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I've done past blog posts on the basic income guarantee, the idea that the government should use cash transfers to make sure everyone has a minimum income, because it's an intriguing idea and Robert Anton Wilson was interested in it.
I've noticed recent news here and there that recent studies of such programs haven't been very encouraging, and Substacker Noah Smith, in a recent piece, has a good summary, excerpt:
"In recent years, some new research has come out that tempered my enthusiasm for the cash benefit revolution. First, a basic income trial in Denver failed to decrease homelessness, which is one thing you’d really like to see basic income do. Then, an even bigger basic income trial in Texas and Illinois found that just $1000 a month caused 2% of people to stop working — a very big disemployment effect, contradicting the results of earlier studies. Worryingly, this study is much more believable than any of the more optimistic studies, since it’s a very large randomized controlled trial. (Of course, it’s just one study; the papers showing little effect are still more numerous, even if no single one is as reliable.)
"Meanwhile, a lot of these studies are finding that cash benefits aren’t really doing much to improve quality of life for the people who get the cash. You can measure various things we think curing poverty ought to improve, like health, education, employment, housing, etc. And unfortunately, these recent studies show that cash benefits aren’t making those indicators look much better."
There's more at the link. I should note that Smith still favors cash transfers:
"A more valid counterargument — and one that Bruenig touches on, but could have been a lot more explicit about — is that poor people having more cash is simply a good thing in and of itself, whether or not their kids become healthier or they get a better education or they report less depression. Being able to afford more food, more transportation, more housing, etc. makes your life better, even if it doesn’t make you lead a healthier lifestyle."
In his newsletter, in an issue that I can't link to because its behind a paywall, Richard Hanania says those results are unsurprising. "The underlying premise was wrong. There's this idea that poor people are just normal people with less money, rather than understanding they're poor in the first place because they have dysfunctional traits. Money will not solve low intelligence, poor impulse control, an inability to cope with unexpected challenges, etc. This is something conservatives have been historically more likely to take for granted."
5 comments:
On Richard Hanania's argument, there's a long RAW quote which I find very pertinent. It's from Trajectories #13 (1994):
"I have about 23 laws, which I won’t bother reviewing. Most of you have encountered them in my books. But of all the right-wing clichés, the one that annoys me the most is that you can’t solve problems by throwing money at them. The idea that you can’t solve problems by throwing money at them seems to me literally the extreme stupidity of the right wing, which is renowned for inventing stupid ideas.
"Let’s take an ordinary bloke – like me – in an ordinary month. One of my problems is to keep a roof over my head and not land on the street. I do that by throwing money at my landlord, and that solves the problem. Then there’s the matter of getting groceries into the house. I do that by throwing money at the supermarket. They won’t settle for goodwill, or philosophical observations, or right-wing clichés. They want coin of the realm. If I need medical attention – prescriptions filled, and so on – the pharmacist wants money. Every time Arlen or I go to the doctor, he wants money.
"So far in my life, every serious problem I have confronted, I have been able to solve by throwing money at it. The only problems I couldn’t solve were those where I didn’t have enough money to throw at them – and some of those problems are still haunting me. Some of them I got partly destroyed by and had to recreate myself. But I just can’t imagine a problem that can’t be solved by throwing enough money at it." END QUOTE
These studies are good for rebutting "cash transfers are a miracle cure" arguments but not so good for rebutting "cash transfers are better than other forms of redistribution" arguments.
Also, I laughed at this (from the piece Tom links to):
"This is all extremely disappointing. In these well-designed real-world experiments, cash benefits are making people produce less in the market, while not really making their lives much better. And as Piper goes on to explain, nobody can really figure out why. People aren’t using the cash to buy drugs or gamble or whatever; they’re working a bit less, but mostly they’re just spending the cash on things they need..."
So, "not really making their lives much better"... yet: "they’re working a bit less"
They're working a bit less. For a majority of people (certainly those financially forced to work long hours) I think that probably counts as an improvement! There was a time when that was ALL I wanted - to be able to work a bit less.
Universal Basic Income isn't just for the poor, of course, it's... universal. One of its beauties, for me, is that recipients each decide for themselves how they spend their cash. They don't have Richard Hanania deciding that because they're poor they won't be competent to spend it in a way that a) Richard thinks will be effective for them, or b} that will count as somebody else's idea as an improvement in their lives.
Scott Santens, who doesn't have the strong "market" slant that many of guys seem to have (and who seems to have a more RAW-friendly framing, I would say), has produced some of the most comprehensive compilations of results of the many, many, many studies - large and small - conducted globally into the effects of UBI. The results seem vastly, overwhelmingly positive to me. But of course the occasional negative (or rather "no improvement according to our criteria" result should be taken into account too.
Thanks much, Brian! I saw that RH quote like a big pile of dog shit on a shag carpet. Sure, I could clean it up, but I'd really rather not have to :)))
And... I've now had a chance to read Matt Bruenig's article (which Noah Smith briefly discusses and sort of dismisses). I can see why Smith doesn't like it - Bruenig quite effectively (and amusingly) undermines the whole conceit of Smith's approach, imo, although not directly - he's critiquing Kelsey Piper's article (which Noah Smith uses as part of the basis of his own piece). If you see UBI a certain way, eg in terms of labor market economics, and those expectations aren't met, then you may express "extreme disappointment" in the results as Smith does. Bruenig comments (on Piper's article, but it applies to Smith's approach, I think):
"It is amusing to imagine someone conducting this sort of research on typical welfare recipients. After checking in on the sample for the fourth year in a row, the foundation-funded researcher studiously writes that, despite receiving tens of thousands of cash dollars over the period, the retiree still has no job, the paralyzed woman still can’t walk, and the man with dementia has actually seen his cognitive abilities decline rather than improve."
LOL. Bruenig's piece also touches on the Nordic model, and the somewhat different view of UBI that would imply, in terms of expectations/effects - which should interest folks intrigued by RAW's expressed liking for that model.
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