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posted by martyb on Thursday January 20, @01:12AM   Printer-friendly
from the of-course-nobody-ever-gets-bored dept.

Study: Basic income would not reduce people's willingness to work:

A basic income would not necessarily mean that people would work less. This is the conclusion of a series of behavioral experiments by cognitive psychologist Fenna Poletiek, social psychologist Erik de Kwaadsteniet and cognitive psychologist Bastiaan Vuyk. They also found indications that people with a basic income are more likely to find a job that suits them better.

The psychologists received a grant from the FNV union to research the behavioral effects of a basic income. They simulated the reward structure of different forms of social security in an experiment. "We got people to do a task on a computer," says De Kwaadsteniet. "In multiple rounds, which represented the months they had to work, they did a boring task in which they had to put points on a bar. The more of these they did, the more money they earned."

The psychologists researched three different conditions: no social security, a conditional benefits system and an unconditional basic income. De Kwaadsteniet: "In the condition without social security, the test participants didn't receive a basic sum. In the benefits condition they received a basic sum, which they lost as soon as they started working. In the basic income condition they received the same basic sum but didn't lose this when they started work."

The basic income did not cause a reduction in the participants' willingness to work and efforts, say the psychologists. Nor did their salary expectations increase. "In the discussion on a basic income, it's sometimes said that people will sit around doing nothing if you give them free money," says Poletiek, who saw no indications of such a behavioral effect.

What would you do if you were to receive a basic income?


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  • (Score: 0) by Anonymous Coward on Monday January 24, @03:08PM (1 child)

    by Anonymous Coward on Monday January 24, @03:08PM (#1215259)

    -- Part 2 --

    "Now you have primary industries caught between punishing taxes and a demotivated workforce, thus a reduction in the functional value of the labour subsidy, meaning that the prices of those primary inputs (say, wheat) rise meteorically compared to the UBI, making for a big inflation driver."

    I agree completely with this.  However, isn't this true today?  Isn't most farming in the US done by Mexican labor?   My point is that jobs that don't provide economic or social value will not end up being filled by desperate people who will just take any wage.  Instead, only highly productive jobs, highly important or those that are socially valued (think teacher) will be filled. Since crops are highly important the wage would have to go up or it would continue to be done by foreigners.

    "...but even with the marginal cost structure between California and Oklahoma there has been a lot of movement."

    I spent way more time on this topic than I intended to because it was really interesting.  There are some major limits to your data and frankly to the data in general.  Without spending serious research time building my own models, I honestly can't say if your view is valid.  But let me point out this happened in the 1990s too and back then they thought it was a good thing:

    "These outflows reached their peak between July 1993 and July 1994, when over 400,000 more Californians left for other states than moved here from those states... On average, newcomers have higher incomes, more education and are less likely to be married than those leaving California. They are also less likely to live in poverty and receive public assistance. Taken together, these characteristics suggest that California benefits from domestic migration by attracting relatively well educated and high-earning populations..."
      - https://www.ppic.org/wp-content/uploads/content/pubs/cacounts/CC_800HJCC.pdf [ppic.org]

    Could this still be the case today?  I simply don't know, I couldn't find good data.  I couldn't find anything on a skill basis, degree basis, wealth/income basis or even age basis.  Yet I do agree there is a net migration outward.  I agree that has been the case for decades.  Interestingly though, the population of California is still increasing (per census 2010-2019 numbers).  I didn't spend any time looking at Oklahoma other than to compare per capita GDP in 2021: 52,913 OK vs 85,460 CA (source: wiki) and taxes.  Per taxfoundation.org state and local taxes per capita in 2021 were: 6,813 CA vs 3,850 OK.  Why would people be running from that level of difference?  Obviously you'd run if you paid 100x average and only needed to move next door to save 100x.  But would you flee your country for a 1.1-2x increase?  I agree some do, but it isn't clear that many do, maybe 3-6k a year and mostly due to burdensome regulations rather than taxes or wealth: https://en.wikipedia.org/wiki/List_of_former_United_States_citizens_who_relinquished_their_nationality [wikipedia.org]  I know Europe is a bit different since the EU has a US state like system for migration but you are leaving your country, including many more dramatic differences like different tax laws.

    "Again with the separation of politics and economics as if political economics didn't exist..."

    Maybe I'm not being clear, but what I'm trying to say is assuming that the politics of the country weren't such that it would never get pasted congress, you would use capital controls.  Does that mean UBI couldn't ever happen?  No, just not today.  

    Capital controls clearly work to some degree otherwise there would never have been a demand to remove them.  They would have just been dead laws like blasphemy still being illegal in some states. There are historic examples like the Asian financial crisis where capital controlled states behaved very differently than those without capital controls, but to be honest this is not my field of expertise. If you have good evidence of when and how they fail, I'm open to learning.

    "In a sense, you seem to think that I'm arguing about how people wouldn't like it, and seeing that as a political position. It's a political-economic position, pointing out that the reaction of a population to policies placed by governments is a serious factor in policy planning."

    I've been purposefully vague about UBI and the style implementation as all I was addressing was inflation with a suggestion that MMT might help imagine a solution to resolve inflation issues. Digging in deep at all the various levels, all the policy choices, that is way more work than I intended to cover.  UBI to replace SS/Medicare/etc or UBI to supplement or UBI to slowly replace or ...  The point is there are many different ideas for UBI and to say x is UBI and y is not is to assert a political preference for one over another.  Even if it is a preference in the sense that you prefer to argue against one version of UBI over another.  My point is, your assumptions seems to be based upon a rather extreme version of UBI.  Something like large UBI + all existing benefits.  Charles Murray for example suggests 10k + 3k in medical savings while eliminating all benefits.  Would that have the same response?  I think not, but maybe you think the political economy response would literally be the same?  Let me be clear, I agree that:

     A. capital controls would have to be implemented in the max version.  For other versions, given the fact that it isn't a tested idea and is politically unpopular, it still likely would need capital controls just to keep the horses from instinctively running out of the barn. 
    or
    B. Capitalists would have to believe their backs were against the wall, ala 2008 crisis and want to be saved and wiling to accept some sort of trade for it.

    Given B didn't even come close to happening, I agree that capital controls would likely be needed today.  But does that mean a B-style scenario is never possible?  I don't think so.  It happened in the 30s and thus SS exists today.  Maybe due to internet and flight, that sort of backs against the wall is less likely to occur since you can just escape with your bitcoin wallet and 12 secret words.  It just doesn't seem obvious to me like it does to you that B can't happen.

    Let me add one last point as definitions seem to be a reoccurring issue.  My view of political economy in a rough sense is the politics of stuff and the organization required to collectively gather resources to produce that stuff.  Politics roughly is the mix of power, prestige and personality revolving around ideas, intuitions and interests.  Elizabeth Warren for example is full of ideas but no personality.  Trump is full of personality, is excited by the prestige, and cares nothing for institutions.  I don't think you need to even involve the stuff aspects of UBI to decide it is DOA.  That is to say, the loss of prestige, the loss of punishment to reinforce the ideal of work ethics, etc. are enough to kill it without ever considering the resource costs.  My view previously was you were saying the taxes causes people on the margin to run (ala Grover Norquist) but I sort of suspected you were actually sniffing out purely political issues or issues that tend towards politics like power aspects of labor discipline*.  Now I think you were just focused on the max scenario where that concern of taxation is pretty valid.  I don't know if you have the same view on the replacement scenario or any other middle of the road scenario.

    * There are also political economy aspects of that subject too, but if we are arguing about that then we are just two nerds arguing over exact definitions rather than discussing ideas.

    - JCD

  • (Score: 0) by Anonymous Coward on Monday January 24, @06:26PM

    by Anonymous Coward on Monday January 24, @06:26PM (#1215319)

    I agree completely with this. However, isn't this true today? Isn't most farming in the US done by Mexican labor? My point is that jobs that don't provide economic or social value will not end up being filled by desperate people who will just take any wage. Instead, only highly productive jobs, highly important or those that are socially valued (think teacher) will be filled. Since crops are highly important the wage would have to go up or it would continue to be done by foreigners.

    Not really. A lot of manual labour is done by mexicans, but in actual fact on the scale of what we're considering, the bulk is actually done by machinery - particularly relevant when we're considering the context of asset taxation balanced against labour subsidies. If you're ploughing a 10 acre field, you're not running a gang of a hundred workers with mattocks. You're running a tractor with dozens of horsepower at least, probably more - and that only increases with scale. The question isn't whether you have american workers or mexicans (who, if here legally, would be eligible for the UBI otherwise what the hell would the point be?) but whether you have a quarter million dollar tractor run by one farmer, or a farmer, overseers, managers, and hundreds of workers turning the same soil. The argument is unchanged whether they're using mattocks, shovels or broadforks, and only slightly altered by a discussion of horses and oxen.

    Could this still be the case today? I simply don't know, I couldn't find good data. I couldn't find anything on a skill basis, degree basis, wealth/income basis or even age basis. Yet I do agree there is a net migration outward. I agree that has been the case for decades. Interestingly though, the population of California is still increasing (per census 2010-2019 numbers). I didn't spend any time looking at Oklahoma other than to compare per capita GDP in 2021: 52,913 OK vs 85,460 CA (source: wiki) and taxes. Per taxfoundation.org state and local taxes per capita in 2021 were: 6,813 CA vs 3,850 OK. Why would people be running from that level of difference? Obviously you'd run if you paid 100x average and only needed to move next door to save 100x. But would you flee your country for a 1.1-2x increase? I agree some do, but it isn't clear that many do, maybe 3-6k a year and mostly due to burdensome regulations rather than taxes or wealth: https://en.wikipedia.org/wiki/List_of_former_United_States_citizens_who_relinquished_their_nationality [wikipedia.org] [wikipedia.org] I know Europe is a bit different since the EU has a US state like system for migration but you are leaving your country, including many more dramatic differences like different tax laws.

    You should also check figures for NY and MA and others who were using those numbers to complain very loudly indeed about SALT deductions and people leaving for places like FL during the time of COVID-19 owing to the potential for remote work - but this is really a distraction from the main event, so to speak, where you're missing the ways that migration happens in business terms without people necessarily moving their domiciles. Microsoft isn't established in Washington - as I recall it's a Nevada corporation. Think of all the Delaware corporations out there. Remember the argument about Boeing moving 787 construction to SC. Ascribing it to burdensome regulations is to obscure the fact that it amounts to a drag on what people want to achieve. This is why companies go location-shopping. Even in cases where old businesses stay put, that doesn't mean that new branches or departments or spin-offs stay in the same place. This is why Austin is booming, for example. All you're doing here is quibbling about the margins on a well-established pattern that recent events threw into sharp relief. But let's ask ourselves: if 1% of people will leave a country where they feel unwelcome for reasons of taxation/regulation/cosmic butthurt at a given level, would you expect that proportion to change if you were to increase the degree of taxation, regulation or cosmic butthurt? Not every jew who could, left the Third Reich - and many of them paid dearly for it. But out-migration was definitely a strong factor.

    Capital controls clearly work to some degree otherwise there would never have been a demand to remove them. They would have just been dead laws like blasphemy still being illegal in some states. There are historic examples like the Asian financial crisis where capital controlled states behaved very differently than those without capital controls, but to be honest this is not my field of expertise. If you have good evidence of when and how they fail, I'm open to learning.

    Capital controls can work up to a point. But they don't convert your population into land-bound serfs by themselves either. All you're doing is slowing a determined outbound trickle. (Again, just look at the case of Argentina, desperate to control outbound flow and yet unable to entirely stop it especially in the light of a strong black market.) Want to find a rich venezuelan? You can, but not many of them are left in Venezuela any more. Try Miami instead. However, capital controls do impose substantial costs on business because they're an active deterrent to inbound capital flows; if you turn your country into a roach motel for money, financiers notice that and respond accordingly.

    I've been purposefully vague about UBI and the style implementation as all I was addressing was inflation with a suggestion that MMT might help imagine a solution to resolve inflation issues. Digging in deep at all the various levels, all the policy choices, that is way more work than I intended to cover. UBI to replace SS/Medicare/etc or UBI to supplement or UBI to slowly replace or ... The point is there are many different ideas for UBI and to say x is UBI and y is not is to assert a political preference for one over another. Even if it is a preference in the sense that you prefer to argue against one version of UBI over another. My point is, your assumptions seems to be based upon a rather extreme version of UBI. Something like large UBI + all existing benefits. Charles Murray for example suggests 10k + 3k in medical savings while eliminating all benefits.

    I agree that it depends strongly on what you call a UBI, but the problem then comes down to what the putative benefits are. The generally advertised benefits are: a reduction in the complexity of the social safety net, liberation from bullshit jobs, elimination of absolute poverty. This leads us directly to: if you're reducing the complexity of the social safety net, that's because you're replacing it. $$$ If you're liberating people from bullshit jobs it's because you're supporting them without those jobs. $$$ If you're eliminating absolute poverty, it's because what you're providing matches that baseline of expense. $$$. It's really that simple. If you're not paying people enough to live independently, it doesn't fit those criteria. End of story; there really isn't a lot of wiggle room. You could argue that the unemployed of the San Francisco meatpacking district should move somewhere else because you're not paying that level of UBI to them just because of local costs (ditto other expensive places such as Manhattan, downtown Seattle, DC and so on), but even if they're in a trailer park in the unfashionable end of MO, the net delivery of food, housing, clothing and medical care is tens of thousands of dollars per person, per annum, on average. As observed before, you do not and can not know ahead of time who will require how much support, so you have to pay it all to everyone for it to be universal, regardless of clawbacks through tax. This means a headline expense of 6 trillion or more, every year, in the USA. If you're not paying that much, you don't get the advertised benefits. You get Joe Sixpack some cash to pay for his next sixpack. This has nothing to do with political preference, and everything to do with believing that the proponents of UBI mean what they say.

    Would that have the same response? I think not, but maybe you think the political economy response would literally be the same? Let me be clear, I agree that:
                    A. capital controls would have to be implemented in the max version. For other versions, given the fact that it isn't a tested idea and is politically unpopular, it still likely would need capital controls just to keep
                  the horses from instinctively running out of the barn.
                  or
                  B. Capitalists would have to believe their backs were against the wall, ala 2008 crisis and want to be saved and wiling to accept some sort of trade for it.
                  Given B didn't even come close to happening, I agree that capital controls would likely be needed today. But does that mean a B-style scenario is never possible? I don't think so. It happened in the 30s and thus SS
                  exists today. Maybe due to internet and flight, that sort of backs against the wall is less likely to occur since you can just escape with your bitcoin wallet and 12 secret words. It just doesn't seem obvious to me like
                  it does to you that B can't happen.

    Sure, they can both happen. Both would suck. Governments make stupid decisions all the time, which is why South Africa has load shedding and has given up on being the world's leader in mineral extraction, and why the past president (Mbeki? I forget.) called the educated people who were leaving, traitors. This is why India is trying to back away from some of the more aggressively anti-business stances and regulations, and is trying (with success it would be generous to call "mixed") to tempt its entrepreneurial diaspora back.