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Musings Report 2018-28 7-14-18 The Cognitive Obstacles to Changing Our Minds (about Universal Basic Income)
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The Cognitive Obstacles to Changing Our Minds (about Universal Basic Income)
As you know, I've spent the past three years focusing on Universal Basic Income (UBI), the nature of work and all of the human needs (for meaningful social roles and purpose, to be needed, to be part of something larger than ourselves, etc.) that UBI doesn't address.
As a generality, I encounter the sort of cognitive obstacles that characterize the anti-science movements.
Characterizing UBI supporters as equivalent to anti-science folks may surprise you, but it goes to show how easy it is to fall prey to the three primary cognitive obstacles to accepting data-based evidence that runs counter to our beliefs:
1. Shortcuts: accepting the opinions of authorities or the group consensus over intensive independent analysis.
2. Confirmation Bias: we accept data that supports our belief system and reject or marginalize data that challenges our beliefs.
3. Social Goals: we seek the approval of our peers and resist the high costs of conflict or ostracism.
These are further explained in a Scientific American article in the July issue, "The Science of Anti-Science Thinking."
When it comes to Universal Basic Income (UBI), it's astonishing that so many people embrace this idea as the "solution" to automation and income inequality with so little data backing it up.
Would any scientist embrace a vast public policy that will impact every individual and household based on a handful of limited experiments?
Is it prudent to embrace policies for hundreds of millions of people based on studies of a few thousand people?
Common sense tells us that the macro-economic effects of giving a few thousand people monthly stipends of cash are nil due to the small sample size and small sum being distributed, but what about the macro-economic effects of trillions of dollars of transfers to the entire populace of 325 million people?
How do we model such a massive set of inputs and outputs?
What's remarkable is the lack of caution of UBI proponents and their disavowal of data that undermines their belief that UBI is the best possible solution available.
UBI is certainly a shortcut, and there's no shortage of authorities that support it. In liberal circles, accepting UBI virtue-signals "I'm a loyal liberal," i.e. I'm a member of the group.
Confirmation bias is also evident in the arguments presented to me in favor of UBI: advocates inevitably list the positive results from various studies and never mention the pitfalls or data that questions the validity of the UBI model.
As for social goals: broadly speaking, supporting central state policies that redistribute income is the Status Quo "progressive" view, and rejecting that faith brings the risk of ostracism, which scientific evidence tells us is closerly related to physical pain.
I would add a fourth cognitive obstacle: we prefer an intellectually easy solution to complex problems. UBI is a very simple solution to a complex set of intertwined problems.
The core claim of UBI is that all people need is a modest guaranteed income to fulfill their potential and become happy. My view is this is an article of faith based on its simplicity, not on its efficacy. The social science literature is quite persuasive that humans need much more than the material basics and the security of a guaranteed income.
UBI advocates assume the current socio-economic system provides all of these other needs with no extra effort required. In my view, this is clearly false: the social and economic structures to serve the deeper needs of people and communities simply don't exist or are systemically inadequate.
UBI is appealing because it's simple to advocate, simple in theory (who wouldn't feel more secure with a guaranteed $1,000 a month coming in?) and presumably simple in application: just use the existing system to cut every individual a check.
Advocating UBI also generates a positive virtue signal to peers and ourselves: I'm a good person for wanting to share our economy's wealth and for wanting to ease the suffering of the economically insecure/poor.
But will it work as intended? Remarkably, few if any advocates tackle the thorny macro-issues such as the potentially inflationary consequences of injecting large blocks of new currency into a stagnant economy, or the consequences of increasing government borrowing to fund UBI. Such concerns are dismissed with little to no data-based analysis.
A fifth dynamic of UBI's appeal is that no sacrifice is required: UBI proposals call for funneling existing social-welfare funding into UBI, and "taxing the rich" (never us, of course-- it's always the super-rich who will pay more, even though the super-rich have the political power to evade such levies).
But the reality is that an additional $1+ trillion will have to be borrowed annually to fund even a hybrid UBI, and advocates are silent on the consequences of this borrowing.
Lastly, read John Hussman's explanation of why the "wealth" that UBI supporters reckon can easily be redistributed is entirely phantom:
Hallmark of an Economic Ponzi Scheme.
I have yet to find any UBI advocates who are willing to accept the data presented by Hussman because it undermines the entire premise of UBI. This is a clear example of wishful thinking and recency bias: because we've been able to generate "growth" and "wealth" since 2009, we'll always be able to generate the "growth" and "wealth" needed to fund UBI.
Is UBI the solution its supporters claim? Perhaps, but there isn't enough data to support the scale and confidence of the claim. We should be wary of any large-scale public policy "solution" that is based on virtue-signaling and confirmation bias rather than data-based evidence.
We all want solutions to income insecurity / entrenched poverty and rising wealth-income inequality, but we need to do the work of understanding the problems and complex human needs before embracing a simplistic, faith-based one-program-fixes-everything solution.
It would be very easy to signal my own virtue and embrace UBI without any analysis, but that's not why you support my work: you seek real solutions, and the bar for those is high.
Highlights of the Blog This Past Week
Big Pharma and the Rise of Gangster Capitalism (7/13/18)
A medication that's been in use for 68 years went from $40 a dose in 2001 to $38,892 today.
The USA Is Now a 3rd World Nation (7/9/18) -- 170,000 views on Zero Hedge and 30,000 on my servers...
Best Thing That Happened To Me This Week
Friends and relatives dropped by an abundance of bananas which we turned into banana bread, which is more like cake than bread. I suspect the secrets of the recipe are using butter rather than oil (as so many recipes call for),adding a half-cup of apple sauce and a half-cup of fresh-grated coconut from our coconut palm trees.
Market Musings: Am I the Only One Who Sees a Big Bear Flag?
The typical technical analysis sees an uptrend that will inevitably lead to new highs in the S&P 500 (SPX) and other stock market indices as the NASDAQ 100, powered by the FANG stocks, lofts ever higher.
Am I the only one who sees a giant Bear Flag? Apparently so.
Also worth noting is the series of rising wedges that have characterized this advance with the larger structure of the Bear Flag.
Bear Flags reliably break down (i.e. big declines) and so the participants' overwhelming confidence that this advance is unstoppable becomes part of the contrarian set-up: when everyone is on the same side of the trade, the boat eventually tips over.
From Left Field
Inside China’s Dystopian Dreams: A.I., Shame and Lots of Cameras -- "The goal is algorithmic governance," he added.
On why our pathogenic credit creation system creates pathogenic disconnected and addicted selves-- interesting analysis...
Does Capitalism Destroy Cooperation? -- it boosts cooperation in healthy versions of capitalism...
How did Tchaikovsky die? Drinking unboiled tap water was suicidal...
'This waterfront needs a highway': the huge mistakes cities keep making (via Joel M.)
Sarcophagus Found. Contents Unknown. (‘No Guessing, Please.)
What Inflation Means to You: Inside the Consumer Price Index -- healthcare is 8.6% of CPI and 18% of GDP--go figure...
COFFEE BREAK – TIME TO INVEST IN SOFT COMMODITIES
But Who Pays the Price of All This Inflation? -- wage earners--but you knew that...
Hallmark of an Economic Ponzi Scheme -- Hussman nails it again....
Third World America-- another perspective...
Employers will do almost anything to find workers to fill jobs — except pay them more (via LaserLefty) -- this doesn't stress the reality that employers are paying higher benefit costs due to the soaring price of healthcare insurance, workers compensation, etc. Employers are paying more but employees aren't getting the extra compensation...
At a storied Chinatown bakery, four generations labor to learn lessons of family-- this worries me, as I see the same dynamic; the nation's shopkeepers are retiring and nobody else wants to work that hard for such high risks and modest pay....
"Pain and suffering are always inevitable for a large intelligence and a deep heart." Fyodor Dostoevsky
Thanks for reading--
charles |
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