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Universal Basic Income is the idea that everyone receives some basic income so that poverty and inequality can be prevented, especially in cases of market failures and automation.

Although I like this idea, would it not be better to satisfy everyone's basic needs as opposed to offering them an income? What I mean is, instead of giving everyone xxxx units of currency every month, why not assure everyone access to basic needs such as food, housing, healthcare, education, and social life-enhancing activities, by sponsoring those consumptions?

I mean, many countries already do that for healthcare and education, and it seems equally achievable for food (e.g. a limited free quota of food from designated general stores in your area for every person per month) and housing (e.g. building a plethora of large housing complexes that consist of very small rooms that people who can't afford a place of their own can sign up for) and activities (e.g. sponsoring get-together activities such as sports, movie-watching, etc).

I find this idea better for various reasons:

  1. It will directly target the problem. The problem is poverty. We want to ensure a minimum standard of living. Why not offer people those services and needs that ensure that standard of living, rather than just giving them a sum of money and hope they spend it wisely? Otherwise, we risk people misspending the money. For example, think of people addicted to drugs, alcohol, gambling, or simply people who aren't financially apt and spend beyond their budgets.
  2. It will be cheaper. This is obvious: by focusing on specific needs, you can streamline the delivery of those needs, and thereby achieve a cheaper and more efficient allocation of those resources.

  3. It doesn't distort incentives. If only basic needs are covered for, if a person in the society wants to do something that goes beyond those needs (like eat at a fancy restaurant or buy a diamond ring), then they still have to work for it.

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    Comments deleted. Comments should not be used to answer the question or to debate the subject matter of the question. They should be used to improve the question or provide meta-information to the question itself. For more information on what comments should and should not be used for, please read the help article on the commenting. – Philipp Mar 14 at 23:08
  • I suggest whoever answer the universal basic XYZ, should watch youtube video "David Harvey : on UBI & Silicon valley." , before spilling out the general perception answer. – mootmoot Mar 15 at 12:24
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    In a second though, perhaps OP should check out Cuba experience. Even though people will argue Cuba is a "failure economy", however, the result is caused by USA embargo on Cuba trade (i.e. Helms–Burton Act). In addition, unlike Venezuela, Cuba human development index is somewhat astonish. – mootmoot Mar 15 at 15:35
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    Food stamps violate human rights, ask your local human rights activist. No, I am not joking, sadly. That's what they really say. Besides, if you only get food stamps, how do you buy booze and cigarettes! – Damon Mar 15 at 18:51
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    @Owen I will argue that private health insurance should not exists in the first place. It is common sense that private health insurance will create a for-profit tug-of-war with the healthcare system, more inefficiency created in the process. Worst, private insurance will buy and even lobby to harvest public healthcare statistic data to leverage their profit to not accept client that they deem "costly" – mootmoot Mar 18 at 14:03

12 Answers 12

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Different people have different needs. Determining those needs is difficult, expensive, and subjective. Universal basic income has been proposed as a simple solution that should work well enough for most people with minimal bureaucracy. People with special needs would still need other forms of support.

Some reasons why universal basic income is supposed to be a good idea:

  1. It does not distort the incentives. Unemployment benefits are often incentives against taking a low-income job. If you take a job, you lose the benefits, and your effective tax rate can easily be as high as 80% or even 90%. With universal basic income, a low-income job improves your standard of living much more.
  2. It simplifies the system. Instead of different benefits with different requirements, standard deductions, multiple tax brackets, and other ways of supporting low-to-middle income people, there would be just the universal basic income and a single tax rate. (In some proposals, there would be another tax bracket for high incomes.)
  3. Guaranteed income gives people control. When people feel they are in control of their lives, they tend to be happier and more productive.

Of course, we don't really know whether universal basic income works as advertised, because there have not been any large-scale experiments with it.

Edited to make the answer more explicit: There is no widespread agreement on what are the needs welfare is supposed to address, or who is entitled to which forms of support. When a new party or coalition gains power, it often changes the welfare system in various ways. Eventually the system becomes a complex patchwork of conflicting aims and requirements that is difficult to understand and expensive to operate. I listed a few points on how various UBI proposals try to fix the observed deficiencies in needs-based welfare systems. In particular, the third point explains why UBI proponents think giving people money is better than addressing their needs directly.

  • Comments are not for extended discussion; this conversation about various experiments with basic income and how useful their results are has been moved to chat. – Philipp Mar 15 at 21:31
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    'Need' and 'Want' are different. Do you need clean water-yes, do you need soda-no. Do some people need gluten free-yes, but do we have to provide everything-no. Having a basis of water, rice, beans, vegetables and chicken or beef will suffice 'Needs' of the majority of people, regardless of whether it is what they 'Want' or not. 'Basic income' would need to vary as prices vary from place to place. Does someone need to take a bus or taxi to a cheaper store instead of going somewhere walking distance? Properly determining that would be also be "difficult, expensive and subjective". – dave k Mar 16 at 2:30
  • While this gives advantages of UBI versus things like "support for who is in need", this doesn't really address the comparison to the "provide food, housing, ... to everyone" proposal in the question. – Paŭlo Ebermann Mar 16 at 21:28
  • Monetary distribution will definitely trigger capitalism exploitation, eventually it will cause price hikes and money will AGAIN falling into the hand of those(private corps) who monopolised the goods and services. – mootmoot Apr 1 at 9:46
  • @mootmoot Wat’s the path between “everyone has at least some money” and “let’s raise prices”? I’m not saying you’re wrong, but I don’t see it and you’re going to need to spell it out for me. – Bobson Apr 1 at 11:14
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It will be cheaper.

No. It will be more expensive. It will be far, far more expensive. Yes, you may save a few pennies if you hand out food instead of cash.

The problem is, you need people to assess what every person needs. And you have to keep doing that. People need shoes, but you don't need to give them new shoes every week. So you need operational people, and lots of them. You need people to determine what valid needs are. Which you need to reassess every year because needs change over time. So you also need policy makers. And you'll have to handle complaints. Because you will end up giving people a bag of rice when they really need shoes. Or you keep giving a family milk while their kids are lactose intolerant. Or you said "not going to fix that" to a family whose roof is leaking. So you need a complaints and legal department to handle that.

And those costs far outweight the pennies you save.

Otherwise, we risk people misspending the money. It doesn't distort incentives.

So, the alternative is the government decides what you eat, how you are dressed and how often you can see a movie? How big is the problem of poor people having dinners in fancy restaurants?

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    If they don't have money to misspend, they can still sell the rice/shoes and go to the betting shop/drug dealer. This will only work if the food is eaten at point-of-issue. Shoes - you have to get teachers to check if that child is wearing its new shoes... this kind of micro-control gets out of control very quickly. – RedSonja Mar 14 at 11:23
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    +1. That's basically all money is: a representation of purchasing power. So instead of all of that bureaucracy, just average out different groups'/regions' needs and you're golden. – bvoyelr Mar 14 at 17:30
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    Not only will you have to figure out what people need, different people need different things. Do you want a childless couple to get 3 boxes of diapers every week ? Do you want lactose intolerant people to get 3 gallons of milk every week ? Do you give business suits to people working in a coal mine ? hotdogs to vegans ? – xyious Mar 14 at 19:49
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    @JeffUK - Ok, assume that all basic food is free. What about clothes? What about housing? What about transportation? Should they all be free, too? And how do you deal with the person who walks into a store, takes 40 loaves of bread, and uses it to feed the birds. All food is free - should they be punished for wasting it? What if it was 400 loaves? – Bobson Mar 15 at 3:29
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    This is considered one of the failing points for Soviet Union. Lack of market economy meant huge bureaucracy trying to control all the production. – Gnudiff Mar 15 at 4:56
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We’re already trying that, and it’s not working out so great

The original point of proposing Universal Basic Income, at least as proposed in the United States by people like Charles Murray, was to replace the majority of the welfare programs that already exist that are organized around providing for specific needs, because those programs aren’t very good at helping poor people in practice.

In the United States, we sponsor food consumption through food stamps. We sponsor consumption of housing through the Section 8 program. Healthcare for poor people is sponsored through Medicaid. Education consumption is sponsored through federal student loan programs and all sorts of other aid. We’re following the broad approach you think would be better and have been for at least 50 years or more.

Why isn’t this working out so great? Let’s look at your assumptions.

It will directly target the problem... people might misspend the money...

It directly targets problems that politicians and government bureaucrats can clearly identify. Those problems may not be the problems that poor people actually have. The solutions that politicians come up with are often not actually the best ones, because they don’t know what problems poor people have. Poor people tend not to be very civicly engaged. So they end up designing things around the interests of middle-class or richer people.

Also, poor people still find ways to misspend the money. One of the flaws of the food stamp program is that people do illegally exchange the stamps to get money that they use to purchase things that aren’t food.

It will be cheaper... because you can focus on providing specific certain things...

No, for two reasons.

The first reason is that, having a complex welfare system requires employing lot of government workers, e.g. college educated people who have potentially six figure salaries. Printing checks and giving them to poor people with no strings attached is a lot cheaper because you don’t need to employ lots of people to administer that.

The second reason, is that the government is really bad at providing most goods and services efficiently compared to the market. That’s because government can use its special coercive powers to ignore things that provide useful information about scarcity, like prices. It’s also because the government doesn’t suffer from losses if it spends money poorly the way businesses and individuals do; it can use taxation to ignore that. That’s why most welfare in the United States involves giving some sort of special money to someone else for a specific purpose already; it’s easier to give WalMart a couple of extra bucks than it would be to build and run “designated general stores in your area”.

It doesn’t distort incentives

The mistake you make here is that you are focused solely on the person receiving the help. Even then, you are still incorrect. If someone stands to gain income but lose benefits, they can be inclined to turn down the income of the benefit of more income is smaller than the loss of benefits. This is called a “poverty trap”, and it’s just as much a problem for your needs-based approach as it is for the UBI people.

I could write endlessly on this topic, so let’s just focus on one example: housing subsidies. Housing subsidies encourage people to stay exactly where they are instead of moving to somewhere else where better economic opportunities may be available. Housing subsidies also cause inefficiencies in the housing market; the poor people can get in cheaper than market price, but a whole bunch of people coming in cheaply means more people come in than otherwise would, which leads to shortages in housing, which means prices go up in the rest of the market that isn’t “affordable”. When you do this over a great many people, and all of the affordable housing is in one place, you create neighborhoods where nobody can afford to leave, an insular island of poor people collecting benefits because it’s too expensive to take a job in the next town over. Welcome to the Inner City, brought to you by the Housing Act of 1937.

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    There's no poverty trap with UBI because it's universal. You don't end up losing UBI if you get a job, or a higher paying job, or inherit a billion dollars. – David Rice Mar 14 at 16:39
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    @David Rice Not all proposed UBI schemes have that feature. Some proposals suggest that the money be distributed in the form of a negative income tax. – Joe Mar 14 at 16:54
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    yes, all universal basic income schemes are, by definition, universal. That's kind of a key point of them. There are other non-universal basic income schemes that aren't universal, of course. – David Rice Mar 14 at 17:04
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    Joe - getting a check isn't a necessary part of UBI. If the government gives you a 10k tax credit and you owe 20k in taxes, you still got the full 10k benefit, and that doesn't change if your income is too low to owe any taxes, or high enough to owe millions. – David Rice Mar 14 at 17:08
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    "The solutions that politicians come up with are often not actually the best ones, because they don’t know what problems poor people have." Or perhaps because the solutions politicians come up with are the ones suggested to them by their campaign donors who, by pure coincidence, just so happen to provide those solutions. Or because they sound nice and simple when the politician proposes them while campaigning to people who don't understand economics, even though they don't actually work well in practice (which the politician may know, but counts on their electorate not to know.) – reirab Mar 14 at 19:09
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Once upon a time, Germany did that in the form of Sozialhilfe, welfare payments for the needy. The Sozialhilfe system was supposed to make sure that all people had the minimum required to live in society, which included not just food, clothing, and shelter but also things like a radio, a bicycle, etc. If they had little or nothing, for instance one of the spouses after a divorce, the welfare office would provide.

This was done away with as part of the Hartz reforms. These reforms are highly controversial because of what they did to unemployment benefits/insurance, but few people recall how the Sozialhilfe was organized before the reform.

  • It prescribed how welfare recipients should set their priorities.
  • It was both inefficient and degrading for a recipient to go to the office and say "I don't have a winter coat, gimme," and for the case officer to ask "well, what clothing do you have?"
  • It did not force/teach them to work with a household budget, save up for expenditures, etc.
  • On the other hand, it supposedly made sure that everyone had the minimum necessities, no matter what.
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    But Sozialhilfe also included monetary payment and it wasn't universal because it could be suspended when refusing job placements just like ALG II. – nwellnhof Mar 14 at 10:58
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    @nwellnhof, I thought the question was mainly about the difference between specific needs vs. lump sums, and Sozialhilfe had much of the former in the rules. – o.m. Mar 14 at 17:38
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    It's still the government deciding what those minimum necessities. A radio, for instance: I've gotten along just fine for the last couple of decades without one. (Since the local NPR station switched away from mainly classical music.) – jamesqf Mar 14 at 18:15
  • Sozialhilfe had an element of necessities, but the bulk was monetary as well. – Tom Mar 14 at 23:32
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Universal Basic Income is the idea that everyone receives some basic income so that poverty and inequality can be prevented, especially in cases of market failures and automation.

No. It is intended to prevent extreme poverty, as in "starving to death", but it's not intended to prevent "mild" poverty in the sense of "choices significantly reduced due to lack of funds", and it certainly is not intended to prevent inequality. Inequality would be reduced somewhat, since it would create a floor for income, but that reduces inequality only on the lower end of the range. It would still leave the separation between lower middle class, upper middle class, and upper class. The idea is that everyone would get enough for bare necessities, but if they want more, they have to work for it.

Although I like this idea, would it not be better to satisfy everyone's basic needs as opposed to offering them an income?

That is exactly the idea that UBI is intended to replace. Currently there are two major paradigms:

Capitalism without an net: The government takes a hands off approach. Everyone is free to live as they please. Proponents argue that this promotes efficiency, as people know what is best for them better than the government does.

Safety net administered by the government: The government engages in wealth distribution. It takes money from the rich, and spends it on programs for the poor. But instead of letting the poor decide how the money is spent, government bureaucrats decide what's best for them.

The first is criticized as heartless: those who aren't able to find financially remunerative employment are left out in the cold. The second is criticized as patronizing and inefficient: the government decides for the poor what they need, and if the poor have something they would enjoy spending the money on more, too bad. It means that allocation of resources will be based not on what people in general want, but on what government elites decide. It also means that resources will be diverted towards working around the restrictions: black market for food stamps, avoiding employment if it puts one above the threshold for a benefit, etc.

UBI is proposed as a third way that provides a safety net while letting recipients decide how the resources should be spent. Some people will be willing to live in cramped dorm rooms in exchange for a college education, while others would prefer to spend their money on a large house. With UBI, individuals will decide which gives them more utility, rather than the government making a one-size-fits all decision. It's "capitalist welfare": people get financial support, but the market decides how that support is allocated.

I mean, many countries already do that for healthcare and education, and it seems equally achievable for food (e.g. a limited free quota of food from designated general stores in your area for every person per month)

Just how specific will it be? Will it be a specific amount of potatoes, a specific amount of meat, etc.? Will it be even more specific: such-and-such amount of Russet potatoes, such-and-such of red potatoes, such-and-such of organic chicken thighs, etc.? Or will people be able to decide that they want chicken breasts rather than thighs? Will they be able to decide that they're willing to get non-organic chicken if they get more of it? Will they be able to decide that they want roast beef instead? How will you decide how much chicken rations someone has to give up to get a roast beef ration? Will you establish an exchange ratio? Maybe have some unit of measure, and give each ration a value in terms of that unit? There's a word for that: money. Either you're just handing out a specific basket (literal or figurative) of food, and everyone gets the exact same food (and wastes a lot of time establishing a black market trading each for the food that they prefer) or you have a complicated system of options that does what money does, except worse, or you just hand people money and let them buy whatever they want.

and housing

This one is even worse, because you can't give everyone exactly the same housing. Some housing is going to be valued more than others, and how do you decide who gets what?

It will directly target the problem. The problem is poverty.

Since poverty is lack of money, isn't directly targeting it giving people money?

We want to ensure a minimum standard of living.

If you decide the minimum standard of living is X, and you give everyone X, then everyone will have exactly X worth of value. If you give people enough money to buy X, then people can get more than X worth of value: if there's something that they value more than X, but costs the same, then they can buy that instead. So it's a choice between exactly X (your plan) or at least X (UBI).

Why not offer people those services and needs that ensure that standard of living, rather than just giving them a sum of money and hope they spend it wisely?

Why is the government a better judge of what is "wise" than the actual people that it's for?

Otherwise, we risk people misspending the money.

That raises the question of just what it means to "misspend" money. Is it spending it on something they will get less utility out of? If so, how do we decide how much utility someone is getting from something? Should the government be in the position of deciding for people how much value they are getting out of things?

It will be cheaper. This is obvious: by focusing on specific needs, you can streamline the delivery of those needs, and thereby achieve a cheaper and more efficient allocation of those ressources.

No, it's not "obvious". First of all, what does it even mean to be "cheaper"? Do you mean "I have a particular vision of exactly what everyone should have, and the amount of money it would take to give this to everyone is less than the amount of money we would have to give to everyone before everyone buys this"? Then yeah, it would be cheaper. But if you mean "Given some amount of UBI, we could spend less money and have people get the same amount of value by giving people specific stuff", then that is less obviously true, and again relies on there being an objective measure of "value". If you give everyone the same stuff, regardless of their preferences, you're going to be diverting resources to things people don't want.

It doesn't distort incentives. If only basic needs are covered for, if a person in the society wants to do something that goes beyond those needs (like eat at a fancy restaurant or buy a diamond ring), then they still have to work for it.

That's how UBI works. Other than really utopian versions, UBI proponents aren't proposing we give everyone enough money to eat at a fancy restaurant every night.

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    One nitpick: poverty is not a lack of money. That may be the cause but I don't think it's a sensible definition. – immibis Mar 14 at 20:57
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    >you're going to be diverting resources to things people don't want. -- that's exactly what went on in the USSR. Shops were full of items (eg shoes) nobody wanted, because government central planning thought in terms of: "we need X shoes per Y people per year". – Gnudiff Mar 15 at 7:34
  • "Will it be even more specific: such-and-such amount of Russet potatoes, such-and-such of..." This reminds me of WIC and the difference between that and SNAP. With SNAP it's basically "here's some money, buy food with it", while WIC (at least in my state) is very overly specific. "3 bottles of juice: apple or white grape, 48 oz bottles. Yogurt: Eight 4 oz cups, plain" For one, they don't even sell 4 oz cups in any store in town, and 64 oz bottles of juice are far more common. Most people literally bring the list with pictures shopping with them so they don't get the wrong thing by mistake. – Geobits Mar 15 at 13:12
  • I am puzzling how It is intended to prevent extreme poverty is possible. If the business see the opportunities to INCREASE the price when they see there are extra money (i.e. those poor people) entering the market? It is similar to "increase lowest wages" without other supplementary policies to prevent opportunist profiteering. – mootmoot Mar 15 at 15:16
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    "When everything becomes automated, use the excess production to fund UBI" - This is the root of the UBI fallacy to me. You have to seize the excess production from multinational companies, forcefully, to procure it for the UBI fund. And the multinationals are getting better and better every year at shielding their assets from any kind of governmental seizure. Amazon got money BACK from the government on their federal taxes last year. You have to figure out how to tax the companies before UBI is ever possible, and we're doing a worse and worse job of that every year. – Graham Mar 15 at 17:06
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There are many reasons why universal basic income is much better than what you propose which is essentially the idea of communism (I mean that without judgement).

By providing the means of exchange, i.e. money, you allow market forces to do what they do best, prioritize and allocate. People can go and buy what they think is worth their money at the prize that they think it is worth.

The other reason is organisational. Market economics turns out to be better at distributing ressources than central planning is. Allows small and large businesses to worry about which things to put on sale where and react to demand and changes in demand works surprisingly well in ensuring that things are available when needed where needed. It's not called "the invisible hand" for no reason.

Another effect is that regional differences are easier to compensate for. The income level can be adjusted for cheaper or more expensive regions (supporting consistency) or not (incentives for people to move to cheaper regions). To do that with one variable (money) is already tricky and highly political. Now try to do it with a hundred different goods.

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    IMHO, although sound counter-intuitive, UBI is ironically a right-wing / capitalism idea. In fact, it is pretty common sense : payment of money / income is a capitalism idea. So your association with communism is flaw, perhaps perception from conservative? – mootmoot Mar 15 at 11:16
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    @mootmoot I took that to mean that the "basic needs" scheme in the OP is basically communism, not UBI. – Geobits Mar 15 at 13:04
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    @Geobits that was my interpretation as well - UBI is the market capitalist approach while the "providing basic necessities" is the communist central planning approach. – pluckedkiwi Mar 15 at 13:17
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    They're both wrong because the public provision of some goods and services is not a sufficient condition for "communism" – Joe Mar 15 at 14:16
  • No, but it is an essential idea of communism. And yes, I was referring to the "basic needs" scheme. UBI doesn't guarantee your needs are met - you still need to manage your money properly. – Tom Mar 15 at 19:12
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There are a few reasons why Universal Basic Income (UBI) is being talked about more and more and why simply giving "basic needs" is not viable. Firstly everyone's needs are somewhat different, this is why money was created - so that one need not have every set of skills necessary to barter for every other object and service they need.

Just for a need like food, a huge problem crops up. It would then be on the government to make sure that vegans get vegan food, kosher, halal, etc. When individuals could simply buy what they will.

Additionally, the fact that many in the United States are very much in debt, a dividend in the form of UBI would help give funds to those who maybe want to start a business, or form a co-op with others. You don't have to be in poverty to receive the dividend, and as such can use it for well, whatever you want.

Also the purpose is to help getting people to spend money on luxuries as well. The thinking, and evidence point to, that this money will make it's way back into the economy through people who otherwise wouldn't be spending money on luxuries.

  • It sounds like you don't need water, nutrition foods , electricity/heating, cleaning and place to stay. – mootmoot Mar 15 at 15:12
  • @mootmoot - Your comment kind of highlights the point. You initially assumed that electricity was part of needs... And yet there are people living in North America who CHOOSE to do without electricity. A mathematician I know lives in a single room hut that he heats with oil lamps... Centralized definitions of needs leads to crushing the outliers under ignorance of their needs, or costing too far in excess to supervise everything. – TheLuckless Mar 15 at 20:12
  • @TheLuckless Your oil example simply show LACK OF CHOICES under UBI than a need base system. First, the oil will be more expensive to deliver to the remote area. Second, the oil will pollute the air, increase the risk of burning down the house. – mootmoot Mar 18 at 10:01
  • @mootmoot Not following your logic here at all. i.e. What does one thing have to do with another? UBI - in the form of a monetary dividend - gives the recipient the choice. Governments are good at writing checks, not determining what the populous needs. I'm kicking myself for clarifying this but... a remote home using oil for heat isn't contributing any significant amount to pollution. Think power plants. – SentientFlesh Mar 22 at 17:50
  • @SentientFlesh The logic is pretty clear unless you want to evade the cost issue. 1. Distribution/transportation of oil, it is not free. 2. Efficient heater and low pollution heater, it is not free. – mootmoot Apr 1 at 7:51
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The primary benefit of UBI is that the exchange is free of shame and control.

One of the problems of needs-based social security is that it takes the choice away from the people receiving the help. This is bad; somebody else is telling you what you need and what you should be using.

The needs based system is thus some form of oppression. Sure, many might find it bearable. Still no matter how well planned, there will always be some simple corner cases that slip through the cracks. In practice it's worse than that people in charge usually find ways to pass morality issues on those affected.

Also needs-based social security is what we have now and it's not exactly working out.

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    This presupposes that there should be no shame in not being productive even when one has the ability to do so, while still forcing others to work to provide for you. This is not universally seen as a positive trait to be encouraged. The lack of control can be argued as a benefit on efficiency grounds, but the lack of shame cannot as it leads into issues of moral hazard. – pluckedkiwi Mar 14 at 18:48
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    @xyious There are not many people in the world who think $152 in SNAP benefits is a UBI, but apparently you do exist. And yes, there are plenty of people who would just choose not to work. I have personally met plenty of them. – pluckedkiwi Mar 14 at 20:01
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    @joojaa People demanding UBI or other such programs are the ones demanding that others work for their benefit. Expecting people to provide for themselves if they are able is not oppression - it is exactly the opposite. If you choose not to work, that is on you - being too lazy to work does not grant you the right to demand others work to provide for you. – pluckedkiwi Mar 14 at 20:29
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    @pluckedkiwi You imply that only paid work is beneficial to society. Are raising kids, community projects, helping out in a soup kitchen and making open source software all worthless to you? Because the soup kitchens in my area couldn't afford paying everyone. And I have neither the time nor the resources to find and pay every person who contributed to the internet resources that make my highly paid job so much easier. I'd rather give all the underpaid nurses and less-than-famous youtubers a monthly check directly instead of Google and local administration taking their cut. – Ruther Rendommeleigh Mar 15 at 9:39
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    if everyone receives UBI, you don't have to actively accept it. (so there is no shame in admitting you actually need it. When you utilize it, it is just money like any other, you are not announcing to the shopkeeper that you are barely surviving. When you use whatever goods you purchased with it, you are not announcing to everyone that sees you that you are barely surviving... – Mr.Mindor Mar 15 at 21:57
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This is attempted in the case of college attendance in the USA. The amount of effort needed to gather and evaluate evidence of need is considerable. See https://studentaid.ed.gov/sa/fafsa to get a general idea. I'm not saying it can't be done. I am saying that for smaller purchases, the Gov't is never going to be able to do it. Private charities that don't have constraints such as a need to accept anyone in the country might be able to.

Additionally, this form of support still suffers from the problem of perverse incentives. People now have the incentive to spend effort documenting their need, rather than doing useful work and getting paid for it.

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    Re: "People now have the incentive to spend effort documenting their need": A good point. I know a disabled person who would prefer to walk places occasionally (which would be good for his health), but who avoids doing so for fear that his city would find out and reclassify him as not-quite-disabled-enough for his handicapped parking permit and assigned handicapped parking space. (I'm not sure whether this fear is fully justified -- his difficulty walking is very apparent -- but regardless, it's there, and has negative effects.) – ruakh Mar 14 at 15:12
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Another answer citing the German experience:

The federal states differ in how much aid to asylum claimants/refugees is handed out as money and how much is given in kind (food, clothing, etc.). Several states have been trying to increase the in-kind percentage as a means to discourage economic migrants. They found that the distribution of goods is much more expensive than managing cash payments (news report in German).

  • Goods distribution is never a simple economy question to answer. Cash payments sounds simple, but it will affect local goods price. In many part of the world, a rich country nearby always cause inflation to its neighbor country poorer town, due to movement of cash pour into the poorer region. Free market is not as "free" as many imagine. – mootmoot Apr 1 at 8:16
  • @mootmoot, the example given here was Germany. Refugees are distributed among states and municipalities, so each town would have one to two percent refugees. Too few to make goods distribution feasible, too few to distort the market except for the housing market and items like containerized modular buildings. – o.m. Apr 1 at 15:45
  • You just gave a bad example. Because basic needs will show otherwise and reduce the tension. People who anti-asylum always argue that "refugee send money home". – mootmoot Apr 1 at 16:52
  • @mootmoot, that's why many people in Germany wanted to give goods and services only to refugees, until they found out how expensive that can be. – o.m. Apr 1 at 17:03
  • IMHO, solve everything with "cost efficiency" is a tunnel vision economical obsession. Such economist "rationality" doesn't work in typical human mind. On the refugee issue, I think EU bureaucrat should take the golden window to experiment UBS & UBI on the refugee. So call refugee integration is little different than those people left out under neo-liberalism & economy paradigm shift. – mootmoot Apr 2 at 7:19
4

The most obvious difficulty I can see is the immediate separation of any market (food, clothing, housing, etc) into two tiers: basic and non-basic.

Food. How are your daily food needs identified? Let's take calories, and subdivide into, for instance, meat, starch, and vegetable/fruit.

A Basic Citizen (BC) comes into a store looking for meat. She will obviously pick, let's say, filet mignon over 75% hamburger. Or perhaps the skinless, boneless chicken breast over a half chicken.

A Non-Basic Citizen (NBC), one who is doing well economically, follows after and cannot buy top-tier items because the BCs have grabbed "the good stuff".

Why, then, would it make sense for the store to carry filet mignon or boneless/skinless chicken? Unless the store sets up a "Basic" and "Premium" set of designations, they will have to deal with a largely insatiable demand for the higher-quality foods. And it is not true that everybody can have an above-average lifestyle.

Clothing.

Nike releases a new type of running shoe which costs (due to its materials and construction) significantly more than others in the class. How do you prevent the BCs from grabbing the hot items, with the producer getting "basic item" prices?

Shelter.

How is this measured, square feet? How do you prevent an unemployed single mother with 7 kids from getting a penthouse apartment in a nice area? Should you?

While you can argue that BCs should have access to exactly the same goods and services as everybody else, there is no unitary "everybody else". There is a scale of goods quality available, and unless you restrict Basic access to the lower levels, there will be a very large perverse incentive to remaining at a Basic level.

With a guaranteed income, that income can be seamlessly increased by supplementing income via employment. Money is, after all, fungible. Goods are not. If Basic needs can be satisfied by high-quality goods, then it's hard to see why anyone will try to acquire goods other than through the Basic distribution mechanism.

Some, of course, will say that this is a good thing. It will enforce equality of basic needs on the entire society.

It will also discourage producers from producing the goods which are distributed under the Basic designation in any but the lowest quality. This quality, of course, will need to be specified and monitored by the government, and in the process Basic garments will be instantly identifiable as such, and the wearers likewise identifiable.

In the case of housing, there is no incentive for Basic users to maintain their properties, since if they do not and the structure becomes uninhabitable due to neglect, alternative housing must be supplied. In other words, the government becomes the country's slumlord. In northern climates, how do you provide sufficient heat for Basic citizens in winter? If a Basic tenant wants to keep their house at 80 degrees with a window open, thereby using enormous amounts of oil, do you prevent it, and if so, how?

This is, in a way, the needs version of the affordable housing standards issue: just how good does public housing need to be? In this case, why would a builder build a high-quality or luxury dwelling, when he'll have to take Basic prices? If the program is set up so that the government pays market prices for Basic housing, how does the market set that price? After all, everybody gets Basic housing, which means that there is no such thing as a market in the conventional sense. If the Basic price reflects quality and construction costs, how does the government determine those prices except by setting up a large bureaucracy, and how does such a bureaucracy respond to local conditions? The historical record for this sort of thing is not good.

Short-form: since goods, unlike money, are not fungible, a UBN program will produce perverse incentives and discourage production of all but the most "basic" level goods quality. This can be avoided to some degree by restricting UBN access to the lowest level of quality, but this is likely to have very bad social consequences.

  • I was going to post a similar answer to this regarding the impact to the types of goods offered, I think you are missing a scenario... If only Basic level goods are available in UBN, there will still be luxury items, what will disappear from the market is low to mid quality goods. If the UBN quality shoe would cost $20 outside UBN, then $100 shoes will still exist, but a $25 shoe will not. There won't be a market for a product for which you pay $25 for $5 worth of additional value. – Mr.Mindor Mar 15 at 22:17
0

This is a really bad idea. I will try to explain.

Needs are very difficult to define and measure. You can learn to live without most stuff except food and staying warm enough to survive. Similarly you can get used to so many luxuries you start feel like you need those luxuries. A computer 25 years ago was definitely luxury. Today without any computer / digital device and internet connection you would definitely be poor and not in good condition to get back into the economy.

If you disregard luxuries, the only really universal basic needs are food and some place and clothes safe and warm enough to sleep so that people don't starve or freeze to death.

But such a needs focused system... it really doesn't provide means to get back into the economy, which I think we need to demand of any system that is supposed to help those who have fallen out of the economy.

  • This is yet another answer that contradictory with technology usage and how market is used to change people perception on "needs". E.g. propaganda (or fake news) way of changing people perception is no different than "superfood" seller. UN already define a standard need (food, water, shelter). It is up to individual nation whether extend it further, e.g. a tablet & internet can become new basic need that help relay a person needs and gives. – mootmoot Apr 2 at 7:45
  • @mootmoot If in "needs" some way to get improved economical situation is not included then a large portion of those struck by this system won't get out of it. Good luck finding and applying to a job without an internet connected device. 25 or 30 years ago it was maybe possible. – mathreadler Apr 2 at 7:51
  • IMHO, the internet are yet reaching its potential to match the "needs". So called "shared economy" is nothing new(isn't the public transport, water ,etc is a shared economy). It seems today institutional are yet to expand imagination (e.g. community helps, chartered services, etc) – mootmoot Apr 2 at 8:16
  • @mootmoot no you don't get it. I am talking about regular jobs. You can't go to an employer and ask for a job today. They will just say, "check this ad online and make a CV and apply digitally". – mathreadler Apr 2 at 9:43
  • Have you ever think the other way round ? Imagine that a centralise institutional services that host all this job seeking services ? Also including tons of community job, renting of resources, etc? You will be surprise how inefficient is current capitalism resources pool to perform most of the "paid job". – mootmoot Apr 2 at 10:21

protected by Philipp Mar 14 at 23:09

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