Geohot is a smart dude. But here I think he misses the forest for the trees.
He has a point, certainly. But while he is harping about the U part of ubi, he's completely ignoring the B part. UBI is meant to provide some basic income so people don't starve. It's just an optimization of welfare programs where you have a ton of bureaucracy and make people jump through endless hoops and cause them endless amounts of stress (which is known to make people work less, not more). And replace it by just giving all citizens the same amount.
Yes, that's a bit stupid for the people first paying taxes and then getting them right back again minus overhead costs, but if you think about it: that's what happens now too, only less efficient (in the netherlands, that is) so you pay even more overhead.
On top of that comes the other realization: If the current trend of automating everything continues,we'll ultimately end up with (hyperbole) 1 person owning all the machines doing all the work. That 1 person earning all the money, and (in an ideal case) paying his taxes to give everybody else welfare. Which just is the same as UBI.
In a certain way this already happens now. Most not-too-smart people that used to be gainfully employed as laborer somewhere are now on welfare, and the threshold for not-too-smart could go up rather steeply with the current AI trends.
>Yes, that's a bit stupid for the people first paying taxes and then getting them right back again minus overhead costs, but if you think about it: that's what happens now too, only less efficient (in the netherlands, that is) so you pay even more overhead.
I'm not sure this is stupid. I think the people against the negative income tax system are kind of stupid. Like, the best place to apply the welfare rules is where all other complicated rules about income are made: the tax office (IRS). If you decide that for whatever reason you really really want people receiving welfare to be second class citizens, you'd go out of your way and build a separate welfare office, where all the work the tax office is doing gets to be duplicated for no reason other than so you as a working class citizen can pay even more money to be angry at the second class citizens.
Overall, it sounds kind of stupid. You build a bureaucracy that designates people as a special class, so that this special class is difficult to escape from, since if everyone was a continuous recipient of welfare, there would be no second class and "escape" would merely be progression through the simple passage of time.
The dumbest arguments I've seen are extremely cranky and boil down to rich people becoming net beneficiaries of CO2 dividends, because they spent tens of thousands of dollars on EVs, heat pumps, cycling, insulation, solar panels, etc so they can get 100% of an annual 100€ CO2 dividend. Like, giving 100€ to even a single rich person is such a horrific crime, that it's better if everyone else, who actually needs it, should get less than the 100€ even if that reduction will result in hundreds of millions of € being diverted away from people who actually need the money to compensate their CO2 taxes.
Someone needs to make a website explaining why UBI doesn't work conceptually because this comes up over and over again on HN.
You cannot make UBI work from money saved by removing means testing. Even UBI is a welfare scheme and would require significant bureaucratic hoop jumping to check that a person claiming it isn't:
• Dead
• Non-citizen
• Already claiming it under a different name/bank account/etc
• In prison
• Moved abroad
and so on. All that is expensive, and yet the overheads of even existing welfare systems just aren't high compared to the amounts they pay out. Getting rid of means testing doesn't magically make the numbers balance.
Geohot is correct. UBI seems to only appeal to people who don't understand how the economy works. You can't have an economy in which one person earns all the money by definition.
This is a complete non-issue in basically every wealthy country bar potentially the US, all five things you named are already known to the government at all times. They also apply the exact same way to any other scheme, there's nothing new about it.
Quite a few governments have trouble verifying identity reliably. But to the extent they can do it, it's because there are lots of people employed to do so. The UBI thesis outline above is that you can find the money to pay for it by eliminating all those job roles from the government, so you can't use their existence to justify UBI as affordable.
Even if governments were perfect at ID verification it wouldn't change the argument above, right? Being perfect at verifying UBI eligibility would require a large government infrastructure, just like today, so you can't claim that the U part makes it super cheap to administer.
But no government is close to perfect. Here are some examples for your edification.
The UK doesn't even know how many people are living there, and it's an island. There's no centralized identity scheme and during COVID more people came forward for vaccination in some age bands than theoretically existed at all.
All countries struggle with basics like "is the recipient of the welfare dead". Here's a specific case where Italy didn't notice it should stop paying out a state pension (a form of UBI) for years after death, with the fraudster only getting busted when he tried to dress up as his own mother: https://www.theguardian.com/world/2025/nov/25/italian-man-dr...
Paying out money to dead people is a very common problem. Here's an EU report on all the basic ways countries get defrauded by failing to track basic facts about identities:
"Common fraud and error cases include falsified documents (birth, marriage and death certificates), identity fraud and falsified non-payment certificates"
Even in UBI, there would be a strong expectation that each person only receives it once. But checking stuff like that requires a huge bureaucracy.
>Here's a specific case where Italy didn't notice it should stop paying out a state pension (a form of UBI) for years after death, with the fraudster only getting busted when he tried to dress up as his own mother
I assume you want to stop the state pension as well then?
None of these include a mention of meaningful economic impact.
> Being perfect at verifying UBI eligibility would require a large government infrastructure, just like today, so you can't claim that the U part makes it super cheap to administer.
It's already in place regardless of UBI, so it doesn't add meaningful costs.
Of course it's never going to be perfect, absolutely nothing is. Why even mention that? What matters is the impact of it being imperfect.
Compare it to the impacts of tax evasion, or wage theft, and they'll be completely negligible.
> Even in UBI, there would be a strong expectation that each person only receives it once. But checking stuff like that requires a huge bureaucracy.
Or you issue UBI all at once during the month, and you stamp everyone who receives it with an indelible ink mark that takes longer than a day to wear off; like they do in poor countries to prevent double voting.
It's a solvable problem. The problem is that the "cost of managing welfare" is a small percentage of the cost of welfare, you can't pay for doubling/tripling it by saving 5%.
Most EU countries have national IDs, so the "only receive it once" is a solved problem.
The "still paying dead people" problem exists in the current pension system, so we already have bureaucracy in place to solve that one (yes, it's not 100% accurate, but it works sufficiently well en masse) so no need for new bureaucracy there.
In the UK a lot of that is solved by using the NI number that everyone has to have to work, claim benefits, get a state pension, or pay tax.
For people who are employed it could be done by existing systems already used to calculate tax (which is deducted automatically by employers here so the systems to do calculations exist).
Self-employed people already have to register with HMRC.
For the rest it is a far, far simpler than the requirements of the benefits system and less prone to fraud.
> You cannot make UBI work from money saved by removing means testing.
No one claims it can be made to work using ONLY money saved from means testing. Something like removing means tested benefits together with lowering tax thresholds could work though.
Except a lot of actual, very smart, economists are for UBI or similar arrangements (it's not a settled matter). And geohot might be smart, but he's just a self described hacker.
I think the problem is that a lot of the proponents are arguing for a level of UBI that is pretty close to the median wage whereas what would be affordable is probably a quarter of that.
I'll come out and get kicked out of communism club to say that I don't support UBI on the basic fact that money is exchanged for goods and services is just so foundational that I can't support UBI. I think everybody should have a roof over their heads and 3 square meals a day, but UBI isn't the way to get there.
Welfare is a direct payment to the poor and SNAP is very close to that. Work requirements and other administrative hurdles are the primary thing that keeps these programs from truly ensuring that everybody has basic dignity.
> money is exchanged for goods and services is just so foundational
it is in all large societies. That's true. But it is not in most small primitive societies. SO it's not like a law of nature, but more that we haven't found a system that works as well for large groups.
The trouble is that capitalism also has it's problems, and they're getting exacerbated by technological advancements. If you automate everything at a certain point there's just nothing to do for a large part of the population. And at that point the system stops working.
In science fiction we would get the 'post scarcity society', but nobody knows how that should work.
The UBI systems I've seen proposed that just might work are a sort of golden middle between those two. Not that different from the current welfare system we have in NL, but taking out the stress factor and stigma of receiving welfare.
The exchange of money for goods and services is foundational to capitalism, and UBI seems like a divide by zero kind of trick that's isn't going to work out. Let's fire a bunch of people to make the government more efficient with this one neat trick is just the most Republican thing ever.
Astroturfing? If I don't have an alternative, I'm secretly being paid by "them" to tear down UBI? Who would "them" even be? How would that even work?
Anyway, subsidized jobs programs is my answer. Pay people to do jobs. Plant trees! There's so many places that could use some reforesting. There's no shortage of work to do.
The idea you're suggesting here is 19th century era Marxism, and isn't based on historical or economic realities. There has never been a famine caused by new technologies creating unemployment, and food security is much higher now than at any other time in the past.
> There has never been a famine caused by new technologies creating unemployment
That's a bold statement. And depending on how you define famine it might even be true-ish. But I'm quite certain most poor people in the 1920s would disagree with you.
Which is why we got the russian revolution and both world wards at that time. All 3 were partially caused by 19th century industralisation creating an poor, hungry underclass.
It's not particularly bold, it's just a fact. It only seems bold because our society is still flooded with Marx-era propaganda.
Poor people in 1920 would agree with me. We know this because in this era Marxist ideas were already quite old, well known and widespread. He argued for what was effectively a UBI or very generous welfare system under a different name. He predicted the poor would rise up as capitalism drove their wages to zero and "alienated" them, then they'd overthrow it. But Marx became bitterly disappointed in his lifetime when capitalism didn't fail, wages didn't fall to zero and the working classes rejected his call to revolution.
Technological progress hasn't caused famines, it's ended them. What has caused several famines, though, is left wing people reorganizing society via force to solve imagined problems. If you're worried about people not having enough to eat, you should be terrified of a UBI.
You're misinterpreting what I wrote. I didn't say all famines were caused by left wing policies. Obviously historically most were caused by natural disaster, like the Irish potato blight. But when famines have been caused by social change, it wasn't due to the march of technology.
The British never forced anyone in Ireland to export food "at gunpoint".
> What do you plan to buy with your free government dollars? Want to buy eggs? Sorry, the egg people stopped making eggs, they are living free on UBI. Want to buy a house? Who built it? Nobody, because they all were getting UBI and didn’t want to build houses anymore. They write poems now. There’s still old houses available, but the price for them has 20xed, well outside of what you can afford.
In my country the people that are producing and selling eggs do it almost for free, they could do something else and get much more money, but they choose to do eggs. My theory is that people choose to do stuff not just because of the money. Narrowing all the interests to just money doesn't capture the complex reality. When you cancel the money thing, you let people choose what to do based on their real ambitions and aspirations, removing the alien interest (money) that skews the world so much that even geohotz got confused.
But then you can end up with a lot of people making what's fun to produce but we have an excess of (waste) and few people filling in to make what's missing (scarcity). Markets aren't perfect but they do help us solve that particular problem.
The topical reply is that those positions aren't paying enough.
However, if we have to pay e.g. miners millions to compete with a high UBI, we trigger a massive wage-price spiral. Since extracted raw materials are the bedrock of the entire supply chain, those costs cascade and multiply, eventually making the finished goods unaffordable for the very people receiving the UBI.
In reality, markets don't solve the scarcity of un-fun labor through magic efficiency. They solve it by leveraging debt, poverty, and an exploitable lower class to keep the foundational costs of society artificially low.
Without this DesperationFloor™, the math of our current commodity-based economy falls apart.
> Since extracted raw materials are the bedrock of the entire supply chain
Extracted raw material is incredibly cheap. Human industry and ingenuity are the real scarce resource, and UBI leverages these to an unprecedented extent. Debt and exploitation are an anti-pattern, even for a capitalist economy; they're deeply antithetical to true industry and creativity.
Apparently if we, the poorer ones, win the war of attrition, the problematic ones that own everything will resign to golf. Or something. Getting financial planning from a lottery winner.
> I dream of a day when company valuations halve when I create a GitHub repo. Someday.
Isn't that exactly what Anthropic did to the SaaS sector? Taking the "I can replace you with a very small shell script" line from BOFH lore (except that it was a bunch of SKILLS.md files, not shell scripts) and making it real.
I think it’s a bad idea for about the same reasons, but that’s assuming we’re implementing it right now in the current economy. If automation means that in the future there’s not much for all these people to do that creates value then it makes sense.
Which of course ignores the obvious point that UBI is all about taking existing resource redistribution and making it less costly and more efficient. Practically all Western countries redistribute income on a massive scale (compared to the default outcomes of a completely free market capitalism) in order to ensure everyone can provide for their basic needs, and that could all be gradually replaced by UBI.
This is broadly in line with OP's suggested ethic "create value for others, don't play zero sum games" since capitalism is based on rewarding those who create the most value, whereas zero-sum games are largely political in nature.
The inefficiency of the bureaucracy of limiting welfare (or charity) to the poor and needy. I don't know, though, maybe giving everybody's money to everybody cancels itself out.
You're giving money to everybody but then anyone who isn't poor and needy has to pay taxes on their income that more than offset the money. It's taking "the bureaucracy of limiting welfare (or charity)" and folding it in with the IRS and the local Department of Revenue.
Capitalism rewards those who CAPTURE the most value, not those who create it. Capitalism at its core is a system of expropriating the value of labor by those with capital who themselves create absolutely nothing.
Capital allocation is a serious job with very real consequences. The decision of how many AI datacenters should be built, to take an an unusually topical example, is one of capital allocation. Central planning is not a viable solution, it has failed everywhere it's been tried.
> The real problem to UBI is governments creating income via debt, IMO.
The national debt is just a hidden tax on future generations. You're stealing resources from the future (by selling claims to them in advance, that's what national debt is) and spending them in the present. It's justifiable in extreme cases like a war (or perhaps for massive public investments that can't be funded within the existing budget - which is actually not that common), but really not otherwise.
That's not how that works, because for each unit of debt (loans or negative balances) there is a corresponding unit of credit (bonds or positive balances) in the economy. Hence, mathematically speaking, all debts could be paid off instantly at any point in time.
The reason why the debt keeps growing endlessly is that there is a 0% lower bound on the interest rate, which if you think logically about it, means that debt can only grow, mathematically speaking. This creates the impression that debt is always a future burden that is eternally carried forward as if it was nuclear waste.
If the market interest rate is below zero, either the government and the central bank must intervene to maintain the state of the money system above zero, because that is the only representable state. The government can subsidize the difference between the market interest rate and the money system interest rate clamp by taking on private debt and turning it private. This is particularly evident once private corporations refuse to take on further debt.
However, even if the government stopped the subsidization, you still don't get out of the conundrum. The government is patching the symptom with its cause, which stalls the problem into the future, which is "good" if the cause is considered good and only the symptom is considered bad.
The same way housing is needed for living, money is needed for trading. Similar to housing becoming an investment and therefore no longer being able to be used for its intended purpose, money can face the same fate. When people use money as an investment, it can't be used for trading. Houses sit empty and money sits idle.
It turns out that money is such an integral part of the economy that if there is no money, people can't acquire the goods they need to survive and since there is a monopoly on money systems, you can't just switch to a private provider to perform the trading you need in case the government one fails.
In other words, you either choose between a fully formalized money based economy or subsistence lifestyle with nothing in-between. The difference between the two is so stark, that a failure in the money system might as well be the collapse of all elements of society. From that perspective, it is quite smart to keep kicking the debt can down the road. Meanwhile the person who refuses to kick the can will doom society unless they implement the possibility of negative interest in their money system.
The zero bound on nominal interest rates is not relevant today. (It may be relevant in a deflationary environment where debt or 'safe assets' are essentially needed as a liquidity instrument akin to money, but that all gets hoovered up when interest rates rise.) The U.S. government is paying a whole lot of interest on its national debt bonds not because of a formal constraint, but rather because its bonds would go unsold otherwise, it would be unable to roll over the existing bonds as they expire, and the whole house of cards would collapse. IOW, it's the chickens coming home to roost, and the American taxpayer is paying for it. The alternative is to inflate the debt away by debasing the currency, which is even worse.
I've often thought of state debt as an accruing tax collection deficit. Selling bonds (creating more of this debt) is more politically convenient than raising taxes but it digs a deeper hole and obliges the state to pay interest largely to the same class of people they have failed to tax.
If your business can't self-fund the investment, borrowing is justified. But if you're earning revenue that allows you to self-fund, why borrow? You're just incurring extra costs.
I feel like government borrowing sometimes and government borrowing more and more every year and never paying it down until the end of time or more likely bankruptcy are two different things
As long as you keep new borrowing below growth then you can do that indefinitely. The problem is when the next pandemic (or war) comes along you don't have much room to deal with it.
You can do the same with printing money, as long as you do it below growth you can do it indefinitely.
The problem always is that you can't stop and get off the tiger. No country can withstand the shock of a major cut in spending, because the population can't absorb the hit.
Forget UBI and AI. They are distractions. Today it's very unclear that even just existing welfare schemes are sustainable. Political parties can buy votes with welfare and they do, so it's an unstable configuration. Europe is full of countries with this problem.
A good example of a country in a downward spiral towards UBI hell is the UK. Around 25% of the working-age population now claim to be disabled, and around 10% receive disability benefits. Labour have a genius idea for how to fix this: let disabled people try out employment for a bit to see if they like it, whilst keeping their welfare payments. So they're turning disability benefits into UBI by the back door.
The UK can't afford anything even close to this. It can't even afford the theoretically non-universal benefits schemes it has: it has massive government debt and deficits because its economy doesn't generate enough wealth, and its health welfare system (the NHS) experiences Soviet-style shortages all the time.
This has happened despite that we've been mass automating jobs with computers and robots for decades. Chips aren't magic wands that make communism suddenly work. The problems with wealth redistribution are fundamental and will never go away regardless of your level of technology.
If you disagree, fine, but please for the love of God focus on walking before you can run. Drive government deficits to zero whilst keeping growth at US levels, and then talk about more generous welfare schemes.
(you can't magic new money by eliminating means testing either, see my other comment on this thread).
> The UK can't afford anything even close to this. It can't even afford the theoretically non-universal benefits schemes it has: it has massive government debt and deficits because its economy doesn't generate enough wealth,
I'm fairly certain its economy generates more wealth per capita than at any point in the past, and this is the general consensus. If you believe it doesn't, please explain how, as it goes against the commonly held belief.
Much of that wealth is wasted by excess government spending. Same pattern as India, which actually used to be ruled by the UK as a colony - then they became independent but kept all the excess bureaucracy and red tape from their former oppressors.
I didn't say otherwise. It generates more wealth now than in the past and that is still far from sufficient for its government to afford its current levels of welfare spending.
You did imply it, that in the past the same welfare was affordable that now no longer is, because its economy apparently doesn't generate enough wealth.
The UK doesn't have the same welfare as in the past. It's gives out vastly more money for more reasons than it did when the system was new, and it has a far greater proportion of the population receiving it.
My family household generates more wealth per capita than any time in it's history, but yet net savings is down. Do you know why? We spend it all on junk that we thin we'll make us happy but actually we become dependent on it.
Money is a social construct, not some kind of physical quantity subject to conservation laws, and can be and is introduced into the economic system all the time. The real question is really would introducing more money or a UBI cause social disruption by e.g. disrupting price signalling by high inflation or changing incentives to work so less goods and services that people actually value are produced.
It is a social construct but if you just print money you get ... inflation. You can't just increase money supply to redistribute wealth without consequences.
For me its more his attitude that puts me off.
He might be intelligent, but his EQ doesnt seem that high.
The condescending way he references the "malcolm in the middle"-episode "hot dumb girl" couldve been just the explaination of the "1 dollar = 1 million dollar".
from the same author