Primer of a Wrong Basic Income Trial

A few days ago an announcement was made from the Silicon Valley; they are supposedly conducting a trial of “Basic Income” in California. The article says the pilot program “will grant a basic income to 100 Oakland residents for between six months to a year… and that the tentative plan is to give participants between $1,000 and $2,000 a month.” *1

Two many things are wrong with this trial that if I did not know better, I would began this text with a cliché like, “it is so wrong I do not even know where to begin” but I do know where to begin.

Why am I complaining and why am I so “negative”?
Shouldn’t I be happy that someone is doing the study about Basic Income, since I am all for Basic Income?

The most important thing you need to know is that the effects of Basic Income can be studied only if every member of the community is receiving Unconditional Basic Income, as a human right — meaning, it has to be indefinite.

That being said, the first and biggest mistake in the Oakland study is the time limit. The main idea of any similar trial is to study human behaviour, and in order to study human behaviour you have to make sure that those humans would continue behaving as they would usually do in a “normal” — non experimental environment. So, by telling your “specimens” at the beginning how long the experiment will last, you are changing their behaviour even before you have started.

When real Basic Income is given as a right, people can expect that each month, they will get that income, so they do not need to worry about existential needs. Regardless of the circumstances, they know that they do not have to worry. Similar to air, you know that you do not have to pay anyone anything for it. It is there and, in normal everyday circumstances, you do not have to worry that suddenly it will be gone and you will need to find some other source of breathing. When you know you will receive money for just the next 6 months, of course you will not change your job, or make any bold move. You may even spend that money for a 3-week vacation or long overdue house renovation. There is nothing interesting about this. When you know the cash inflow will stop, you plan your life around it.

The second biggest issue is that 100 people were semi-randomly chosen — which is also wrong. For a Basic Income study to work, one entire community has to receive equal amounts of money, as a birth right. You have to know that all the people around you are in the same position and that they do not have to worry about existential needs either. With Basic Income, there is no stick or carrot.

So, the above mentioned trial cannot be a Basic Income trial, by any means, and everyone should stop calling it such. Then, if this is not a Basic Income study, what is it?

A more fitting name for this study might be, “What will people do with additional extra money for which they did not have to work?”

Silicon Valley moguls could have better spent their money, if they organised a study that would find the impact of small lottery winnings on the lives of people. It would have been much quicker, easier and cheaper. They just needed to find those Mega Millions lottery players who got winnings in the range of a “4 + Bonus” where the prize is around $5000. The chances of winning “4+Bonus” are 1 in 739,688. There are about 20+ winners generated for each draw and with 2 draws a week, in one year there is at least 2000 “4 + Bonus” winners. *2

Original photo source: "Day 237 - Losing Ticket" by Iain Watson 

If they collected data for the past 10 years, which is not a long period of time, they would have a pool of 20,000 people. Finally, they would just need to create and conduct a survey and that’s it, job done.

    In contrast, if someone wants to do a proper Basic Income study, they should go with the following guidelines:
  • Find a place/town/community of 100-1000 people where most of the things in that place reflect the current economic situation (e.g. unemployment rate, age distribution, birth rate, quality of life, wealth distribution, etc.) of the entire country.
  • Give every citizen of the community an equal amount that is enough to support just basic needs. Not less and not significantly more than that.
  • Make the test indefinite (for the experiment to work, the “specimen” must have a feeling of indefinite security).
  • In order to avoid baby birth manipulation, the income for every child should be stored in a bank account and no one able to use it, except the child - not parents, not guardians. Once the child comes of age, the compounded amount of money will become available (for buying a home or financing university). In a town of 1000 there will be children of different ages so effects will be noticeable, even after the first year.
  • Avoid interfering with the population’s normal behaviour by constant presence; try to do the study by collecting available data from the police, tax records, banks, health care providers, shops, jobs and other records.

To wrap up, for the love of kittens I cannot understand how such clever people could miss the point of Basic Income by that much. And, if this was yet another media stunt, well, Silicon Valley, you already have all the attention someone could get in the world, this one was completely unnecessary, so cut it out.

We do not need this or any similar studies done improperly — they just lead to wrong overall conclusions and therefore, create an ill favour for all of us.

Notes & References:

1. Basic Income in California: 100 Oakland Residents Will Get a Salary Just for Being Alive

2. Mega Millions