Comment by roughly
5 months ago
Yeah, it turns out that things like free health care, adequate food, good schools, and all that other socialist mumbo jumbo is actually good for productivity and the economy, too.
5 months ago
Yeah, it turns out that things like free health care, adequate food, good schools, and all that other socialist mumbo jumbo is actually good for productivity and the economy, too.
I wonder how many people would start businesses if we had UBI and free health care as a safety net.
I grew up in Norway, that while it doesn't have UBI does have a safety net that meant the notion of ever living in poverty was just entirely foreign to me growing up, and for me at least I think that made it easier to take the decision to leave university and start a company.
The risk of ending unemployed was just never scary.
This was a worry for me when leaving my full time job in 2022 to work on open source. Our OSS project was able to pay rent, but was concerned about healthcare costs for my partner and me (NY state has extended COBRA coverage, but it's extremely expensive). My co-founder lives in Australia, which has free basic health care, so he was up for leaving his job before I was.
Taking the risk was one of the best decisions I've made, but if I had a chronic health condition/higher healthcare costs, probably would not have been comfortable.
It takes a good idea and a willingness to take a risk to start a business. I don't think that risk aversion is what's stopping new businesses, there are a lot of people who do a lot of what I consider too risky.
Instead, what I wonder is how many new businesses wouldn't be viable under a tax structure that provides ubi and health care. Not to be dismissive but that's definitely a concern in a world replete with fledgling businesses that mostly fail.
Yeah this is sort of the reaction I had. Removing "risk" with UBI and free healthcare and free childcare also removes the filters for a lot of people who would be bad at running a business. If you don't have the stomach to take the risk and do the work to make your idea a success, then maybe you shouldn't try.
We don't need millions of more failed businesses as the result of giving everyone UBI.
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The data on UBI isn't out there, but it is notable that countries with similar tax rates to the US manage to have universal healthcare and more expansive safety nets. Some examples: New Zealand (tax rate ~30% less than the US), Korea, Switzerland, Australia, UK, Japan, Netherlands, Norway.
Americans really should be asking why we're paying a significantly higher tax burden than New Zealand and not getting similar services as part of the bargain.
Put another way: the US is incredibly rich compared to other countries. Our poorest states have higher GDP per capita than most rich countries. And our taxes are not particularly low. Our social issues are 100% about how we choose to allocate our shared resources. The good thing is we can always choose to make different choices.
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I think it’s more likely that UBI discourages business creation than encourages it.
Though the studies seem to show roughly zero net effect so perhaps these cancel out.
Several of the UBI pilot studies included new venture creation (including solo self-employment, not just classic business creation) as part of their measurements. The last few I looked at had zero difference in new business creation between recipients and control group.
A lot of the UBI trials have actually had disappointing results. The arguments usually claim that it’s not a valid test because it wasn’t guaranteed for life, or the goalposts move to claim that UBI shouldn’t be about anything other than improving safety nets.
Unfortunately I think the UBI that many people imagine is a lot higher than any UBI that would be mathematically feasible. Any UBI system that provided even poverty level wages would require significant tax increases to pay for it, far beyond what you could collect from the stereotypical “just tax billionaires” ideal. Try multiplying the population of the US by poverty level annual income and you’ll see that the sum total is a huge number. In practice, anyone starting a business would probably end up paying more in taxes under a UBI scheme than they’d collect from the UBI payments.
I actually did the math for US once, calculating how much more tax it would take to give everyone minimum wage. The resulting tax rate would certainly be fairly high, but not excessively so; several European countries have higher brackets today, and their economy doesn't collapse.
But also, are you accounting for all the means-tested welfare that such a program would replace?
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The "classical" UBI argument from a liberal point of view (classical liberal, not US liberal) has typically been that UBI would lower the complexity and by extension cost of welfare by removing the needs to means-test. In Europe, UBI was typically more likely to be pushed by (by our standards) centre-right parties.
For this reason, UBI traditionally was seen negatively by the left, who saw it as a means of removing necessary extra support and reduce redistribution.
Heck, Marx even ridiculed the lack of fairness of equal distribution far before UBI was a relevant concept, in Critique of the Gotha Program, when what became the German SPD argued for equal distribution (not in the form of UBI), seemingly without thinking through the consequences of their wording, and specifically argued that "To avoid all these defects, right, instead of being equal, would have to be unequal".
Parts of the mainstream left today has started embracing it, seemingly having forgotten why they used to oppose it.
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> Any UBI system that provided even poverty level wages would require significant tax increases to pay for it
Or cutting other things to pay for it, in addition to smaller tax increases. And the costs go down once it's bootstrapped long enough to obtain the long-term economic benefits that grow the economy (which will take a while to materialize).
Honestly, my biggest concern with it is that people will (rightfully) worry that it won't last more than 4-8 years because the subsequent administration will attack it with everything they have, and thus treat it as temporary.
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UBI is both a pipe dream and unnecessary.
n = 1, but if we get UBI, I will immediately start a precious metals brokerage business.
Obamacare is threatening to capsize the country with its cost.
America is #3 in the world in per capita public education spending (Luxumberg being #1). Which is the education system I always see Europeans maligned as producing “dumb Americans”.
US also ranks #1 in public healthcare funding both as per capita and as percentage of GDP. https://en.wikipedia.org/wiki/Health_spending_as_percent_of_...
Reality doesn't match your claim, for example when one looks at European countries who have all of that.
Why is "the economy" our highest priority here?
Why is the production, distribution, trade and consumption of goods and services (aka, the economy) the highest priority?
Well, mostly because it's required to keep the vast majority of people in society alive and the effects of disruption are only second to war in terms of potential for misery.
It’s not, but we seem to have to keep convincing business people that they’re part of society, so it helps to be able to appeal to their pocketbooks, too.
Have you seen comparisons between American and Canadian productivity? It’s definitely more complicated than just socialist leaning government programs make the country more productive.
The Canadian economy is not doing very well.
And yet every single socialist, European country is behind the US in terms of their economic output.
https://ourworldindata.org/grapher/labor-productivity-per-ho...
So tired of the argument.
Not everything is measured in "economic output", not to mention that metric itself doesn't make any sense when comparing countries of vastly different size, population etc.
Yeah, it’s like forgetting that the point of money in life is living, rather than the money itself.
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Totally agree.
However, this only works in a high trust society, which we no longer have.
Trust is irrelevant, families gain the after tax income of working mothers but society gains not just the pretax value but the actual value of work generated. Thus subsidizing childcare and moving the needle to align society’s benefits and family benefits is a net gain without the issue of trust being involved.
The same is true of quality public education etc, however creating US vs THEM narratives are politically powerful even if they don’t actually reflect reality.
How can trust be irrelevant? Why would anyone want pretenders and deceivers to have better families?
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While in a low trust society, which you obviously already have, people are most productive when they're at perpetual risk of starvation.
No, you simply are unable to reap the benefits that are available to high trust societies.
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"productive"
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