Michael Simm is a disruptive systems expert and nonprofit founder focused on fighting homelessness and poverty. He earned his Bachelors in Political Science and Minor in Innovation in Society from ASU’s honors college in under two years. During his time at ASU, he published a peer-reviewed paper about how a Universal Basic Income would brighten the future of our economy and society. Having come to the undeniable conclusion that guaranteed income is the most effective way to fight poverty, he envisioned a nonprofit that could unleash the massive anti-poverty potential of guaranteed income.
In addition, he is a generalist in understanding disruptive policy, technologies, and their implications for the future. He knows a medium amount about most topics in the realms of politics, and finance, and a great deal about renewables, guaranteed income, and complex system analysis.
Michael Simm
Seeking input on Framework for Unconditional UBI Cost-Effectiveness Analysis
This was incredibly powerful, thank you so much for writing this. It made me tear up and that doesn’t happen very often.
While I think there are other ways to donate that could ultimately save & improve lives more cost-effectively than GiveWells’ top charities, the act of giving to help people should be a valued part of any person’s life.
Wishing you & all of the people working to proliferate giving pledges the best.
Thanks Jacob, I definitely appreciate your input too as I am no expert on the production of cellular meat or precision fermentation. I’m generally interested in reducing costs of living & reducing suffering.
That said here are my thoughts on what you said.
I entirely agree that their predictions in this space in the near term have proven inaccurate on the market. However the $2 figure might not be referring to sales costs, but the cost of production in a large state of the art factory.
Basically if an optimized factory was built with the best 2023 technology, could they get the cost of production below $2/Kg?
We’re in complete agreement about their 2023 timeline predictions, they were overly optimistic. What’s important though is if the overall cost curve over the next decade is going to take the shape they’ve predicted (exponential declines versus linear or logarithmic).
With input costs, cows & chickens are inefficient machines that require massive amounts of (water especially) input materials, land area, and maintenance. I agree the feed & fuel costs for animals could in theory be reduced by an order of magnitude, but animals will always be inefficient.
Importantly, if PF & cell based meats take market share from the most affordable meats first (ground beef & whatever chicken nuggets are made of), the animal meat sellers will encounter a negative feedback loop as they loose economies of scale and margins reduce.
By disruptions, I mean any system that is 5X or more better at doing something than the incumbent system.
You’re right that PF Meats are not—yet—a disruptive technology, I should have worded it better, but I the costs are declining by a consistent percentage each year. If the cost keeps declining exponentially according to Wrights Law, these predictions will come to pass.
At the end of the day, how much room for improvement is there in R&D and mass manufacturing in this space?
How much extra room can be created by AI enabled advancement, protein folding, robotics advancement, and rapidly lowering energy acquisition costs?
Thanks for the insight, I’m no expert on this topic so I’ve been going off conversations with friends in the space, RethinkX, and I take a first principles approach to solving problems.
I read the study and the conclusion seems to say the top problems are metabolic efficiency enhancements and the development of low-cost media from plant hydrolysates. But there are a lot of other engineering problems.
However I didn’t see any fundamental problems (physics based) that would force a floor on how good it can get. There were and are plenty of engineering problems with making batteries & solar cheaper as well (and AI better).
I also took at look at the forecasting articles, and they all seem to revolve around explicitly looking at cell based meat predictions and the bad predictions made by startups in the space.
It might be much better to forecast based on the historical price declines of precision fermentation per kg over the last several decades which this covers: https://rethinkdisruption.com/the-roadmap-to-disruption/
“from what I recall I didn’t find it especially compelling. Are there any particular attributes or analyses that stood out to you, besides the reputation of its publisher?”
I read the entire report a few years ago, and I found it quite compelling. I’ve studied the s-curve adoption of many technologies and I’ve found the ’Seba Disruption Framework” to be very reliable. It’s not just their reputation, I’ve personally seen their predictions in other spaces be far more accurate than other prediction organizations.
I’m interested to know what you found particularly uncompelling about the report?
Let’s talk raw materials. The vast majority of the elemental components of meat can be sourced directly from the air using electricity. Carbon, hydrogen, oxygen, and nitrogen. Some minerals and other elements (Sulphur Iron, Zinc, Selenium) would need to be sourced, which would entail transportation to a factory for processing. I asked GPT4 to calculate the cost of the needed mined materials for one lb of steak.
Sulphur: Typically found at about 0.3% in meat. Average cost: $65 per ton. Cost in one pound of steak: 0.003 * 1/2000 * $65 ≈ $0.0000975
Iron: Around 0.007% in meat. Average cost: $120 per ton. Cost in one pound of steak: 0.00007 * 1/2000 * $120 ≈ $0.000042
Zinc: Around 0.0035% in meat. Average cost: $2,500 per ton. Cost in one pound of steak: 0.000035 * 1/2000 * $2,500 ≈ $0.04375
Selenium: Extremely trace amounts, around 0.000035% in meat. Average cost: $65 per pound (Selenium is often priced per pound due to its rarity). Cost in one pound of steak: 0.00000035 * $65 ≈ $0.00002275
Adding these up, the total elemental cost of Sulphur, Iron, Zinc, and Selenium in one pound of steak would be approximately $0.044.
Each pound of meat needs ~4.4¢ of mined material. Every other cost is in the production process.
They did similar calculations for the cost of lithium ion batteries, which were over 100X more expensive decades ago and are now approaching the material cost.
I agree this stuff doesn’t ensure public acceptance, but I’ve never seen public acceptance not change in the past with other disruptions. Most people in the original PTC studies put price as their #1 issue, and that’s the same answer I’ve gotten from anecdotal conversations (including conservatives). There’s also a page or two in the report that addresses public acceptance.
Also if this takes most of the meat demand, economics of scale dictate that animal meat costs will rise, further accelerating the S-curve disruption.
The time horizon they’ve predicted is cheaper than conventional meat by 2030, and ~80% cheaper by 2035.
I agree that the PTC hypothesis is generally unsupported by the data available, however I also think this report may be missing the forest for the trees.
My primary issue is that I can’t see how this report or any of this proposed research could meaningfully accelerate the transition away from factory farming and greenhouse gas intensive meat production.
This research deals with understanding whether people would purchase alternative meat if it tasted the same and costed the same as regular meat. However neither of these things are going to be true for longer than 1-2 years because of the cost curve of alternative meats and the technologies involved.
Many of the following points I’m making are based on research by RethinkX, an extremely reputable research organization in the space of disruptive technologies:
Source: https://www.rethinkx.com/food-and-agriculture
Enter precision fermentation, the technology behind cellular meat production. This technology, like most disruptive technologies such as solar and batteries, followed a Wrights Law cost curve.
“For every cumulative doubling of units produced, costs fall by a constant percentage.”
The current costs of precision fermentation are decreasing by about 20% annually and there are no fundamental physics reasons why this would stop anytime soon. The limit to the affordability of lab (or at that point optimized factories full of vats) produced meat is the cost of acquiring energy and the fixed costs of factory infrastructure.
Why should we care about the PTC Hypothesis, people’s preferences for meet alternatives with similar metrics to legacy meat, when the most likely future is one in which alternative meat has the following attributes:
• At least 80% cheaper
• At least as tasty as the best meat today
• Consistently the same quality, every time
• At least as healthy, likely far healthier
• At least 100X less contamination issues.
• A longer shelf life
If the above predictions are accurate, shouldn’t our priority be to accelerate the production of lab grown meat by funding factories, research, etc...?
Why does the PTC Hypothesis matter?
Note that these estimates I’ve put out are sourced primarily from RethinkX and Tony Seba, who accurately predicted the solar price declines, rechargeable battery cost declines, and electric vehicle cost declines of the last two decades.
Read this for a highly in-depth report on all of this:
https://www.rethinkx.com/food-and-agriculture
I consider them to be a highly reliable source which we should take very seriously—however I’m interested to hear any insights from people who are more directly experienced in this space.
Do you think these predictions are directionally correct?
Hold up. That $1T number originated from this peer-reviewed study that I cited. I’d be happy to see your strong evidence that the $1T number is overblown, or perhaps even off by 10X. The goal here is to be less wrong.
But this is the EA forum, my friend. You can’t just claim something’s “a fake, made-up number” without any evidence. Especially when that source is a peer-reviewed academic study.
ignoring the huge genetic confounding that accounts for a very substantial part of the correlation between child poverty experience and worse adult outcomes.
If anything, this seems to me like an extremely dubious claim. The idea that ‘genetic confounding’ has anything to do with why impoverished childhood experiences lead to worse adult outcomes absolutely needs a strong RTC Study cited. Actually, it would need several gold-standard studies and a meta-review.
At first glance, ‘genetic confounding’ (especially in the context of poverty) also seems like a slippery slope to the idea that poor people are poor because there is something wrong with them, ignoring the multitude of ways the cards are stacked against them.
However, I’d really like to give you the benefit of the doubt. What were you trying to get at?
Cite your sources, this isn’t Twitter.
Approach disagreements with curiosity
It is true that the ‘poverty line’ is an arbitrary number that doesn’t necessarily equate to life experience not being ‘in poverty’ if you’re above it. It is also true that UBI puts every person, universally, over a certain amount of income. If you define poverty as people living under the poverty line, then a UBI reaching the poverty line would abolish poverty by definition.
Regarding the welfare system, almost everybody is in favor of dramatically reforming the welfare system because a lot of it right now is actually harmful to people. The one program most people approve of, social security, already functions (sort of) as a UBI for the elderly.
I struggle to see who, after looking at the numbers, would be against spending <10% of America’s budget ($539B) on a UBI that would pay for itself several times over & make it so the government can delete a ton of less effective welfare programs. Do you know that child poverty alone (only one small part of the damage of poverty) costs over $1.03 Trillion annually?
I think the idea that UBI would ‘massively increase taxes’ could do with some solid numbers. Taxes would increase moderately, but it’s not nearly as high as you think:
Research by Karl Widerquist of Georgetown University shows that it would cost only $539 Billion, less than 3 percent of the U.S. GDP, to permanently end poverty with Universal Basic Income. Widerquist says the $539 billion per year is 2.95 percent of America’s GDP & about one-sixth of the cost of commonly circulated estimates, and that this amount is less than 25 percent of current entitlement programs.
Widerquist’s research used U.S. Census Bureau data for 2015 to examine an estimated poverty-level UBI of $12,000 per adult and $6,000 per child. It also found that some 43.1 million people (including 14.5 million children) would benefit from this increased income, reducing the poverty rate from 13.5 percent of the population to zero.
The additional $539 Billion would account for less than 10% of the U.S. federal budget, even though proponents think it would be far more positively impactful than… well… pretty much everything else the government does put together. Creating a stable foundation for society is the function of government.
What I have in mind would be a refundable tax credit, which also applies for people who do not pay excess amounts in income taxes. (i.e., it would be like receiving a $X check if you have not paid any taxes)
I think this is the same idea as a Negative Income Tax. As mentioned before UBI and NIT are functionally identical and only differ in accounting terms.
I want to make it clear I’m not attempting to stretch the definition of UBI to include NIT. A Universal Basic Income is a very different mechanism from a Negative Income Tax, my point is that both policies achieve the game-changing impact of a Basic Income Guarantee (BIG).
UBI is a government policy that distributes funds to all people equally
My point here is that the government distributes those funds equally, establishes that baseline of economic stability, and that does not include how it’s being paid for. GiveDirectly is running a UBI experiment where every person in Maryland Liberia will receive UBI for 3 years. The UBI is not being paid for by taxes, but by philanthropy & international aid money. Whether something is UBI or not depends on the disbursement mechanism, not on the means of funding.
From what I’ve seen it’s incredibly likely (logical economically) that direct cash transfers—or funding guaranteed income—is the most cost-effective way to help almost all people in need philanthropically. If we can prove this claim with rigorous RTC trials, it could substantially blur the lines between paying taxes dedicated for UBI & spending money on high-impact philanthropy.
Wouldn’t a rich person or organization in Maryland Liberia also want to support GiveDirectly’s UBI program?
You provided a sketch of a cost-benefit analysis in this post (the four bullet points) and it does not include any costs.
Thanks so much for pointing this out! You’re totally right. I just went and added one, and this is what I added:
What about the downsides?
The primary losers of UBI policy would be (extremely) wealthy people and people with very high incomes as they will get higher tax rates.
In 2022, 34.4% of American households saw a $100,000+ income. It would be reasonable to say households with over $100,000 annual income could probably be negatively affected by increased taxes.
34.4% * 332M = 115M Americans
They will likely lose some amount of WELLBYs as their lifestyles will be harder to maintain. Increased taxes, the resulting stress, and a slight decline in living standards could likely contribute to, (spitballing again because living with slightly less affluence isn’t the same as living in poverty), a loss of 0.05 WELLBYs per year. I think this could be a massive overestimation though because although some people would have higher taxes, they would also benefit from their friends, family, and neighbors being much more economically secure.
I think it’s more likely only people with over $500K in annual income would be negatively affected (and only as long as their family & friends are also in the same tax bracket). 1% of American households make 500K+ annually. The 1% comprises 1.32 Million Americans.
115M * 0.05 = 6M less WELLBYs/Yr
1.32M * 0.05 = 66K less WELLBYs/Yr
Based on this back-of-the-napkin cost-benefit estimation, it seems like the benefits by far outweigh the costs
33M − 6M = 27 M net positive WELLBYs annually
Regarding Sentience Factories:
I very much agree with your point that UBI goes totally out the window the instant we give rights to sentient computers or uploaded humans because they can infinitely copy themselves into new beings (and that we don’t know when or if that will happen).
At that point though, I think pretty much everything else normal about the world will go totally out the window as well, including currencies. We could end up in some kind of star trek situation + the TV show Upload. I agree that from a longtermist perspective that this possibility is directionally negative. Good point!
I don’t think you can in good faith call a program that adds a new special tax that only applies to the UBI and thus deposits money in rich people’s bank accounts only to immediately yank 100% of the money back a “UBI,” as that clearly goes against the spirit of the “Universal” characteristic.
I don’t think the ‘Universality’ of UBI has ever meant that every person will benefit from it. The universality thing points to the fact that no-one will ever go below it. It is a minimum base income that is universally applied, and that universality has nothing to do with the tax structure used to fund said program.
A program would still be a UBI if it was funded entirely from government oil profits or some other source than taxes. It could even be funded by wealth taxes not income taxes. The source of funds is irrelevant to a UBI being a universal income floor.
However, I doubt this is an accurate interpretation of Milton Friedman, and I have only ever heard him talk about negative income taxes.
I feel like we’re going in circles with this one. I already described how NIT is functionally identical to UBI after all is said and done. It just depends on how people feel about accounting.
Milton Friedman used guaranteed income and NIT interchangeably, and I would guess (although I can’t confirm) that he understood NIT and UBI to be two sides of the same coin. Maybe we can ask an AI language model to pretend to be Milton Friedman.
A UBI would not save rich people from losing >90% of their income if something catastrophic were to happen to their business/etc., and it does not act as a better social safety net than alternative policies such as negative income tax or other means-tested/emergency assistance (e.g., TANF).
You’re completely right, it would not save them from losing all of their money &/or job income, but that’s not what I’m talking about. I’m saying that they will never fall below a certain level, and that level is enough to help a person recover at least part of their dignity & wealth over time.
Imagine you’re a rich person—something goes horribly wrong—now you’re bankrupt and have $0 in your bank account. Would you rather have to wait until the next April to get a big NIT check (you’ll have to wait a year for your income to go to 0), or get your $1,000 check at the beginning of the next month?
I’ve spoken to people on TANF and means-tested emergency assistance. It sucks and is absolutely awful for everyone involved. It’s especially rough because these people are in great need and it makes them jump through so many unnecessary hoops.
I think we are not understanding UBI to mean the same thing. UBI is a government policy that distributes funds to all people equally, through redistributive taxes that are high enough for the wealthy to pay for the full amount. I don’t think there’s any bait-and-switch in that everybody should know from the start that people making 120+ per year will make net-less income.
The breakeven point should be somewhere around 50-70K I think.
The fundamental issue (unless I’m misunderstanding) with tax-credit is that if you’re poor and have not made a high income, you can’t get any benefit from them. It doesn’t accomplish the fundamental BIG (Basic Income Guarantee) like UBI or Negative income tax.
A program which simultaneously adds a UBI and a special tax specifically designed to take away the UBI from richer income groups is a UBI in name only, if even that; it is functionally just a more complicated form income-adjusted welfare (e.g., a negative income tax credit but with extra steps).
UBI has always been a fundamentally redistributive policy proposal and is what people like Dr. Luther King Jr. and Milton Friedman meant back in the 60s. A special/additional tax specifically designed to transfer some wealth from richer people & distribute it to poorer people is most certainly what the name UBI means.
One thing I love about it is that it should benefit wealthy people a great deal as well. Not only would it reduce homelessness and petty crime drastically (as they are almost entirely caused by poverty), but rich people would know there is a limit to how far they can fall. Wealthy people are constantly afraid of losing their wealth, and UBI would meaningfully reduce that fear. A few rich people have told me it would make up for the higher taxes.
Finally, I find it much simpler actually than a negative income tax. My perspective is somewhat altered by the fact that I speak with a lot of homeless and impoverished individuals, and they would much prefer a simple check each month as it would be far more stable than a once-a-year thing.
I have no idea what’s going on in this comment thread ^
But I had one tiny comment about this footnote:
2. There are longer debates to be had whether this is actually “basic” (sufficient for living), but that can of worms need not be opened here.
“Sufficient for living” is one way to interpret the word basic, but basic can also be interpreted as simply “the size of the base income” or floor. It doesn’t necessarily have to be a livable amount. Most of the benefits of UBI come from the substantial amount of power that people can leverage even with only $1000 or even $500 extra per month.
I get your point about various policies looking very important if extrapolated far enough, but I disagree with your supposition that I (and other people who’ve advocated for UBI) am ignoring all costs in the cost-benefit analysis. There is a ton of research that has been done on this topic that considers your three points in detail, and I’ve seen it mostly come to these conclusions (although I 100% think we need more research and experiments):
The problem UBI policy solves by definition, poverty, is the root of all other ongoing problems in our society (excepting existential risks and climate/plastics problems). It is different and far more fundamental than any other policy because it establishes a strong foundation for economic security.
There are most certainly costs, primarily from higher taxes on the wealthy, but the benefits far outweigh them. The amount of damage (economically, socially, and mentally (WELLBYs)) that poverty causes is far larger than the cost of ending it.
One of the benefits of UBI should be a far more resilient, educated, and durable civilization. The longtermist case for UBI is that it will enable our society to persist longer and with greater prosperity.
I would highly recommend reading this thread by Scott Santens that discusses questions 1 & 2.
In the future we will likely gain the ability to grow the population very quickly, whether through uploads or other technology. At this point, a guaranteed per-capita income becomes an invitation for groups to rapidly grow so they can seize more resources.
I’m not very convinced by this argument, although I’m interested to hear more about how you think it would play out. I’m not sure this fits with the nature of resource conflict within nations in the modern world. I think we will soon be moving past many kinds of resource scarcity, and I just don’t see why UBI would be a good way to seize resources (get rich). If we saw this happening, we could probably adjust policy to ensure fairness (we need a lot more research and philosophy done before building major baby factories). And why would the kids produced be interested in keeping this hustle going?
Population collapse is also a potential global issue so it may be good to incentivize people to make more people.
IMHO: The best argument against UBI as a longtermist priority is that it is possible (if not highly likely) that technology will advance to such a level (I hope within the next 50 years) that money becomes mostly meaningless and people upload themselves to computers or merge with AI.
If that’s the case, we should probably consider the benefit of spending money impactfully sooner rather than waiting for it to become useless. This might upset some people at the one fund I heard about that’s trying to save up money to spend impactfully in the far future when the time arises.
I don’t think we are disagreeing.
By intelligent tax framework, I simply meant lower tax % for people with less income, and higher tax % for people with more income. A graduated tax like we have today instead sales taxes or a flat tax. Maybe there’s an argument to use a wealth tax as well or instead, but most proponents I’ve seen support increasing the top marginal tax rate from
Pigovian taxes would not be substantive to the cost of a UBI, so I’m rather ambivalent as to whether they need to funnel back into a UBI. The best argument I’ve seen so far for funneling carbon taxes into UBI (Carbon Tax) is that:
All people have a carbon footprint
A Carbon tax would increase the cost of living for most people, and people could be financially hurt by gas (for example) being more expensive, so
Distributing the tax revenue back to the people directly would counteract that cost
Perhaps I shouldn’t have brought Pigovian taxes up, as they are not central or important to the debate of UBI.
I think GiveDirectly is absolutely on the right track regarding the superiority of cash over other aid interventions, especially at scale. Note that none of GiveWell’s top charities are capable of spending billions of dollars without dropping below 1X GiveDirectly. It’s the only intervention that seems theoretically capable of ending global poverty.
GiveDirectly has the (admirable, I love what they’re doing & they should not change gears) desire to give cash (or UBI) to the poorest people in the world.
The longtermist question is more about the positives for society from having a policy that creates a stable economic foundation over the long term. It would suggest that we should not just focus on global development aid, but also focus on ending poverty in developed countries.
Poverty itself is a massive drain on resources, and I think it’s the greatest creator of problems in society. Ending it, based on the research above, would meaningfully improve the human experience for most people (even the wealthy who would have extra taxes) because we would have a more stable society.
In particular, helping hundreds of millions of people (especially kids) escape poverty could result in a ton more interest and workers available to work on longtermist issues. When people don’t have to think about day-to-day survival all the time, they can care about the long-term future.
I don’t strongly prefer UBI over a negative income tax, and I agree with you that ‘ease of passing through the political system’ is not a compelling argument. In practice, a UBI with an intelligent tax framework functions the same as a negative income tax (no less nuance, just different). The link below is what you’re looking for:
I would highly recommend reading the link above for all the nuance in this space. Given the other benefits to UBI, such as supplementing it from additional Pigovian Taxes (taxes on undesirable things like carbon taxes & drugs).
Ultimately, both policies achieve the same important outcome in slightly different ways: a Basic Income Guarantee (BIG) AKA solid foundation of economic security for all.
Given the rapid changes to the word that we’re expecting to happen in the next few decades, how important do you feel that it is to spend money sooner rather than later?
Do you think there is a possibility of money becoming obsolete, which would make spending it now make much more sense than sitting on it and not being able to use it?
This could apply to money in general, with AI concerns, or any particular currency or of store value.