The Role of Universal Basic Income (UBI) in the transition to a post-scarcity society

Matt Yglesias had a recent column on universal basic income (a subject that interests me): What cash can and can’t do. Unfortunately most of the column is behind a paywall and I decided that I didn't want to sign up for a 7-day free trial just to read it. What to do?

I decided to ask Chat-GTP. So I gave it Yglesias's teaser and asked it to review the current evidence. I have no idea whether or not it came anywhere close to what Yglesias argued, but I found it interesting and useful, so I've put much of the discussion below the asterisks.

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What’s the current state of thinking and research on UBI? Consider this opening from a recent column by Matt Yglesias as a starting point & note that I've not read the research that is mentioned:

 

Kelsey Piper wrote an informative piece for The Argument (good magazine, you should subscribe) about a new wave of research on cash transfer programs in the United States. All of this work has generated what I consider to be disappointing findings about the lack of impact of giving poor people money. 

 

I found a lot of the reactions to the article kind of annoying. 

 

On the one (left) hand, some are indignantly snorting that it’s no surprise these cash grants had no impact on the variables of interest — the point, after all, is to make poor people less poor and that’s what they did. Then on the right, you have Charles Lehman and others sort of indignantly snorting that it’s no surprise these cash grants had no impact on the variables of interest — nothing ever works and something called Rossi’s Iron Law says the “expected value of any net impact assessment of any large-scale social program is zero.”

 

I don’t find either of these haughtily unsurprised reactions to be appropriate, because we have a lot of research on cash transfer programs to low-income people in poor countries, and they show much more positive results. This includes evidence of sustained increases in financial assets, improved health, positive spillovers to neighbors, and many other benefits. 

 

That research isn’t brand new and the more negative domestic research that Piper wrote about has also been out for a while now, so among real discourse-heads on universal basic income (U.B.I.), these two contrary facts have already been assimilated. 

 

And the explanation is obvious: Poor people in Kenya are average people who happen to live in an extremely poor country. Basic habits of hard work, diligence, and thrift don’t necessarily pay off in an environment where everybody is so poor that hardly anyone can hire you or pay for anything you make. Dumping cash on people in these circumstances really lets them level-up. By contrast, the domestic poor are — unless they are recently arrived immigrants — often people who, for one reason or another, are struggling to get their lives together in a very wealthy country. If they were thrifty and diligent, they wouldn’t be poor in the first place. Putting money in their pockets doesn’t make them thrifty and diligent, so it doesn’t really alter their lives that much. 

 

That’s all fine. But I do want to emphasize that if the empirical evidence came out the other way, there would be an equally obvious explanation: Kenyans are living in a third world country with weak governance and terrible institutions, so obviously dropping some cash into a village doesn’t change anything — only fundamental reforms will help. The American poor, by contrast, are living in a functional society and just need a little money to get ahead. 

 

It’s obvious! Which is just to say that everything is obvious once you know the answer.

 

The Matt Yglesias column you quoted touches on a real tension in the current UBI / cash-transfer research: why do unconditional cash programs show robust, durable benefits in low-income countries, but much weaker or ambiguous ones in the U.S. and other rich countries? Let me give you a snapshot of the state of play, with context.

 

1. Evidence from low-income countries

• Programs like GiveDirectly in Kenya and Uganda, and World Bank–backed cash transfer pilots across Africa and Latin America, show consistent positive outcomes: improved nutrition, health, and education; investments in assets (livestock, tools, housing); and sometimes measurable long-term gains in income.
• Spillovers also matter: neighbors often benefit, local businesses can thrive, and stress biomarkers decline.
• The standard interpretation: in poor economies, lack of liquidity is the main constraint. A lump sum of cash can unlock a whole trajectory of improvements.

 

2. Evidence from high-income countries

 

• The U.S. (and Canada, Finland, etc.) has seen a wave of pilots since about 2018. These include municipal guaranteed income programs (e.g., Stockton’s SEED), state-level experiments, and philanthropic projects.
• Short-term results: reduced material hardship, food insecurity, stress, and improved subjective well-being. Recipients generally did not quit working.
• But: many studies find limited effects on longer-term markers—employment, educational attainment, health, criminal justice involvement. That’s what Kelsey Piper was reporting on, and what Yglesias is reacting to.
• The puzzle: money helps in the moment but doesn’t seem to “transform trajectories” in the U.S. the way it does in rural Kenya.

 

3. Why the divergence?

 

Scholars suggest several explanations:

• Different baseline conditions: U.S. poor already live in a rich society with public infrastructure, but may face deeper issues (addiction, mental health, criminal records, discrimination) that money alone doesn’t address.
• Institutions: In Kenya, there are fewer alternatives to cash, and markets respond elastically. In the U.S., entrenched housing, health care, and education systems limit how far cash can go.
• Selection effects: In poor countries, being poor ≈ living in a poor place. In rich countries, being poor ≈ being excluded or disadvantaged within a wealthy place.
• Duration and scale: Most U.S. pilots are small, short, and philanthropic. They don’t change the larger ecosystem (housing, wages, healthcare). Some argue a true UBI would have different effects.

 

4. Current frontier of research

• Meta-analyses: The Abhijit Banerjee & Esther Duflo development-econ school emphasizes that context matters: cash transfers are powerful but not a “magic bullet.”
• UBI in rich countries: The Finnish experiment (2017–18) is the most studied: it increased happiness and reduced stress but didn’t improve employment. Still, many Finnish recipients reported greater freedom and security.
• Guaranteed income pilots in dozens of U.S. cities are still ongoing, with more long-term data to come.
• Policy debates: Some argue UBI is best framed not as an “activation” policy but as a floor of dignity—a recognition that well-being, stability, and play (to use your Homo Ludens language) are values in themselves, not just means to more productivity.

 

5. Where the discourse is now

•  Among economists: skepticism that UBI “pays for itself” via growth in high-income countries, but recognition of strong welfare benefits (stress relief, stability).
• Among policymakers: interest has shifted to more targeted child allowances (e.g., the U.S. 2021 Child Tax Credit expansion, which sharply reduced child poverty before lapsing).
• Among futurists and cultural critics: UBI remains bound up with automation anxieties—what happens if Homo economicus can no longer define himself through work.

 

In short

• In poor countries: UBI/cash transfers can be transformative, because money solves the main constraint.
• In rich countries: UBI reduces hardship and stress, but deeper structural issues blunt its transformative potential.
• Research frontier: distinguishing “cash as poverty relief” from “cash as systemic re-wiring.” The former works everywhere. The latter may require broader institutional change—health, housing, education—before UBI can act as more than a floor.

 

Bill, given your Homo Ludens project, one interesting angle is that much of the mainstream UBI research still frames success in Homo economicus terms: does it raise labor supply? education? productivity? The findings look “disappointing” in that light. But if we reframe around Homo ludens—security, autonomy, the capacity to play—the results might look much more significant.

 

Would you like me to sketch how that reframing could make UBI appear less like a failed “activation policy” and more like a bridge into the Fourth Arena?

 

Yes, that would be useful.

The duplicity of rich AI bros

Andreessen says AI will take almost all jobs but his. OAI high-ups want to build bunkers to hide from ASI. AI CEOs praise UBI while ensuring they'll be trillionaires when AGI comes. AI bros exclude themselves from AI's impact. Makes you wonder if they believe the utopia they sell

— Dagan Shani (@daganshani1) May 20, 2025

Martha [Media Notes 153] – Watch it, it’s important.

I never paid all that much attention to Martha Stewart. I suppose I had a slightly negative impression, with little investment in it. And that led me to join the general pile-on that happened when she got caught in doing insider trading and subsequently sentenced to a few months in prison. I have vague memories of reading somewhere, or seeing on TV, that she did her time well, was helpful to and liked by her fellow inmates. Thus I had little interest in watching the new Netflix documentary, Martha.

Then Alex Tabarrok, at Marginal Revolution, wrote a post about it: “Stewart is as compelling a figure as Steve Jobs or Elon Musk. Not entirely likable, perhaps, but undeniably admirable.” So I watched it: “I agree, well worth watching. Though she does seem rather tightly wound during the interview segments, and not just the segments devoted to her husband’s affairs.” A section near the end of the documentary, about her participation in a roast of Justin Bieber and subsequent partnership with Snoop Dogg, that’s pure joy.

Concerning the insider trading charge, Tabarrok observes:

Stewart’s willpower and perfectionism are extraordinary. She becomes the U.S.’s first self-made female billionaire after taking her company public in 1999. Then comes the insider trading case. The amount in question was trivial—she avoided a $45,673 loss by selling her ImClone stock early. Stewart was not an ImClone insider and not guilty of insider trading. However, in a convoluted legal twist, she was charged with attempting to manipulate her own company’s stock price by publicly denying wrongdoing in the ImClone matter. Ultimately, she was convicted of lying to the SEC. It’s worth a slap on the wrist but the lead prosecutor is none other than the sanctimonious James Comey (!) and she gets 5 months in prison.

Beyond that, as I posted over at Marginal Revolution, I think she’s especially important in this age of AI and low-intellectual-threshold AI hype. She took what was and still is widely regarded as routine women’s domestic work and elevated it to, if not at art form, certainly a suite of craft skills with significant depth. She took special pride in her gardens. I know Tyler Cowen (at Marginal Revolution) has spoken of gardener as a job that challenges the limits of AI tech. It involves a wide range of physical, motor and perceptual, and cognitive skills. Is there anyone bench-marking their almost-to-AGI engines against gardening skills?

What about cooking and baking? Good cooks taste as they go along. How’s things going with the AI of taste? I assume that someone, somewhere, has been working on this. But I doubt that it’s very high on OpenAI’s to-do list. What about baking? Making good pie crust requires a deft touch. Puff paste? And then there’s Danish pastry. My mother’s was superb. I would be surprised if I could find its match at a good New York restaurant or bakery, nor would I be surprised if many are not up to her standard.

OTOH, one of the early computer prototypes was important in weaving, the Jacquard loom, which goes back to the early 19th century. That’s where punched cards originated. There's a connection to conjure with, Martha Stewart and the Jacquard loom. 

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ADDENDUM: Come to think of it, if and when UBI (universal basic income) arrives, lots of people will have time on their hands they don't know what to do with. Martha Stewart will be able to teach them how to fill that time in a fulfilling way. May gardens abound!

Two books on universal basic income (UBI)

Robert Reich reviews two books in the NYTimes:

Annie Lowrey, GIVE PEOPLE MONEY, How a Universal Basic Income Would End Poverty, Revolutionize Work, and Remake the World, 263 pp. Crown. $26.

Andrew Yang, THE WAR ON NORMAL PEOPLE: The Truth About America’s Disappearing Jobs and Why Universal Basic Income Is Our Future, 284 pp. Hachette Books. $28.

From the review:

The two books cover so much of the same terrain that I’m tempted to wonder whether they were written by the same robot, programmed for slightly different levels of giddy enthusiasm. Both cite Martin Luther King Jr., Richard Nixon and Milton Friedman as early supporters of a U.B.I. Both urge that a U.B.I. be set at $1,000 a month for every American. Both point out that with poverty currently defined as an income for a single adult of less than $12,000 a year, such a U.B.I. would, by definition, eliminate poverty for the 41 million Americans now living below the poverty line. It would also improve the bargaining power of millions of low-wage workers — forcing employers to increase wages, add benefits and improve conditions in order to retain them. If a U.B.I. replaced specific programs for the poor, it would also reduce government bureaucracy, minimize government interference in citizens’ lives and allow people to avoid the stigma that often accompanies government assistance. By virtue of being available to all, a U.B.I. would not only guarantee the material existence of everyone in a society; it would establish a baseline for what membership in that society means.

U.B.I.’s critics understandably worry that it would spur millions to drop out of the labor force, induce laziness or at least rob people of the structure and meaning work provides. Both Yang and Lowrey muster substantial research to rebut these claims. I’m not sure they need it. After all, $12,000 a year doesn’t deliver a comfortable life even in the lowest-cost precincts of America, so there would still be plenty of incentive to work. Most of today’s jobs provide very little by way of fulfillment or creativity anyway.

A U.B.I. might give recipients a bit more time to pursue socially beneficial activities, like helping the elderly or attending to kids with special needs or perhaps even starting a new business. Yang suggests it would spur a system of “social credits” in which people trade their spare time by performing various helpful tasks for one another. (I.R.S. be warned.) Surely a U.B.I. would help compensate many people — especially women — for the unpaid labor they already contribute. As Lowrey points out, some 40 million family caregivers in America provide half a trillion dollars of unpaid adult care annually. Child care has become so expensive that one of every three stay-at-home mothers today lives below the poverty line (compared with 14 percent in 1970). [...]

Whatever the source of funds, it seems a safe bet that increased automation will allow the economy to continue to grow, making a U.B.I. more affordable. A U.B.I. would itself generate more consumer spending, stimulating additional economic activity. And less poverty would mean less crime, incarceration and other social costs associated with deprivation.

Eric Weinstein sees the need for hypercapitalism linked with hypersocialism

Sean Illing interviews Eric Weinstein (who, incidentally, coined the term the "intellectual dark web") in Vox. From the introduction:

Weinstein’s thinking reflects a growing awareness in Silicon Valley of the challenges faced by capitalist society. Technology will continue to upend careers, workers across fields will be increasingly displaced, and it’s likely that many jobs lost will not be replaced.

Hence many technologists and entrepreneurs in Silicon Valley are converging on ideas like universal basic income as a way to mitigate the adverse effects of technological innovation.

On capitalism and socialism:

Sean Illing

Let's talk about that. What does a hybrid of capitalism and socialism look like?

Eric Weinstein

I don't think we know what it looks like. I believe capitalism will need to be much more unfettered. Certain fields will need to undergo a process of radical deregulation in order to give the minority of minds that are capable of our greatest feats of creation the leeway to experiment and to play, as they deliver us the wonders on which our future economy will be based.

By the same token, we have to understand that our population is not a collection of workers to be input to the machine of capitalism, but rather a nation of souls whose dignity, well-being, and health must be considered on independent, humanitarian terms. Now, that does not mean we can afford to indulge in national welfare of a kind that would rob our most vulnerable of a dignity that has previously been supplied by the workplace.

People will have to be engaged in socially positive activities, but not all of those socially positive activities may be able to command a sufficient share of the market to consume at an appropriate level, and so I think we're going to have to augment the hypercapitalism which will provide the growth of the hypersocialism based on both dignity and need.

Sean Illing

I agree with most of that, but I’m not sure we’re prepared to adapt to these new circumstances quickly enough to matter. What you’re describing is a near-revolutionary shift in politics and culture, and that’s not something we can do on command.

Eric Weinstein

I believe that once our top creative class is unshackled from those impediments which are socially negative, they will be able to choose whether capitalism proceeds by evolution or revolution, and I am hopeful that the enlightened self-interest of the billionaire class will cause them to take the enlightened path toward finding a rethinking of work that honors the vast majority of fellow citizens and humans on which their country depends.

Symposium on Universal Basic Income (UBI)

Appearing in the Boston Review, discussion took place back in 2000. Philippe Van Parijs makes the opening statement and then replies to comments on it. Here's the first few paragraphs of that statement:

Entering the new millennium, I submit for discussion a proposal for the improvement of the human condition: namely, that everyone should be paid a universal basic income (UBI), at a level sufficient for subsistence.

In a world in which a child under five dies of malnutrition every two seconds, and close to a third of the planet’s population lives in a state of "extreme poverty" that often proves fatal, the global enactment of such a basic income proposal may seem wildly utopian. Readers may suspect it to be impossible even in the wealthiest of OECD nations.

Yet, in those nations, productivity, wealth, and national incomes have advanced sufficiently far to support an adequate UBI. And if enacted, a basic income would serve as a powerful instrument of social justice: it would promote real freedom for all by providing the material resources that people need to pursue their aims. At the same time, it would help to solve the policy dilemmas of poverty and unemployment, and serve ideals associated with both the feminist and green movements. So I will argue.

I am convinced, along with many others in Europe, that–far from being utopian–a UBI makes common sense in the current context of the European Union.

Responses by: Herbert A. Simon, Emma Rothschild, Brian Barry, Anne L. Alstott, Fred Block, Katherine McFate, Gar Alperovitz, William A. Galston, Wade Rathke, Edmund S. Phelps, Elizabeth Anderson, Ronald Dore, Robert E. Goodin, Peter Edelman, Claus Offe.