UBI and the Anti-Work Vibe Shift

Earlier this week, I attended The BIG Conference, where OpenResearch presented results by Vivalt et al. from their three-year study of people who received unconditional money. Unsurprisingly, the study participants became less inclined to work jobs.

Noah Smith, among others, interpreted this as bad news for Universal Basic Income. But the key insight that the Noah Smiths of the world seem to be missing is that, in today’s world, we artificially elevate labor demand to keep people employed. UBI means not having to do that anymore.

When we create jobs for a purpose other than the product of the labor, we’re paying people to waste their time unproductively. This is what happens under full-employment policy. This is what happens when we use expansionary monetary policy to boost consumer demand.

We observe no significant effects on investments in human capital, though younger participants may pursue more formal education. Overall, our results suggest a moderate labor supply effect that does not appear offset by other productive activities.
Vivalt et al. | The Employment Effects of A Guaranteed Income

This OpenResearch study can only see the effects of unconditional cash on labor supply. But Universal Basic Income brings down labor supply and labor demand together. “Other productive activities” suggests that the original activities were productive. It assumes that working the job was productive. However, this is not a safe assumption in our world of full-employment policy and demand stimulus through monetary policy.

The idea that people will sell their labor less if they don’t need to is hardly news. If you understand how incentives work, it’s obvious. People who receive free money don’t have to work as much. We shouldn’t have to learn this from a study.

It should be clear that this wasn’t actually a study of Universal Basic Income. Last year, I emphasized that it’s not possible to pilot a UBI. Giving cash to a small subset of the population is not UBI. UBI goes to everyone. It changes the economy as a whole. These types of studies only measure how people respond to unconditional cash transfers in the context of the current economy.

There is no such thing as a UBI trial. There is no such thing as a UBI pilot program. Instead, there are cash transfer experiments being branded as UBI.
Alex Howlett | UBI vs. MMT 1: What do Words Mean?

Universal Basic Income is neither a safety net nor a welfare program. It is not the answer to a coming robot-induced job-pocalypse. Universal Basic Income is a solution to the problem of how to distribute money to consumers without distorting the allocation of labor and capital. No make-work jobs. No over-stimulated financial sector.

And worst of all, the basic income recipients didn’t seem to transfer to better jobs or go back to school — two of the most powerful arguments for basic income. Instead, people just sat around at home.
Noah Smith | More disappointing results for basic income

Even UBI supporters tend to use these arguments, but the arguments are incredibly weak. The case for UBI does not depend on how people choose to spend their free time. It depends on the cost of forcing people to waste their time. There exists a hypothetical level of UBI that minimizes the extent to which we force people to waste their time. If people choose to waste their time anyway, that might affect the level of UBI we can afford, but it doesn’t make UBI a bad idea.

On Thursday, Noah Smith responded to pushback on his response to the OpenResearch paper.

A number of people told me — often in angry, indignant terms — that paying people to take leisure is the whole point of basic income, and is a good and desirable thing.
Noah Smith | Yes, we still have to work

Some of that pushback came from me.

I am honored to be featured as a reply guy on Noah Smith’s blog, but I am neither angry nor indignant. I’m just doing my best to educate and inform within the limited space constraints of a tweet.

In an efficient labor market, we neither under- nor over-incentivize work. We can calibrate the UBI to get the incentives right. The economy needs some amount of paid work, but how much? We can find out by calibrating the UBI.

Although Graeber doesn’t support his argument very well — his list of “bullshit” jobs includes such obviously useful things as pizza delivery, dog washing, and corporate law — the notion that a large percentage of jobs could be eliminated without reducing real economic value appealed to a lot of people.
Noah Smith | Yes, we still have to work

I agree with Noah Smith that David Graeber is not the voice to listen to. The distortion of the labor market is not something we can map onto specific jobs. We know we can eliminate jobs without reducing real economic value because we’re currently creating jobs without generating real economic value.

I admit that I’m not a scholar of the history of leftist thought, but this feels like a vibe shift compared to the socialists of a century ago. Obviously socialists in the early 20th century wanted workers’ lives to be less back-breaking and toilsome, but “worker” was also an identity that socialists deeply valued and viewed as their core support group.
Noah Smith | Yes, we still have to work

My sense is that the left is still very much oriented around labor and workers. Unfortunately, it will be hard to economize on labor so long as we continue to define our identities in terms of work.

I hope the anti-work vibe shift is real.