My friend Danny sent me a meme about Universal Basic Income.
Me: I have issues with the whole Universal Basic Income concept.
Danny: Tell me more! Also, it was more about the "money can't buy happiness", but I can always use a good Andrei Opinion.
Me: Strap in.
So, there are two fundamental assumptions in UBI. One, that it is an Income - not just subsistence/survival, but enough money every money for a person to live a modest but respectable life. Two, that it is Universal - given (not available, but given) to absolutely everybody, regardless of their otherwise income level.
There are immediately two purely mechanical problems here. One is the cost of it to the budget. The median gross payout in Estonia in Q4 was 1157 EUR. That equates to 992 EUR net. Is that the UBI level? The minimum wage, after taxes, is 550 EUR. Is that the UBI level? 992 EUR is enough for a single person to live on their own, rent an apartment, not feel constrained by everyday costs. 550 EUR is enough for someone who doesn't have to e.g. pay rent, and shares the utility bill. Then it's probably enough for subsistence. So maybe let's say minimum wage is UBI.
Let's assume 80% of people are adults, and entitled to UBI. So that's a little over a million people in Estonia. So the payout of UBI - just the net, on the low end, assuming we don't count income taxes or administration costs or anything else - will be 550 million euros a month, 6.6 billion euros a year, or fully HALF of the entire national budget of Estonia.
The second mechanical/mathematical problem is that dumping another entire half a budget's worth of discretionary spending into the economy immediately means inflation, so UBI has to increase to account for that, and you have a runaway cycle. So, there are lots of great philosophical essays on why UBI is great, but no good answers about how you would make it happen.
Danny: Makes sense.
Me: And then based on these problems, you can go a few different ways. The obvious one being, means-testing. Don't give UBI to people who are already gainfully employed. Well, then the next problem is obvious: if I am guaranteed a legitimately sustainable living standard without any conditions, why would I make the effort to work and contribute to society? And if I am working an unpleasant job, then how are you going to convince me that it's right and proper that my taxes - the fruits of my labor essentially - are going to pay for someone else's life? Especially if it's an unpleasant but also not super highly paid job.
Now, let's approach it from the other end. What is UBI actually trying to achieve? The freedom from want for every citizen, and the ability for every citizen to pursue not-necessarily-commercially-viable work for their own self-actualization. Right? It's not actually saying "let's allow everyone to sit around in front of Netflix all day because their rent and food and healthcare is taken care of". It's saying "let's allow everyone to work on what they want if they are OK with only getting a basic amount of income for it". And that is achievable with much less radical means:
1) Strong government funding for arts & science, meaning that if you want to make non-commercial art... You can make it, and survive off Kultuurikapital-type grants. Like a lot of artists do already. Just strengthen that system, etc. Expand doctoral stipends, etc.
Danny: Again, makes sense. I thought UBI was more about addressing poverty, though.
Me: 2) Enforce the minimum wage system. It's patchy in the US (especially since your tax system is so diffuse + the cost of healthcare and higher education), but best practice from other places in the world shows that it's doable.
Danny: We do like to make it complicated.
Me: And expand/incentivize flex-time work schemes, so that it's possible for people to make minimum wage/UBI-levels while working much fewer hours per week, and pursuing their own goals and projects. But not like UK zero-hour contracts or the US right-to-work bullshit, rather a system that incentivizes/guarantees a sustainable income for part-time work.
Danny: I don't know what the zero-hour contracts are. I assume you do. You know things. And drink. Or whatever that saying is.
Me: Sort of the same as right-to-work I think... an employment contract where your pay is hourly, but you're not guaranteed X hours per week/month worked. You work however much your employer needs you to work, which could be zero.
Danny: Ahhh, I see. That does suck.
Me: Yuuuup. And then there is option 3) The Norway model. No, not that one.
When Norway first became oil-rich, which happened quite recently, only in the 1970s, their first instinct was: Let's raise our population's living standard by subsidizing primary industries, dropping import tariffs, and making everything really cheap! Result: Swedes, Finns and Danes coming over the border in droves to buy up cheap goods. Sort of like the proverbial Chinese mainlanders buying up all the baby formula in Hong Kong. Norwegians: Aight hold up. Let's go the other way: We RAISE taxes, RAISE import tariffs, make everything in the country really super fucking expensive, BUT we pay everyone in the country a really high salary, so that they can afford all of it! And nobody else can.
Danny: Can I just say how much I am enjoying this? It has been too long since Andrei Opinions.
Now, you might say, that's a cool trick if you're Norway and you have the world's largest sovereign wealth fund. But it's what Finland did, too. And Sweden and Denmark. And they don't have intrinsic resource wealth. So a Hesburger cashier in Kuopio makes enough money working part time to not worry about everyday costs and occasionally take a lowcost holiday to Tenerife. And [that one artist friend of ours] gets a government grant to fuck off to the Arctic and forge knives for three years.
Danny: How did they manage it, though? Would you say that this benefits from a collective mindset?
Me: That's a huge part of it. Not necessarily collective in the sense of Communism, but the mindset of "it's worth paying higher taxes to not have homeless people around". Social cohesion and unity, AND efficient and competitive industry. Everyone pays high taxes BUT everyone understands what they get for them. In practice the living standard between Estonia and Finland is not that different (how big your house is, how fancy your car is, how often you can afford to go drinking), but Finland has a lot more security. But it's also a question of a developed economy too. The difference between Finland and Estonia is 50 years of accumulating capital assets, established industries, education, corporate knowledge, etc.
Danny: Obviously, I am thinking of my own sad-ass country here, where people very much see that as a personal failing, and I wonder if something like this could even work in the US with our bootstraps mindset
Me: Right! And so that's the gist of my problem with UBI: it is an idea invented and championed by America's leftists who have been so beaten down and radicalized that they are simply not interested in a rapid-ish implementation of best practices a-la FDR (or cough*Warren*cough). They feel like it is Their Time to have Trump But Good. and rather than fixing their society bit by bit (and letting go of their own fucking national exceptionalism), they will settle for nothing less than an immediate leap right to Fully Automated Luxury Gay Space Communism.
Danny: Very, very much so.
Also, I know what I am getting you for your birthday now.