Are state subsidised jobs just UBI with extra steps? \ stacker news ~econ

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Are state subsidised jobs just UBI with extra steps?

616 sats \ 33 comments \ @stack_harder 7 Jan econ

I was thinking about this a bit and really, how are they much different?

when a gov creates these jobs and uses fiat to fund them, it's basically just using tax payer money to have people go to work to collect that money.

if they paid out UBI, you've just bypassed a step.

I don't know, in either case, it's the tax base and faith printer that foots the bill. i suppose the advantage of creating a job is that people feel more useful maybe when they have a job and paycheck, but I don't know. maybe if they could collect ubi they would start being able to explore their creative sides and find something meaningful, although i imagine it would create an epic slug class that would probably still be unhappy.

what do you guys think?

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136 sats \ 0 replies \ @stack_harder OP 16h

i wanted to quickly add here a thanks to @Undisciplined, @denlillaapan, @charonnakamoto and @charonnakamoto for fleshing out this topic.

@itsrealfake also gave me some food for thought saying: if the government is going to be in the business of "helping the people", the only safe/reasonable way to do that is to give all the people the same help, and let the people decide how to use it.

I had been thinking about benefit abuse recently wondering why the gov doesn't just limit it to food or clothes or whatever, make a coupon, to stop most of the flagrant abuse (or program a cbdc and control it that way, Orwellian, i know).

But this is a good point that I hadn't thought of, and I didn't think of the analogy to the government creating distortions like subsidies.

so yeah, as usual, the interesting stuff always happens when I've logged off for the evening!

383 sats \ 13 replies \ @denlillaapan 7 Jan

Yes.

The question is if the gov-subsidized jobs are value-adding in some sense, or purely destructive.

The steelman argument in favor of such jobs would be a combination of a) it's better for the soul and social stigma/purpose-feeling of a person to do something than to merely receive benefits, and b) these "jobs" are socially valuable but the market doesn't support them so they wouldn't be done on profit-maximizing activities alone. (= while loss-making, this way the rest of society get some non-monetary benefits.)

I've thought about this a bit in my small village.

The municipality runs (is forced to run by national law, I believe) a library,
it's staffed by one ~60-year-old lady, for 4 hours a day.
There's almost never anybody there: The lady spends her time saying "hi," "welcome," "nice to see you," and " bye" to scant visitors or the few townspeople showing up now and again... and then watches YouTube videos or reads the newspaper (which she could have/would have done on a UBI from the comforts of her home).

I've rationalized this system as follows: This lady is unemployable, has no skills, and in the absence of a public library (that most certainly doesn't cover its cost) would just have been unemployed--and thus financed by the Nordic welfare state anyway.

At least now the rest of us get an open library to pop into now and again.

It's like UBI, with an extra step (wasting her time; or, put differently, engaging her minimally), that produces a nice, feel-good, respectable establishment in town, an establishment that stays open all year.

Tl;dr: productively speaking, this is just wasteful. Practically speaking, given that welfare states care for those unable to produce enough value in the marketplace to warrant employment, it's a pretty harmless solution

56 sats \ 3 replies \ @stack_harder OP 7 Jan

interesting, i suppose it depends on the job, as you say, it's just usually when the government creates a job, like gender awareness officer or something, it;'s often a total waste and a slap in the face.

things that provide some use to the public though, spaces, kindergartens etc would be an example of good use of tax revenue

how is the issue of welfare in Norway in general, do you often hear cases of abuse since it's quite generous, or would you say it's on par with other Eu countries ?

28 sats \ 0 replies \ @denlillaapan 7 Jan

Yeah, there are degrees in hell--that's for sure.

Can't speak to Norway (I'm not there...) but yes, the Nordics are all pretty generous--both in terms of how much unemployment they pay and for how long.

92 sats \ 1 reply \ @Undisciplined 7 Jan

I think there are two important thresholds of productivity here that create three distinct classes of government worker.

Those thresholds are productivity > cost and productivity < 0.

In the rare (perhaps mythical) cases that government workers produce more than they cost, these are just useful jobs that are being done by the government. They'd probably be done better on the market, but they aren't any sort of welfare.

In many cases, government jobs actually do things that make everyone else poorer, on top of the impoverishment of paying for them. These counterproductive jobs may give the employee a sense of purpose, but they're worse than UBI for the rest of us (assuming that people on UBI don't just become criminals).

Then, there's the in-between cases. Government jobs that provide positive value, but less than their cost. I think that's what the little old lady staffing the library is. Those jobs are at least debatably better than a UBI.

41 sats \ 0 replies \ @denlillaapan 7 Jan

yes, wonderful breakdown.

As usual, Undisciplined explains things more succinctly than I ever could. THANKS!

62 sats \ 8 replies \ @charonnakamoto 7 Jan

Practically speaking, given that welfare states care for those unable to produce enough value in the marketplace to warrant employment, it's a pretty harmless solution

I would argue that there is no such thing as harmless government interventions. Each job adds up, and the taxpayer(you and I) ultimately pays for it. State-subsidized jobs create artificial market distortions and malinvestment by directing resources to non-market-determined ends. The government cannot efficiently allocate resources or determine what jobs are needed. Though I agree with @stack_harder, this seems like UBI with extra steps. UBI represents institutionalized theft through taxation and would lead to an inflationary environment like what happened after Covid QE in the US. So, I am not sure it makes it okay to justify it through the lens of UBI. Having said this, I am not sure what will happen to those displaced by AI and LLM in the future. I guess, they must find a way to be productive in a way that is out of reach of LLM/ML models.

9 sats \ 3 replies \ @stack_harder OP 16h

i've been replaced or reduced by AI a few times, through translation and copywriting jobs and it's not pleasant.

but, i must say, even before chatgpt, i was losing work to geo-arbitrage anyway, which also sucks.

but i think you are also right that most people will have to have jobs that can't be replaced yet, aka builder traders, OF, or being a hairdresser lol

14 sats \ 2 replies \ @charonnakamoto 16h

I am sorry about being replaced by AI or geo-arbitrage. I’ll have to consider working in the ‘atoms’ world instead of the ‘bits’ world. Once Blue-collar folks start snubbing white-collar ones in the AGI world, that will be a sight to behold

0 sats \ 1 reply \ @stack_harder OP 16h

the snubbing has begun lol, the office class have been getting squeezed and downsized for a while now too. but fortunately we have bitcoin , would be very scary without it

0 sats \ 0 replies \ @charonnakamoto 16h

The sense of impending doom was a daily occurrence in the back of my mind when I didn't think much about retirement and had not figured out Bitcoin. Now, having welcomed BTC into my life, not so much.

0 sats \ 3 replies \ @denlillaapan 7 Jan

all agreed, sir, but I was arguing withing a public system that already guarantees a certain threshold. The gov intervention is already there, so at the margin it might as well be worth it having the lady staff the library than having her go on welfare.

Basically: there's no crowding out resources and there's no opportunity cost, since lady isn't employable elsewhere and in the absence of working at library would just be on welfare

14 sats \ 2 replies \ @charonnakamoto 15h

there’s no opportunity cost

Why do you say there’s no opportunity cost? When you think about it from the perspective of the one who pays her salary- her salary could have been provided to an additional healthcare worker, sanitation worker, library janitor, or security guard.

Ideally, you'd expect her to have saved enough in her lifetime to provide for her retirement. So, she doesn't ‘need’ the work. But since money is broken and debased, she is (hypothetically) forced to earn even at that age.

87 sats \ 1 reply \ @charonnakamoto 15h

But yes, if she would have received $X from welfare and now she received $X from working this job, then it makes sense there's no opportunity cost. The government shells out no matter the outcome here. I guess I'm making an argument against the welfare state in the first place then, haha

9 sats \ 0 replies \ @denlillaapan 14h

yes, precisely. This is the interpretation I'm taking here: conditional on welfare state, gov gotta fork out $X anyway; might as well get something for it

This is also how I see UBI; conditional on gov supporting the population (taking care of base needs/starving on the streets-type poverty), it's better to have a fixed, equal, transparent amount to everyone (UBI) than a means-tested, corrupt/bureaucratic hoopla

14 sats \ 10 replies \ @itsrealfake 7 Jan

UBI is "universal"

Jobs are conditional.

Jobs occupy the mindspace of the job performers.

UBI keeps people fed, and helps keep children unstressed by parents with jobs they hate.

UBI is different. This is discussed in "Road to Serfdom".

92 sats \ 9 replies \ @charonnakamoto 7 Jan

Please help me understand how UBI will keep people fed. When everyone gets UBI money, they chase after the same tangible goods and services. Will that not make everything much more expensive, bringing everyone back to square one? As @denlillaapan points out in #811381, money is the intermediary between production and consumption and a signal to coordinate economic activities. When UBI takes place, it distorts the entire market as you can earn money without producing, and we end up no better than when we started. PS: I am also learning on this topic and would appreciate it if any of my premises are misguided.

0 sats \ 8 replies \ @itsrealfake 7 Jan

you're correctly identifying the zero-sum nature of UBI's monetary policy. You're not estimating the impacts on the market in the way that the UBI argument has been presented to me. I could be wrong, but i think UBI is the only safe/reasonable way for the government to be in the business of "helping the people"

you're incorrect that all individuals chase after the same goods. in UBI, Elon and a person living under a freeway get the same Basic Income. Elon's not chasing after the same goods as the guy under the freeway.

The argument put forth in Road to Serfdom is worth exploring in detail, by reading the book. I'll summarize to the best of my ability...

the government has no business making a specific judgement about who gets what handouts. giving government that authority necessarily results in market distortion (see farm subsidies, housing subsidies, etc...). When the money is delivered uniformly, universally, the market is not distorted by bureaucrats making decisions. instead, the market participants are all given a relief, and the ability to use that relief in the way they think is best; thus, the market is still guided by the aggregate decision making.

so again:

if the government is going to be in the business of "helping the people", the only safe/reasonable way to do that is to give all the people the same help, and let the people decide how to use it.
because a market is an aggregate of all participant decisions, and all participants are still making their decisions based on their understanding of their needs (i.e. not the government deciding for them), UBI doesn't distort in a dangerous way.
to the extent that UBI could be used as a punishment, by bureaucrats (as in UBI is not provided to people who don't get the vaccine, or go to church, or etc...), it will not be UBI, and it would be dangerous to introduce

edit to add:

i sometimes think of money as a lubricant in an engine. participants are parts in the engine. we all need lubrication. in our case, the engine has evolved iteratively over history, and has flaws. when there's friction in the engine, people experience that as wear and tear. UBI is an oil pump that distributes oil evenly. Foodstamps allow bureaucrats to deliver that oil to specific parts of the engine... but the bureaucrats can't know which engine parts really need the lubrication, so they make mistakes (at best) or decisions in the interest of their benefactors (at worst, as in the case of WIC approved sugar-sodas)

1 sat \ 7 replies \ @charonnakamoto 7 Jan

When I said people will chase after the same goods and services, I meant that the total number of tangible goods and services worldwide will not change because people are getting UBI relief. People will chase after food, shelter, clothing, and other Maslow’s hierarchical needs from a finite pool.

You made an interesting point about the government not judging who gets UBI and who doesn't. However, I'm unsure if that's sufficient to rectify the market-wide distortions this free money will generate. Something to ponder about..

0 sats \ 3 replies \ @denlillaapan 7 Jan

if nobody produces anything (i.e., everyone "living off" UBI), then of course we're getting nowhere--worse, really, we're all impoverished because the relative price of everything goes sky high: lots of consumers, no producers.

The idea with UBI is that it's a more efficient way to distribute social services (bc recipient just gets money, instead of some bureaucratic hoopla, with rules and regulations, and can just spend that into the economy). In theory the proposals "work" when they're set at low enough a level that most people will continue producing.

A UBI generous enough that it cannibalizes production means, like you say, we all become poor; a UBI low enough means most people keep producing but at the margin (and for the poorest) we cut back.

Whether UBI distorts markets I'm not sure of. If anything, it distorts markets less than government-provided replacements I would think

0 sats \ 2 replies \ @itsrealfake 7 Jan

everyone "living off" UBI

a red herring. this is obviously impossible, and implies zero productive effort of any individual, which presumes that the UBI is somehow distributed with no human involvement, then the money is spent with no human involvement.

Whether UBI distorts markets I'm not sure of.

Every monetary action impacts The Market. Whether an impact is a distortion sounds like a value judgement.

0 sats \ 1 reply \ @denlillaapan 7 Jan

nah, "distortion" has a pretty non-judgy meaning in economics

92 sats \ 0 replies \ @itsrealfake 7 Jan

then there should be no question about whether UBI would distort a market.

reply on another page

0 sats \ 1 reply \ @itsrealfake 7 Jan

the total number of tangible goods and services worldwide will not change because people are getting UBI relief.

i specifically want to challenge this assertion. if it's true that redistribution can have an impact, then it would very likely be the case that the total number of goods and services would be increased by whatever help was applied (be that UBI, or some other undiscussed form of "help"). e.g. government doesn't intervene in markets to reduce the availability of goods and services... that's usually an accident (at best) or when it's intentionally reducing the availability that's evil (because it's screwing up the Greater Good in favor of some well connected person's benefit).

my assertion is that the only help that can help is a UBI (which, evidently is stored in the same place as "guaranteed minimum income" in my connectome). it's probably the case that there are other ways to help, that i'm not thinking of.

0 sats \ 0 replies \ @itsrealfake 7 Jan

i don't actually think that the Greater Good is understandable, for the reasons discussed in that 4 hour argument between Jordan Peterson and Sam Harris.

0 sats \ 0 replies \ @itsrealfake 7 Jan

instead of pondering, you could try studying the text of Road To Serfdom.

edit to add some GPT results:

F.A. Hayek did not argue that Universal Basic Income (UBI) is the only way for the government to be helpful to the poor. In fact, Hayek's views on UBI are not well-documented, and he did not explicitly advocate for it in his work.

However, Hayek did discuss the concept of a guaranteed minimum income in his 1944 book "The Road to Serfdom." In the book, Hayek argued that a guaranteed minimum income could be a more effective and less intrusive way to alleviate poverty than other forms of government intervention, such as price controls and subsidies.

Hayek's main concern was that government intervention in the economy often leads to unintended consequences, such as inefficiencies, corruption, and the erosion of individual freedom. He argued that a guaranteed minimum income could be a more targeted and efficient way to support the poor, as it would provide a safety net without distorting market prices or interfering with individual choices.

Regarding other means of support, Hayek was critical of government programs that he believed would lead to a slippery slope towards socialism and totalitarianism. He argued that government control of the economy, such as through price controls, rationing, and subsidies, would inevitably lead to a loss of individual freedom and a decline in economic efficiency.

Some of the specific arguments Hayek made against other means of support include:

Price controls: Hayek argued that price controls would lead to shortages, black markets, and corruption, as people would find ways to circumvent the controls.
Subsidies: Hayek believed that subsidies would create dependencies and inefficiencies, as people would rely on the government for support rather than taking responsibility for their own lives.
Government-run industries: Hayek argued that government-run industries would be inefficient and prone to corruption, as they would be shielded from market competition and accountability.

It's worth noting that Hayek's views on poverty and government intervention were shaped by his experiences with the Great Depression and the rise of fascist and socialist regimes in Europe during the 1930s. While he was critical of government intervention, he also recognized the need for some form of social safety net to protect the most vulnerable members of society.

12 sats \ 4 replies \ @Shugard 7 Jan

Since I work for the government as a teacher, I would rather take a UBI check and go home. Those pesky kids can teach themselves and their parents along with them. No need for me to show up.

0 sats \ 3 replies \ @BTCExecutor 7 Jan

private school

50 sats \ 2 replies \ @Shugard 7 Jan

The problem is that where I live, private schools pay less. So I would still take the UBI. But otherwise great idea!

0 sats \ 1 reply \ @itsrealfake 7 Jan

what would you do instead of teaching?

0 sats \ 0 replies \ @Shugard 7 Jan

Spreading my knowledge in different ways. In ways people would value and appreciate. How? I don't know, otherwise I would do it already xD thinking about a podcast but being too afraid with all the technology around it and failing at it.

48 sats \ 1 reply \ @TheBTCManual 7 Jan

Lol not really universal and often not a basic but an income none the less. It's definitely a resource distribution mechanism

Does this person provide a good or service the market needs or wants? No Does the customer purchase from the government because it has a choice? In some instances no Does the service provider have a profit motive tied to their performance? No

I see it as welfare with a few extra hoops

0 sats \ 0 replies \ @denlillaapan 7 Jan

yes