Basic Income AMA Series: I'm Karl Widerquist, co-chair of the Basic Income Earth Network and author of "Freedom as the Power to Say No," AMA.

If I am guaranteed a basic income, what incentivizes/obligates me to provide value to the rest of society, if I can live comfortably without doing so?

Doesn't a basic income burden society, but not individuals? Society must work if I am to be provided a basic income, but as an individual I am still entitled to that income whether I work for others or not.

To your first question, Say your basic income is $10K. You get offered a job that pays $20K. Say the taxes on a $20K income Are $8K. If you take the job you now have $22K. Your income goes up by $12K. You can now afford better housing, better, food, more luxuries. That is your incentive, and by refusing to to work unless you get much better pay, you are giving all employers the incentive to pay good wages to all employees.

I'll answer the other question separately.

A great deal more to say on this point.

With the way benefits in the United States currently work, there are bands of income for which the effective marginal tax rate tops 100% when you include net transfers and benefits in the tax.

So if you want to discuss disincentives to work, it shouldn't be in the context of basic income only; it should be in the context of how the system currently operates.

This "lack of ambition" problem probably is not quite as unevenly distributed between income classes as people seem to think. If it were a real problem, then we should expect that higher tax rates on the highest income earners should lead to higher productivity among that group, as they now must work even harder to afford the lifestyle they are accustomed to. I have never seen anyone discuss a "lack of ambition" among that group presumably because income correlates strongly with ambition – but I question whether that's actually true.

Policy makers can't have it both ways. It feels wrong to say "hey, this group is motivated by keeping them poor," and then say "this other group (wealthy) is motivated by making them richer."

So having accepted that the upper income earners are motivated to earn every additional dollar they can, we should at least be prepared to accept that lower income earners are also motivated to earn every additional dollar they can.

What research has poked at this question? Does an additional dollar of income actually motivate upper income earners better than it motivates lower income earners?

I've definitely read people pointing out the asymmetric treatment of incentives in our society. I don't know about research on it. But this area is one of the most obvious advantages of BIG. It gives everybody the same marginal tax rate. Nobody's destitute, and everybody who works more gets more than they would otherwise.

If I can live comfortably without working, why the fuck would I want to waste time working again? Plenty of people without any ambition.

If you can live comfortably on $10K, go for it. Given your lack of ambition you probably wouldn't be a very good employee anyways.

Exactly, and to be honest that's not even the worst thing -- the less ambitious types, that is. I'm sick of everyone shooting for the top tier as if that's the most noble pursuit. If playing guitar is all you want to do in life, now you have that opportunity to fully go all in with it and not feel like you have to sell out if you don't want to. I'd love to see culture thriving without seeking the incentives to pay rent by pushing merchandise that doesn't matter to either the artist or the audience.

You remind me of the words of Everclear, "those people who love to tell you Money is the root of all that kills. They have never been poor. They have never had the joy of a welfare Christmas." The belief that you know the problems of the poor better than they do is arrogant. It's fantasy. We all want to believe that our privileges are earned. And it's simply not true. There aren't enough high paying jobs for everybody to fill. We have 10s of millions of McJobs in the USA alone. We have 10s of millions of people with no other realistic prospect. The lack of ambition is more often a response than a cause.

Can you expand more on this? It really seems to me that if people don't want to work and generally be lazy and unproductive, this will support that bad habit.

I'm not sure that not wanting to work and consume more is always and everywhere a bad habit. But there are other people who are in the habit of paying people really low wages and giving them crappy working conditions all to serve their own self-interest. That is always and everywhere a bad habit. We need to break them of that habit by making sure that there are no desperate people who have to take those crappy jobs with crappy wages and awful working conditions. People who have the power to say no to that and to demand a good wage for a days labor.

Wanting to work is a two-way street. Surely you agree that "everyone has their price?" If you've got a problem with people who don't want to work for what you're paying, then pay more until you hit their price. That's the price of freedom.

To your second question, our goods are not created solely by human effort. We can't produce anything without resources. But we don't share our resources. Some people own them. Some are propertyless. Without a basic income a small group of people uses the power of the legal system to take control of all the Earth's resources. Property owners pay each other for control of resources, but--without basic income--they never pay the propertyless for being born into a society where they own nothing. Without basic income their only access to resources is to work for an owner. Basic income is really just paying back for what you take. If you take ownership of resources, you own something back to all the people who are therefore not allowed to use those resources. What you owe is taxes, and those taxes should be paid back to all the people who would otherwise be propertyless. Basic Income is not something for nothing. It is paying back for the resources you take out of the common pool.

" Without a basic income a small group of people uses the power of the legal system to take control of all the Earth's resources."

OK, Karl. You've stated the fundamental problem, but how do you address the fact that this "monied elite" has control over the entire economic system, so that corruption rules, democracy is simply a media show, and no significant change is allowed? You imply that the tax system can equalize things, paying back the propertyless for their loss of "public" resources, but the tax system we have is nothing but corruption, with a thin layer of "progressive" benefits atop a mass of special-interest theft of public resources. In short, how can a basic income ever accomplish the "payback" you talk about without reforming the tax system?

It's economically feasible--simple really--to get corruption and bad incentives out of the tax system. The barriers are political. In politics, if enough people behind something, they get what they want. In Egypt, with a population of 80 million, they got 30 million people out on the street on the same day, and Morsi was gone. They made a very poor choice not to push out the military along with him. But that was their mistake. They had the power. We have the power right now. And you're right the corruption in our system is the root of most of our other problems. It's going to take a massive movement to fix. But the power to do it is there.

So in summary, Basic Income is based off the principle that owning resources is morally objectionable because they are things that everyone needs? I've personally thought for a while that resources should not be controlled by the private sector, so I'm inclined to agree.

I don't think private ownership is morally objectionable if you pay back--to the nonowners--for what you take out of the common pool. All I ask of property owners is that they pay enough taxes to support BIG. If they do that I encourage them to go about their business. Get rich if you can.

Do you think a country will institute a UBI in the next, say, 10 years? If so, which, and what conditions will lead up to it?

I'm a firm believer in J.K. Galbraith's statement: "Anything can happen, and it probably will." The future is inherently unpredictable. People are always talking as if they really know what's going to happen next, but they're all just guessing. So, you should take my answer to this question to be no more than a guess. When I started writing on BIG in the late 90s, the adoption of it anywhere in the world seemed extremely far off. But in the last few years, things have changed dramatically and quickly. A lot of unexpected things happened: the Great Recession, increasing inequality, the Arab Spring, the Occupy movement, the anti-austerity movement, etc. out of all this a lot of people in diverse parts of the world have together hit on basic income. The movement is growing. People are talking about it in mainstream media in a lot of different countries.

So, I think it's possible that some country will institute UBI within 10 years. I still can't say it's likely, but it's possible. There are developing countries that are interested, and there are very developed countries--such as Switzerland--with movements for UBI. So, it's hard to say where it's most likely to happen.

It's possible that it could happen by a powerful elected leader deciding to make it her issue. But I think it's much more likely to happen through a mass movement people. If UBI support keeps growing at the rate it has over the last year, then within 5 years the whole world will become BIGists. It's not going to keep growing that fast, but it could grown enough to make UBI a reality. Anything can happen.

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I think some things are more likely than others. But a lot of things are completely unexpected. And when a big unexpected thing happens, it can change like likelihoods of a lot of small things.

For example, I've supported BIG since 1980. I've written about it since 1996. I've been following the news on it since 1999. Did I see the new movement for BIG coming? Not at all. I read all the news I could find about BIG, and nothing told me this movement was about to happen. Nothing now tells me how far it will go.

Some I'm hopeful.

The most common stonewall argument I hear is "How do we pay for this?"

Some people want to hear more than a broad explanations of eliminating inefficiencies in distributing social aid, removing tax cuts for "job creation," and taxing the ultra rich.

So my question is: Do you know of any countries that have outlined a precise budget, that shows how exactly how a basic income would be paid for? What programs would be cut, what the total cost would be, potential savings in police and health care costs, etc.

Also, which system do you think would be the best to implement, a basic income, a guaranteed minimum income, or a negative income tax?

I don't know of any government studies, but there are a lot of cost studies by economists and sociologists. Charles Clark did some estimates a few years ago. He calculated that the United States could finance everything it's currently doing plus a UBI for a flat income taxes of about 38-39%. This was except for the things that could obviously be replaced by UBI. I think the way he did it was if your social security was $20K and the UBI was $10K, you'd get $10K in UBI and $10K in social security--so that you're just as well off.

I prefer UBI rather than NIT mostly for political reasons rather than for economic reasons. I think it's more politically sustainable once in place.

How do you address the obsessive "there is no free lunch" objection?

Yes, there is no free lunch. Everything comes from somewhere. But the world today is not a perfect meritocracy. There are millions people around the world--including the wealthiest people in the world--receiving something for nothing all the time. Wealth is reworded with more wealth. If you own a resource, a copy, a piece of land, anything useful, you don't need to do anything to make money off it. Someone else can manage it, and you just collect the returns. If you spend less than the returns, your fortune will grown, and you and your family can continue to become wealthier and wealthier for generations. That is where the money has to come from--from the regular return on capital, the daily free lunches handed out by the way our society distributes ownership.

When I make comments in support of a basic income, I generally get the standard replies about handouts, work not getting done, societal collapse, etc.

What is it going to take to tip the public mind toward the benefits of this system?

Everything I've read from economic perspectives and academic sources points toward it being a solid way to move forward. The media in general cuts it down as socialist bullshit. It's a tough hump to get over.

This is a difficult one for me. My specialty is in how to understand it, how to know it works, how to assess it as just against the principles of justice that philosophers have developed over centuries. My specialty is not in how to convince people for it. So, again it's a question that's better for the activists. But I'll try my best. One thing I do. Is I have an answer for most questions about BIG, and I'm prepared to argue my point--hopefully respectfully. So, I can address the issues of handouts, work not getting done, societal collapse, etc.

One answer of mine to one the common questions is unusual and it's been a major theme in my writing since I started. When people say it's something for nothing. I argue most emphatically that it is not. We force so many terrible things onto the poor. We don't get their permission. And without UBI, we don't pay them back for what we force on them. We make them live in a world where everything else is owned. We make rules about all kinds of things they could otherwise do. Our ancestors lived without such rules for 200,000 years. They could hunt, gather, fish or farm as they wished. We've taken all that away and given them nothing in return. UBI is long overdue. UBI is paying for the privileges you have taken. If we don't have UBI we put the propertyless in the position where they have no other choice but to work for the very people whose privileged control of resources makes the propertyless unable to use resources for themselves. UBI is no less than the end of effective slavery.

Thanks everybody for your questions. I learned a lot, and I found it a very enjoyable experience. I am going offline now, but I'll check this thread again later to see if anything new has cropped up. I'll try to get to everybody's questions and comments everything.

Thank you very much.

And a bit thanks to Scott for putting this series together. You've done amazing work.

I did some elementary calculations. Giving every American Basic Income (~$1000 a month) would cost over $3 Trillion every year. How do you think this can sustainably be financed?

You're looking at the gross cost rather than the net cost. The taxes come from the same people you're giving them to. If the government takes $1000 in taxes, then gives $1000 back to you in basic income, it costs you nothing. Even if you're taxes are only $100. The net cost is only $900 of providing your UBI. The real cost is the net redistributive effect--how much less do the net contributors have and how much more do the net recipients have. The net cost is about a tenth of the gross.

If the government takes $1000 in taxes, then gives $1000 back to you in basic income, it costs you nothing.

This is the broken window fallacy on steroids. You are ignoring the opportunity cost of alternative investments for that money.

Much more than $1000 will be taken from the wealth generators and providers of capital than the $1000 they will receive on UBI. It will directly lead to capital shortages for long term investments.

Moreover, transferring this much wealth would lead to an increase in the velocity of money, and a bout of inflation, destroying even more capital.

See my answer you yours_duly.

Thanks for the reply, but I think it still costs government the same money. Lets say if I pay $1000 in taxes and given $1000 as UBI, the government still has to make do with $1000 of lost revenues that could have been used to fund different things.

I do agree with re-distributive effect of it, but then again there is a question of political will.

EDIT: For the record, I am for UBI. Just want to construct a model that is easy to sell - even to the right wingers.

Actually not it is not take money that the government could have just as easily used for something else. Let me explain. Say 3/4th of the population are net payers into UBI, and 1/4th net recipients. We tax the net payers $8 each on average. We give $7 to everybody. So, the net taxpayers are only worse off by $1 on average. They only have to cur their spending on all other goods by $1. That's my plan. The alternative you propose is to tax the net recipients by the same $8, give nothing back, give $7 to the average net recipient, and then use the remaining money for other government spending. Now the net payers have to cut their spend 7 times as much as they have to under my plan. That's the cost of a program. How much do the payers have to change their behavior to pay for it. The people under your plan have to change their behavior 7 times as much as the people under my plan.

My only concern with UBI has to do with Social Security. The average monthly benefit for retired workers is $1,294*. Which is less than a lot of estimated potential UBI payments. I would hate for my parents to have to go back to work in their 70s to make up the difference. What are your thoughts on reconciling current Social Security benefits with UBI?

*source: http://www.ssa.gov/news/press/basicfact.html

No, I don't think anyone who supports UBI would want to cut social security like that.

In some countries we have social welfare programs similar to a BI but are not universal nor inconditional and very clientelistic.

How can we change this when our corrupt governments rely in these programs as tools to amass power?

A movement of the people. People have power. It's very difficult to exercise because you have to get many people together working for something. But political action can and does win sometimes.

Convincingly explain how someone working harder at a small biz than average 9-5er, enduring our wonderful regulatory state and it's endless complications, would accept the idea of BI?

Put another way, how do you convince self starters who outwork the average to better themselves, to accept living wages on those who don't work/aren't as dedicated-in the form of presumably higher taxes?

Also, have you always/ever voluntarily donated a percentage of your professor salary towards a charity(or cut a check to the Treasury itself) that would help others for as long as you've been a proponent of basic income? If not, why?

I am a small business owner. I'm in partnership with my brother. He just left his job to manage our business full time. If we had a basic income (and universal healthcare), we could have built our business much faster. He could have quit his job years earlier.

We pay living wages to all employees and contractors. Living wages don't hurt employers. You don't need a world full of power huddled masses to have a successful business. If we have basic income, you'll have to pay more for your labor, but your competition will be paying more for their labor.

That's the old red herring of private charity. If you're poor and you argue for a more just society they will say "if you're so smart, why aren't you rich?" And if you are not poor they'll say, "why don't you just shut up and share what you have?" The poor do not need the spare change of the fortunate. They need a massive change in the rules. That's what we need to work for.

That said, I do give. And I hope to build my business into being able to give a lot, something really worthwhile.

Will a UBI cause inflation?

Not if it's well financed. All government spending creates inflationary taxes--more money going into the economy. The government can counteract that inflationary pressure by taxes. There's nothing special about UBI and inflation. It's like any other government spending. Just make sure the taxes are at a level that will counteract the inflationary pressure it causes.

How do you think we should deal with people who can't work but can't survive on a basic income alone, such as severely disabled people who need care?

UBI should not replace benefits aimed at that group of people.

Imagine Switzerland introduces a basic income. If we accept that on a national basis there would be only a small inflationary pressure, what other problems do you predict arising from international concerns? What new problems would multinational corporations face? There's a lot of talk of flat taxes to fund a BI, but corporation taxes are often significantly lower. How do you imagine corporations that choose to stay would be taxed?

I have to admit. I don't know how to answer that question. But it's very interesting.

Hi! I've visited the Basic Income subreddit a few times and find it a very interesting concept. One of the things that comes up often is "how would we pay for it" and the answer is generally that it would replace welfare, to a degree. This kind of repulses a lot of people who don't understand it clearly.

Could you clarify how it would be paid for and why it's not a bad thing that it would replace other social programs?

See my answer to magenker above. To follow on from that. If you're needy and you're getting social security of TANF or the dole or any other program, the important thing is that you keep getting what you need. UBI should be set up so that people do not get less than they are now--the only exception being people getting much more than they need. I don't think many people are getting that--except people getting enormous tax credits on luxury homes and things like that. Those are the kinds of things we can outright replace with UBI.

You've stated in previous answers that it would take a movement of the people but that isn't very clear. What would you like to see the people do? What are some specific steps we can make today toward implementing UBI (write to our government, etc)?

Second question.

Could a true UBI system be implemented at a municipal or provincial/state level or does the entire country have to buy in? I believe UBI would be more successful and garner more attention if people could see it in action and it would be a lot easier to convince a municipality than it would an entire nation.

To the first question, I'm a trying to be a leading theorist, but when it comes to activism I'm a follower. We all have to specialize, and that's how I've figured I can best contribute. I know that enough people on the street always what they want (for good or for bad). Other kinds of actions work too.

People have told me for years that USBIG and/or BIEN should be an activist movement. I said, as soon as somebody who knows how to organize one volunteers to lead it, I'll follow. Suddenly those people have begun to come forward. There are many, many people all of a sudden. Enno Schmidt was one of the organizers of the successful petition drive in Switzerland. Barb Jacobson and Stan Jourdan helped organize the EU petition drive that--although it was unsuccessful--raised 285K signatures. Those three will have an AMA in this series on Sep. 19. (See the Schedule) Let's both ask them that question.

The more isolated the place is, the easier, but I think it can be done anywhere. Namibia is a poor country with only 300,000 citizens. A small BIG would go a very long way. That would be a great place to start.

I'm curious if you've studied the effects of American Indian tribal payments? Many tribes that run casinos and other business ventures share the income with their tribal members. Some tribes give huge payments (like the Mdewakanton Sioux) but others have payments in line with your suggestions (like the Potawatomi).

Edit: The Potawatomi Tribe of WI I was referencing actually has fairly high payouts. A more relevant example might be the Ho-Chunk Nation Member Casinos of WI which paid out $12,000 annually to tribal members in 2012

I know a little about the casinos. I've reported on some of that research in my work for BI News. I'd like to learn more. Do you know some good references on it.

What is to prevent the basic income being eaten up by inflation through a basic cost increases for housing or food, thus creating a new poverty line?

Two things: A cost of living adjustment, and see my comments about inflation above.

What does the experience in Alaska show us?

And, just to be sure, is yours the same name I see now and then on usbig.net and basicincome.org?

Yes, that's me. I've written a lot about "the Alaska Model." It's a small, variable UBI given to every Alaska once a year. It's far less than enough to live on. So, it's not the UBI we all want to see. But it does tell us a lot about UBI: 1. Once in place, it's extremely popular. 2. It is affordable. 3. It's not a disruption of society. 4. To create at it, you have to take advantage of the political opportunities--they come in many different types.

How big of a difference will those that are say 150k to 200k a year compared to 1 million a year or more be effected?

This question is very specific to the type of plan introduced. I prefer resource and rent taxes which would come mostly from the wealthiest and would effect the rest of us in various ways depending on whether we receive a lot of income form returns on capital and resources.

The Basic Income Flat tax plan would give a much more straightforward answer. Say a $10K UBI with a 40% tax rate. A single person making $200K would pay $80K and receive $10K for an after tax income of $130. A could would making $200K would have two UBIs for an after-tax income of $140. A person making $1 million would pay $400K and end up with $610K. But that's just a rough estimate based on one narrow model.

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See the posts about about the growth of the movement. A sudden movement appeared apparently out of nowhere less than two years ago, and it's been growing exponentially. More than 400,000 different people signed petitions for UBI across Europe, including people in all EU member states and Switzerland, where enough signatures were raised to trigger a referendum, which will take place in 2015 or 2016. So, things are happening. How far it will go, know one knows.

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Allende was destroyed by a CIA led coup ordered by Richard Nixon.

See my comments about about inflation.

Would the children get also basic income? Also what would be a good estimate $ amount e.g. for USA? Thanks

In most plans yes. There are a lot of different plans out there. I support just about anything moving toward BIG or UBI. A lot of plans have a smaller UBI for children because the cost of getting everybody out of poverty is much lower if children have a smaller amount.

How does someone that supports basic income justify a fixed rate when a single country can have multiple COLA estimates?

Why the push for basic income versus some economic protectionism, such as taxes and tariffs on the import\export of labor? Something like that would encourage more competition in all markets local and global (see the Ma Bell breakup, and the economic impact immediately after).

On the first question, I support a BIG large enough to live on. It's a small detail to me whether the BIG is the same all over the country and just high enough in the most expensive place or whether it varies around the country so it's just high even everywhere. Whichever works best out of those to is the one I'm for.

Why even discuss basic income? It will likely never happen...

That's what they said to the abolitionists, the suffragettes, the anti-monarchists, the gay marriage activists, and really ever other group that's been behind every other significant change.