And even then, most people on the quayside would have thought the earth was flat.
Heather, the question most definitely stems: is UBI bad because Murphy and Reed have latched on? If Uncle Milt liked the idea, maybe it’s a good idea.t
UBI is a bad idea because its one of those concepts that its impossible actually ever implement, regardless of what stage a country is at in its economic development.
Poor countries can’t have a UBI, because they can’t afford to. If they get rich enough to afford some welfare, they are going to target it at those most in need, which makes perfect sense. Pensions is the usual starting point, because everyone gets old (or considers they will be old one day, even if it turns out they don’t make it) so the concept is has virtually 100% backing from the public. From there you move on to things like unemployment benefits, payments for children, for the disabled, and so on and so forth. At all stages of this process lack of funds means the payments get means tested. And you end up where we are today.
And reach the second problem – if you have a means tested welfare system then by definition the payments that those who do qualify get will be more than they’d get if you took the welfare budget and split it between everyone. So moving from a means tested system to a UBI means either everyone gets what a welfare recipient gets today (incredibly expensive and almost certainly not affordable) or todays welfare recipient gets a significant cut in income (very unpopular).
I can’t see a way around this problem. UBI would be great if you could just magically go there from a standing start. One day you’re a poor country that can’t afford welfare, the next you’re mega wealthy and can give everyone a UBI. I guess the only countries that can achieve this are ones like the Arab oil states – one day they were a few camel herders, the next they had dollars coming out of their ears, Jed Clampett style. But not many countries are in that situation.
and you need to be mega-weathy enough to pay for all the ‘slaves’ to do the work that the recipients of that UBI are no longer inclined to do.
That’s the point. UBI is simply giving the unproductive the ability to consume. It doesn’t magic more goods & services into existence: probably the opposite. So it’s inflationary, which means very quickly whatever it’s set at numerically won’t be enough, and increasing it will only generate even more inflation.
Can’t understand why Milton thought it a good idea.
Most people on the quayside would have realised the earth was round due to experience seeing ships disappear over the horizon AND COMING BACK. When your livelyhood is the sea, you know what shape it is.
Or up the hills. The curvature of the surface is visible.
There are arguments in favour of UBI but the flat rate means that a single man or woman could live comfortably without working on a UBI that would leave a single parent with four children desperately poor [alternatively a UBI that included children would give the single parent with four children a far higher standard of living than a single working man paying rent]
There is no simple answer to “What do we do abour drug addicts?”
Rodrigo Duterte has entered the chat.
Its not so much the drug addicts per se. If you’re addicted to smack you probably aren’t long for this world anyway. Its going to catch up with you eventually. Heroin addiction is largely a self solving problem.
The real issue is the people one step above the addicts. The habitual alcohol and softer drug users who have so fried their minds and bodies that they are incapable of a) work and b) managing their lives in any other way that living from dole cheque to dole cheque. These people are incapable of getting up at 8am every day and getting to work somewhere at 9am, and then doing a days work, while not punching someone, or stealing something or generally just being useless. They could no more do that than I could fly an F-15 fighter jet. Its just not going to happen. And there’s lots of them.
The question is what do you do with them?
Under the old-fashioned parish charity model, that also is a self-solving problem.
By the same token the ‘lots of them’ you refer to is primarily caused by the Big State model we currently have because it is across the board an active encouragement to bad choices and poor behaviour.
Well, for starters, you stop subsiding their creation.
Once you have a situation where you get housed and fed, girls are going to be a lot less picky about who fucks them in terms of whether they’re hard working and responsible. Their parents might be less concerned about them going down to the local park at night. Because you know, it doesn’t mean packing more people into their small house, and being woken up by a crying baby.
The reason Japan has 97.6% of babies born within marriage and we are more like 53% is not “cultural”. It’s economic, and culture follows from that. Benefits are real desperation in Japan. You’re expected to go to your family first. It’s also why vending machines can be put outside. Because there’s a Dad in boys lives. And crime and single parenthood are strongly connected.
Do the thing of propping up chavs for 3 generations and it’s like the panda problem. We wank off pandas and artificially inseminate other pandas and what do we get? More abominations that sit around eating bamboo and not fucking each other. If chavs breed, you aren’t going to get someone that solves the travelling salesman problem.
Thats all very well, and I don’t disagree in principle, the question is how does one get from where we are to where we want to be, and(crucially) not end up back where we are by well meaning idiots constantly inventing new special cases?
Its no good demanding ‘We need this!’ if you have no idea how to get there, nor protect it if you ever arrive.
You vote for people who will shrink the state to its useful functions. People who don’t care about what dinner parties they won’t get invited to, or whether they don’t get to be pals with the Archbishop or King Chuck. And as you cut the waste you announce tax rebates to the people. “We’re going to stop subsidising railways and you’re all going to each get a £200 tax bonus because we’re not giving money to the cunts at the RMT”. People need to clearly see the benefits. Lots of voters are going to be pissed that you cut their wasteful little railway, but you give the rest some of the savings, they’ll be more likely to vote for you.
Fixing the state isn’t that hard. It’s about thinking seriously, planning, deciding what it should look like in advance, and then passing laws and changing spending to bring that about. You start with the stuff that’s easy wins and as you demolish the strongholds of Guardian readers, as you demonstrate your ability to the public you go after the stuff they might be less sure about, like health and crime.
We’ve forgotten that it isn’t that hard to change the country. We used to in the past, it’s just that the Tories were such utter wankers who lied about “oh, it’s the civil service”. Anyone in the civil service gets in the way, you fire them and give someone their job that will do what the government wants.
I don’t go for that “deciding what the state should look like” bit. I go for “deciding what the state should not look like.” But there’s something of both in a good governor. Cut away everything that does not look like a lion.
“The question is what do you do with them?”
That’s where the free heroin comes into play.
Doesn’t have to work like that. Give the mum a higher basic income , orset the target net zero tax at a higher figure.
While we’re at it, hooray for the one good thing the Labour gov’t has done; abolish the two child cap.
Then you are not having a flat rate.
FYI the two child cap only applied to children conceived after the two child benefit cap legislation was introduced and not to any children already born. The victims of the cap were children of parents who choswe to have more children after the cap was introduced.
If I want to pay for someone’s child, I’d like a bit of the horizontal fun that normally comes with it.
Why should I pay for the bastard that comes from some other bloke wetting his whistle and fucking off?
And here’s where the charity model works. We all want to help good people down on their luck. I will gladly spend time fixing up a laptop for a poor kid who is going to use it for school. Poor kids have never paid for Harvard. They don’t pay to go to Guide Camp. You tell your mate who is unemployed to buy you dinner when he’s back on his feet.
Looks they’ve invented another perpetual motion machine and this time it really, really will work.
This used to be discussed as a Citizen’s Basic Income, but for years now it’s universally touted as a Universal Basic Income. How the fuck will we afford to pay money to the 9 billion people who will flock here for free money?
And why just a ‘basic’ income. Why not a nice, living wage income?
Do they hate poor people?
A basic income to ensure that no-one is left destitute due to lack of income and can afford to rent a room and buy food. Not a “living wage” income because the proposers know that is unaffordable as a large minority would stop work and subsist in moderate comfort on the UBI so the tax income with which to fund UBI would slump.
The “living wage” today is more than twice (even after adjusting for inflation) what I was earning as a computer programmer in 1964 – and I thought that was good pay.
One of my big things is “and in a cheap place”. 25% of householders in London receive some form of housing benefit. Which is just bonkers. Why subsidise people to live where it’s really expensive? People need a roof over their heads and can’t pay for it? Put them in Merthyr. I don’t really approve of supporting the feckless and useless, but if we must, they can go watch Homes Under the Hammer in mid-Wales.
You are a mean one Mr john77.
because the proposers know that is unaffordable
Uhhh . . . UBI isn’t affordable, either. They propose as big a giveaway as they think they can get away with.
You lose a little bit on every transaction but make up for it in volume?
Gamecock considers charity to NOT be a function of government. They should stay the hell out of it, as voiced by Rep David Crockett nearly 200 years ago.
It should be constitutional. Something to the effect that “The government shall make no expenditures without due consideration, i.e., sufficient consideration, which is the exchange of something of value between parties to form a legally binding agreement.”
Government should spend nothing without getting approximate value in return.
E.g., renewable subsidies are OBSCENE.
Welfare is obscene.
Helping invaders is beyond obscene, it is a crime against the public. It is their damn job to keep them from being there in the first place.