Demystifying Universal Basic Income with Max Ghenis

Dane Groeneveld: Welcome to the Future of Teamwork podcast. This is Dane Groeneveld, CEO of HUDDL3 Group, and today I'm pleased to be welcoming Max Ghenis, the founder and president of the UBI Center. Welcome to the show, Max.

Max Ghenis: Thanks. Good to be here, Dane.

Dane Groeneveld: So we're going to talk a lot about universal basic income today, but before we jump into that, maybe you could tell our listeners a little bit more about who you are and how you've come to be attached to this growing new movement.

Max Ghenis: Yeah, sure. So I spent most of my career in tech as a data scientist. I actually started in the people analytics group at Google and then worked on the product side in YouTube. And throughout that period, just got increasingly interested in economic policy. I was actually exposed to a nonprofit called GiveDirectly, which sends direct cash transfers to the extreme poor in East Africa and Google made a sizeable grant to that and just looked into the research, finding that poverty really drives a lot of negative societal outcomes and you can prove this through these randomized control trials that GiveDirectly was doing. So I ended up just sort of going back to school for economics to pursue it full- time, and started the UBI Center in pandemic times, so early 2020. And we basically tried to conduct quantitative research into universal basic income policies. So there's been a lot of research on the impact of pilots or there's advocacy. Certainly, it's worth kind of filling the gap to understand, if you were to actually have a UBI policy, what would that look like for different groups of people? How do you pay for it? Those kinds of questions.

Dane Groeneveld: Very cool. There's certainly a lot of questions I've got. Maybe now's a good moment in and explain what universal basic income is?

Max Ghenis: Yeah, it's a periodic cash payment, usually monthly, delivered to every member of society without condition or work requirement. So that kind of differs from the existing types of safety nets in the fact that's cash. So it's not an in-kind benefit, you don't have to spend it on housing or food. You can spend on whatever you want. And it's also unconditional so you don't have to either work, it's also not mean ceased. So if you earn above a certain amount, you still get the benefit.

Dane Groeneveld: Perfect. And universal's an interesting word. So I think of this as state or national, federal, but universal. Does that point towards a direction that we want this to be global?

Max Ghenis: I like that utopian vision. I don't think it's gotten a lot of traction yet. Partially because we don't have a governing body that can do that. But even within a country's own borders, universal would be a pretty big departure.

Dane Groeneveld: It would.

Max Ghenis: Unless you live in Alaska and they actually have a small universal program there, which we can talk about. But in most cases, the most you're reaching with a benefit program is maybe a third of the population, something like that.

Dane Groeneveld: Got it. That is interesting. I was going to ask, are you seeing any live policies in play here in the US? So Alaska is a live fire environment.

Max Ghenis: Yeah. In 1982, they created what's called the Alaska Permanent Fund dividend. So they started getting a lot of revenue as a state from the oil reserves and they put that into what's called a sovereign wealth fund, where they basically invest it in different sectors of the economy. And depending on how much return it has over the five year period, they give a check to every person who lives in Alaska. So they've been doing that for now 40 years.

Dane Groeneveld: That's interesting. So I know I've seen similar things in the Middle East, where they've had national wealth generation through the oil industry and have provided a level, it sounds more like a dividend in the Middle East too from what I've heard. But that's not a minimum basic income, it's not adjusted for inflation, it's just a dividend that comes from that fund. So if it's a good year, it's a good number. If it's a bad year, it's a lesser number.

Max Ghenis: My understanding from the Middle East is... so Iran actually did have a program like this, but mostly, and Iran actually came at it from this angle, they sort of have subsidies for oil. It's very cheap to fill up your car, that kind of thing. And there's a lot of more public services, there's really not much income tax, so they use it to offset other programs but not really provide cash assistance usually.

Dane Groeneveld: Cash. Okay. All right. That's neat. Yeah, talking about gasoline, I think $175 at the pump last night for me to fill up a SUV. I nearly fell over. I didn't know that the numbers went that high.

Max Ghenis: Yeah, it's a bit high in California right now.

Dane Groeneveld: It's a lot high.

Max Ghenis: But not compared to Europe.

Dane Groeneveld: True. But Europeans are smart, they don't drive V- 8 trucks.

Max Ghenis: Yes.

Dane Groeneveld: No, that's really cool. And where your research is pointed, you talked about looking at advocacy, looking at types of policy that may be created. Have you got a particular focus? Are you looking here in the US, more globally?

Max Ghenis: We operate in the US and the UK.

Dane Groeneveld: Okay.

Max Ghenis: And those are the two countries that we have what's called the micro simulation model. So we have modeled the entire tax and benefit system under current law. UBI's very simple policy, but getting there from the existing system is complex because the existing system is quite complex. So we've invested in building the only open source models of the tax benefit system in those two countries. And even within the US, first of all, the US is just way more complicated than the UK. So we started with the UK, partly to just have something that we could really use. And in the US there's lots of opportunity I think for state level policy reforms that could get in the direction of UBI in various ways.

Dane Groeneveld: Got it. And when you are running these simulations, what level of income are you projecting? Is it a living wage? Is it a smaller number? Where do you peg it?

Max Ghenis: Depends on the study. We've done everything from a very small kind of universal payment. For example, modeling a carbon dividend in either the UK or the US. So that would be a carbon tax that you distribute the revenue as a basic income payment. And roughly, if you have let's say a$ 15 per ton carbon tax, that could fund about$ 10 per month for every person. So relatively small, but you still see for every$ 10 or$ 15 per ton carbon tax, you're going to reduce poverty about 1%. So everything from that to, we've done a study in the UK where you replace the entire tax benefit system with a flat income tax and redistribute the surplus as a base income. And there you start to get into territory where you're looking at cutting poverty roughly 40%. So very sizeable basic income payments, we had them vary by age group, but you're looking at maybe 10,000 pounds a year or so.

Dane Groeneveld: Okay.

Max Ghenis: $10,000 per year in the US as well.

Dane Groeneveld: Yeah, that's a really good context. I mean I think the dystopian views of universal basic income is the government's going to put us all on their money, their video games, their drugs, so they can control us more easily. But that would assume that everyone's getting enough money to live to pay the electricity bill, to have food, to do what they do. But if you're talking smaller values, and you've said it a few times already in this discussion, cutting poverty, if the primary objective is cutting poverty and you're talking a smaller value deployed to everyone, that doesn't seem like too big a step really. I know it's a shift from a policy philosophy standpoint, but it seems like a very logical, obvious thing to do.

Max Ghenis: Yeah. And I guess you can have the dystopian video game part of it without the universal cash.

Dane Groeneveld: Yeah.

Max Ghenis: And there are versions of UBI, I think, that really are not feasible and we hope to shed light on which ones make more sense than others. But yeah, even very small universal payments because a lot of these programs fail to reach the very poor. It's just a lot to comply with, to deal with applying for those programs. So if you have something that is more guaranteed to reach people, you can have a pretty large impact.

Dane Groeneveld: Yeah. The compliance piece, it makes a lot of sense. We had a guest on the show, Mia Thompson from the Unconnected, and she was talking about three point something billion people that don't have internet access on earth and therefore how are they meant to comply with a lot of these processes that are now digital in a lot of jurisdictions. And that's just one example of where it's difficult. There's lots of other examples. So that makes a lot of sense to me. As you think about this then, so it's starting small and growing where possible, is any of the work that you are doing looking at the unintended consequences? We're very focused right now in our team about how we drive teamwork and we're thinking about productivity and wellness. And with wellness comes the category of financial wellness and mental wellness, which I think can be quite intertwined when it comes to being able to live well, being able to put food on the table, pay bills, educate kids. Is anything that you are doing looking at some of those scenarios on how it plays out in local businesses, small businesses, big businesses?

Max Ghenis: Our models right now are, in terms of the core of our research, what's called a static model. So assuming no behavioral responses, no macroeconomic feedback loops. We're starting to change that work with more economists who are working on identifying those broader impacts. But I will say, I think just from other kinds of research, what we've seen is the benefits especially of reducing childhood poverty and especially within that young childhood poverty, infant poverty, the long term impacts of that are just enormous for child development. And if you believe that's going to improve the economy long term, it is very clear that it could potentially pay for itself on some margins at least. And on the flip side, of course, if you're going to fund a very generous program like this, it will take taxes to do that. So there are some studies that show it would reduce the size of the economy and some versions of it can be more pro or anti- growth than others. So some ideas that not necessarily in the UBI space right now, but a parallel movement called guaranteed income or just basic income where it's not universal but sort of phases out with income, you can create these scenarios where people are losing more in benefits than they get from the rest of their earnings. And that can really reduce labor supply and kind of trap people in poverty. So this is a topic that UBI I think has a promise to address, but it requires reforming some of those scenarios today, the programs that create those welfare traps and not inadvertently creating new ones in there instead.

Dane Groeneveld: Yeah. It's very relevant. The early childhood poverty and learning, particularly now. I mean, I think, probably for a hundred years learning, reading, and writing has really impacted people's progress. But then it's also just the social skills, the confidence that it takes to go out into the world of work. The World Economic Forum back in 2020 did a future of jobs report and it very clearly stated that the roles that humans are going to need to be playing more of as technology continues to filter into the workplace are going to be the problem solving, the communicating, the teaching and coaching. And so there aren't going to be as many of the roles that perhaps some of those people that have had less fortunate upbringings have been able to find some form of safe harbor in the last 20 or 30 years. So I think you raise a really good point on seeding good foundational health in our communities to create the right workforce resilience and agility for the future too.

Max Ghenis: Yeah, studies show really from all contexts, so in GiveDirectly's randomized control trials, in the extreme poor, you see that if you give money to parents, the kids' nutrition improves. They sort of measure arm width, and they have lots of different ways of figuring out that there's very direct impacts on health. So I think that can improve productivity even if you're not going into knowledge work. But then you also see in the US and developed countries, that test scores improve when people are lifted, kids are lifted out poverty. Also, as you we're saying, not just the book smarts, but also socially people have better, I think it's called non- cognitive development measures as well.

Dane Groeneveld: And there's also a crime piece because poverty naturally breeds crime. That's certainly why my family ended up in Australia a couple of hundred years ago. And that's a reality. And in our system, here in the US, I don't think we're really managing that very well. We're taking a lot of people, young people and putting them into the penitentiary system, which is only setting people back in terms of their ability to come out and lead meaningful lives with their families and friends. So yeah, I think there's another factor there too.

Max Ghenis: Studies from Alaska have actually shown that some measures of crime do-

Dane Groeneveld: Reduce.

Max Ghenis: Fall when those payments go out. Some of them I think rise as well, like public intoxication. So some people just have a nice party when that check comes once a year. And I think that's where some of the advantages of having a smoother, maybe a monthly benefit can just provide more of a sense of stability and just help people avoid desperate situations.

Dane Groeneveld: Yeah. No, that makes a lot of sense. I mean, what we are talking about today, Max is very much governmental level. It's universal for a reason. Are there any examples where you've seen companies trying to do this in the community or other more local community organizations that are trying to put more dollars in the pockets of their neighbors?

Max Ghenis: Many, yeah. Actually, just crossed a hundred of these guaranteed income pilots in the US over the past decades.

Dane Groeneveld: Wow.

Max Ghenis: So this is coming from anything from philanthropic organizations to governments. California dedicated$ 35 million over five years to have these guaranteed income pilots. And so it's a big part of the basic income movement right now to get more of those going.

Dane Groeneveld: Got it.

Max Ghenis: And the way those work, usually is you have some sort of target population, maybe that's low income mothers or something like that, and you send out a request for applications and then maybe send 500 bucks a month for couple hundred people randomly, and then they often have a control group as well. So we're gathering each of these studies semi independently, but then also being able to pool those results across studies. So I think in a few years we're going to have an even stronger evidence based plus the direct poverty alleviation of the program.

Dane Groeneveld: Oh, that's cool. And so that's heavily here in California by the sounds of it?

Max Ghenis: California is where I'd say the greatest density of these programs are, but they are nationwide.

Dane Groeneveld: Okay.

Max Ghenis: And in other countries as well. We were just talking with folks in Catalonia who are doing a really interesting pilot where they're actually replacing a existing program that has one of these really strong poverty traps. And so that I think moves in the direction of what could sustainable policy look like as well.

Dane Groeneveld: Yeah. No, that makes a lot of sense. Where do you see businesses being able to, or employees in businesses being able to play a greater role in, I guess A, learning and then B, supporting, advocating for these types of policies?

Max Ghenis: I learned about it through my own employer.

Dane Groeneveld: Right.

Max Ghenis: So Google made a big investment in cash assistance through GiveDirectly. They continue to do that. I think a number of companies are also starting to realize that this is a very cost effective way of helping people. And GiveDirectly, I should say they started in East Africa, they now have operations in the US as well. So, that's one opportunity. Of course, these local pilots, there's a lot of different players in that. I'm not sure if companies right now are playing a major part, but I think they could. Google, I guess most familiar with, so I think they're also supporting research into cash assistance. So there's a group called Economic Security Project, which is helping run some of these pilots but also integrating it with research, and Google has dedicated some philanthropic dollars to that.

Dane Groeneveld: Yeah. And when you talked about, you put it here when you were talking about that business, the randomized control, were they trials or pilots? How does that work? So how are they structuring it to learn more from the benefits?

Max Ghenis: When GiveDirectly started their work, they were doing randomized control trials at the individual level. So they would go into a village and they would randomly select a group of people to receive the cash and then the control group who doesn't, or maybe just had token amount so that they could fill out the surveys. And they track things like assets, how much they're earning, nutrition, educational outcomes across the treatment and control people. They've since moved toward a village level randomization. So instead of randomizing within a village, partially because they have enough resources, and also because they-

Dane Groeneveld: Conflict.

Max Ghenis: Were finding that were spillovers.

Dane Groeneveld: A lot of spillovers?

Max Ghenis: Conflict is definitely one reason. Also, because people who didn't receive the transfers actually would, in some cases benefit from the stronger economy locally. So that was kind of making it hard to deduce what would really happen if we scaled this up. Now, they're actually doing a full, the only UBI, true UBI experiment in the world where they're following I think hundreds of villages. Some villages every person in the village will get a couple dollars a day or so for up to 12 years. So it's truly measuring what-

Dane Groeneveld: So they know it's going to invest with it. Yeah.

Max Ghenis: Exactly.

Dane Groeneveld: Which in places like Africa is really interesting because a few dollars can go a long way. There's a lot of initiative, innovation, there's a high demand. So for those individuals who can use that to have some confidence to go out and start a small business or buy a couple of chickens and start doing eggs, whatever it is, going back to multiplier effect, that does have a lot of leverage.

Max Ghenis: So far, the only study of paper that's come out of this is one that came out of the pandemic and they found that the people in the villages who received the universal basic income were able to avoid falling into real dire and nutritional difficulties as the people who didn't receive it were.

Dane Groeneveld: No, that's really good. I know from my time, we did some work in a range of different countries for some of the oil and gas projects. One of them was Papua New Guinea, and we noticed that when the big oil companies come in to build and they're acquiring land, then they're having to make payments or set businesses up within the local communities because they're taking some of their farm land to run a pipeline or whatever else. It was interesting seeing how that worked. I'd be intrigued to see how universal basic income works around a project like that because what I saw from the outside was small groups within those villages and communities would get access to the funds coming from the company and would set businesses up that wouldn't equally sort of filter out to everyone. So it supported the bold and the brave, but not everyone. And it's interesting to see how that plays out.

Max Ghenis: The origins of UBI kind of connect to that story. Back in the 1700s, there were some philosophers who were talking about the land and the commons being really the property of everyone.

Dane Groeneveld: Yes.

Max Ghenis: And one way to recognize that no one creates mother nature, no one creates earth, is to try to maybe seize the land and give us equal parcel to every person. Another way is to just raise revenue from the value of the land. So, essentially, taxing the land value or having rents on resources and land and then distribute the proceeds of that to everyone. And this idea then became a little bit more formalized by a American political economist named Henry George. So there's this whole movement called Georgism, which kind of advocates for this idea of... Actually, the most extreme version is the only thing you should tax is the commons and everything else people should have for themselves. But even if you don't go that far, in this case for example, the value of the oil and the natural resources really belong to everyone and giving cash is a way to put that into practice.

Dane Groeneveld: Yeah. No, that makes a lot of sense. If you think about the future, what would you see as an achievable sort of milestone measuring stick? Is it getting universal basic income at a state level in a few states? Is it federal success? What are you guys working towards hoping to see happen in a five, 10 year period?

Max Ghenis: Yeah, I should say we're not an advocacy group, but I think some of the advocacy groups that are working on it, certainly hope for more pilots. There's a program in Oregon as well, a ballot measure for 2024 called the Oregon People's Rebate. And that will levy a sort of corporate tax or gross receipts tax that goes to everyone as a roughly$ 750 per year payment. So we're going to help with some analysis on that. I think beyond that, there's the idea of a carbon dividend, which I talked about earlier. So there's a national organization called Citizens Climate Lobby, which is largely, for a long time solely and now they're diversifying a bit. But really this has been their primary focus is there is a bill in Congress that would create this. It has about a hundred co- sponsors, so trying to get that across the finish line would be a major step. Within 10 years, you'd see roughly every person getting$ 90 per month from that program, as the price of the carbon goes up.

Dane Groeneveld: That's a lot in some of those lower socioeconomic demographics. I think I read the other day that average savings in some of the lower socioeconomic demographics is like$ 8. So two cups of Starbucks coffee, which is baffling.

Max Ghenis: Absolutely. Yeah. And some of the other areas that folks are working on are state level and national tax credit. So certainly the child tax credit nationally has been a major step toward a UBI for kids. And there's a lot of folks really on both sides of the aisle, mostly Democrats, but both sides who are interested in some version of that becoming more permanent. And we're working with a group in Maryland called the Maryland Child Alliance. They're trying to expand the child benefits within Maryland, starting through the tax code. But ideally, I think their view is separating it from taxes can make it more universal over time. And that's a way to reduce the budgetary impact of what would otherwise be a very expensive program is you can target kids, target young kids, target even having a one time baby bonus. So$ 1000 for every baby you have can really address infant poverty and help parents in a very difficult time if they're in poverty.

Dane Groeneveld: We actually did that in Australia back around the global financial crisis, I think it was 2007, 2008, and I think it was$1000 or$ 1500. At the time, sadly, that was what it cost to buy a flat screen television. So you saw a lot of flat screen television sales go up. But to your point earlier, it's about giving people cash and what they choose to spend it on is up to them. We're not going to be paternalistic and say it's only for food.

Max Ghenis: Yeah, right. There are some interventions that clearly outperform cash, mostly public health interventions in developing countries, things like malaria bed nets or vaccinations in some cases. And I think what GiveDirectly is hoping to build is just an evidence based that provides a benchmark. So maybe cash becomes a default intervention in development and even public finance in developing countries. But that becomes, okay, that's the bar. How much are you going to beat cash by? And let's really invest heavily in those programs.

Dane Groeneveld: Yeah. No, that makes sense. So here's a pivot for you. You're a technologist. I'm not, but I'm fascinated by Web3 right now. I don't know it, I don't own any crypto. But what fascinates me about Web3 from a layman's point of view is it seems to embody this sense of we're going to give people control of their resources, their data, their art, whatever it might be. Does Web3 play into universal basic income anywhere? Is it creating mechanisms to better deploy or create funds to deploy?

Max Ghenis: Absolutely. There's been a lot of overlap between the crypto and UBI communities. First of all, just a lot of people who have gotten rich from Web3 and crypto tend to gravitate toward this idea of cash because I think there's kind of a philosophical alignment as you were talking about.

Dane Groeneveld: Yeah.

Max Ghenis: So they've been major donors to GiveDirectly, for example.

Dane Groeneveld: Okay.

Max Ghenis: There's also Sam Altman, who I guess is the former president of Y Combinator. He is starting a project called Worldcoin, and the idea would be to build a crypto asset that can be distributed to every person on Earth. Verification is an interesting technical challenge. You have to make sure you're not giving it multiple times to the same person. So identity management in a privacy safe way is another area that aligns with Web3. But yeah, I think getting back to your initial question about universality, I think there could be a really interesting move maybe in 20, 30 years, you could have a global carbon tax because carbon emissions are one of those things where it's an externality for every person on earth.

Dane Groeneveld: Yes.

Max Ghenis: Sorry, when you drive your V- 8 truck in California, some of the people who are bearing the biggest brunt of that are people in Southeast Asia who are facing higher hurricane risks or... Not to guilt trip you too much.

Dane Groeneveld: I just realized I'm going to create a huge amount of hate mail now. We're talking about universal basic income, which is going to attract a certain type of listener and they're really going to hate me for my V- 8.

Max Ghenis: We'll forgive you, if you donate to GiveDirectly.

Dane Groeneveld: All right, I'll get on it.

Max Ghenis: Yeah. But you could have a global carbon tax and that goes to everyone on the earth, the revenue from that. So those kinds of utopian visions are a great intersection of these.

Dane Groeneveld: It's funny you talk about the intersection of Web3 and carbon tax. I've got some friends that are running a blockchain consultancy talking about how to create securities around some of these carbon credit programs in the blockchain. And then I've got another friend in Germany who's talking about creating this wallet where you can go to a nightclub and you can pay to get into the club or pay to get bottle service based on these carbon credit tokens.

Max Ghenis: Interesting.

Dane Groeneveld: My understanding is some of these carbon credit projects is very new. They don't really know what degree of carbon is being prevented from emission. So then they're now having to invest in infrastructure like drones to go and look at deforestation or whatever it might be. And actually pulling that data into the blockchain and then codifying it into some kind of value exchange, it's interesting.

Max Ghenis: It also ties to land. A lot of folks, I think in the land value tax Georgism movement believe that step toward that would at least be having all the registries of land be on the blockchain. These sort of natural assets. And having the carbon credits be an example of that, being everywhere for everyone to see, I think makes a lot of sense.

Dane Groeneveld: Yeah, that's really cool. And I'm going to stick on that Worldcoin, that Sam Altman project, one more minute. One thing that fascinates me about UBI, and everything that I'm reading about is about utility tokens, not crypto. So if you're creating some form of utility, it's likely to be a little less volatile. But if that concept of giving all citizens on earth or all citizens in a country a coin could be tied to what they use the coin on, it kind of goes against the premise of giving people cash that they can spend on anything, but it may actually create an ecosystem of vendors, partners, products that are sold on that coin that are now starting to climb. So perhaps, that's creating more profit, more dollars for redistribution. It almost creates a closed circuit in some of those communities that you want to see more of the money stay in the community rather than get drained out to the big cities. Hollywood's taking a lot of people's money with streaming right now. How do you keep them spending money on local businesses? Do you create something there?

Max Ghenis: Yeah, there are two places where this is happening that I'm aware of. One is in Brazil, there's a town called Maricá, and there's a city or province in South Korea as well. And they are distributing it's called a local currency, essentially what you're describing. I don't think it's crypto based, but it's the same idea of you can only redeem it for local services and I would not call that cash. I think cash is-

Dane Groeneveld: Free.

Max Ghenis: By definition, a bit more permissive than that. But it's an interesting approach to maybe building a coalition politically for a program like that.

Dane Groeneveld: Yeah, we've got a foundation, the Team Up foundation, and what we're really trying to do is go into under- invested, marginalized communities and put dollars to work and put some of our expertise and relationships to work to create more economic vitality for those communities. And we're talking to one group about creating this regional smart city where you create housing, you create healthcare, you create good food, and you create employment opportunities in this three tower project, for everyone from young families to senior citizens. Because then you're creating work where young teenagers are earning some money going up and looking after the elderly people. And we're trying to create these almost small ecosystems in communities that need that help. When I say we, it's not us, it's this group of different entities that have all got a common shared purpose. But everything that you are talking about today, it's reinforcing of that theme of movement, albeit I think true universal basic income is much broader base.

Max Ghenis: Yeah, that sounds wonderful. I would add that I'm not sure the local currency is necessarily needed to achieve that outcome. For example, GiveDirectly, now that they're doing these village based cash transfer programs, they can see what the impact is on the local economy. And they've seen that it's roughly$ 2 of economic activity for every dollar that's injected into the economy via the cash.

Dane Groeneveld: That's pretty good.

Max Ghenis: And some of that is coming through trade with other areas that are nearby. So certainly, there are imports but also exports. It can enable people to invest in businesses that maybe they're selling produce to the neighboring town that didn't get the cash, or maybe they did. So it's interesting to see multiple models being tried.

Dane Groeneveld: Maybe that is an interesting, and I know you guys are more about the analysis than the advocacy, I thought that was a good point that you made. But maybe that's an interesting tie in as well, that if these groups are going out there to look at economic development in a community, that the universal basic income is foundational. It helps people lift up out of that poverty, have a bit more opportunity. And then if you bring in these optionally accessed programs around entrepreneurship, around education, co- ops. Because in some of the rural communities, co- ops tend to drive a lot more produce for trade. And better, you're not a price taker than either. Maybe some of those programs in parallel with universal basic income can create even more traction, even more velocity in the right direction too.

Max Ghenis: Yep. And it sort of gets back to using cash as a benchmark, as a baseline. Let's see how we can improve on cash. And maybe that means there are some very cost effective charities that do conditional cash transfers. So if you send your kid to get vaccine, you get the cash. And you can track, first of all, the cash has the benefits for people who participate that you see in other cash studies, but also improves vaccination rates. There are some studies that pairing cash with what's called aspirations. So sort of short interventions that just get people think bigger about what they can do with their lives. In some cases, those can be very effective. On the other hand, there are probably a lot of interventions that might not outperform cash. So there are some studies showing, I think job training programs in general... Oh, sorry, financial literacy programs only explain about 0. 1% of people's spending behaviors. They're just not usually very effective. And GiveDirectly has done some benchmarking randomized control trials where instead of the two groups, one person gets cash, the other gets nothing, there's a third arm where people get maybe a nutrition intervention or job training intervention. So you can see how those compare. And so far, cash has looked like it performs as well, if not better than those programs, even on the dimensions and the outcomes that those other programs are targeting. So I'm excited to see more of those kinds of benchmarking studies to identify those opportunities to both, as you said, pair with cash to amplify the impacts and also just outperform cash without cash.

Dane Groeneveld: Yeah, actually a good friend that we work with, Dr. Sirolli, he did a TED Talk called" Shut Up and Listen" years ago about aid in developing countries and the damage it does. I think he referenced a book called" Dead Aid," which talked about just how much of the interventions that we feel are making a difference in some of these countries or rural areas are actually causing negative detrimental effects.

Max Ghenis: Yeah, absolutely. I mean, for a long time Obama ended this practice, but we were sending rice and corn from the US to these... Shipping it, first of all, it gets stale when it's being shipped.

Dane Groeneveld: Huge carbon emissions.

Max Ghenis: Yeah. And when it arrives, it destroys the local farming community. So there's been, thankfully, I think a lot of recognition that those are problematic and replacing those actually cash tends to be the thing that they replace it with. Or food vouchers or something like that. There's this whole new movement to optimize and study with randomized controlled trials mostly, these interventions that people have taken for granted for a long time. And it's really reshaped [notification sound] economics.

Dane Groeneveld: No, that's really neat.

Max Ghenis: Oops.

Dane Groeneveld: No, it's all good. Yeah, I've learned a lot today. Like I said, I wasn't entirely in the dystopian view on universal based income, but I was worried about what it would mean to teams if people can then just free ride. But the way you've described it has been so enlightening and encouraging because it is about this baseline, giving people cash, giving people more opportunity, economic opportunity, but not saying you don't have to work.

Max Ghenis: Yeah. People in general, the studies show, roughly if you increase your income by 10%, you might reduce your hours worked by about 0. 5%. So it's a real effect, but it's relatively small one. A lot of those instances are people spending more time with their kids. The people who are most elastic in economics jargon are new mothers or students. And I think these kinds of stability fostering interventions can, it's an area of open inquiry, but my suspicion is that they can improve things like work cohesion and team building. So maybe we can work on studying that in the future.

Dane Groeneveld: That would be cool. And I get the sense that would be a cool study. If you could study a certain type of small business that has, let's say it's more of a consumer facing local business retail store, whatever else, I guess. And then you look at the impact of universal basic income on how they're performing. That would be interesting. Maybe it's a little bit too close to the dollar. Then you kind of go up and do another group, which is more knowledge workers, a local insurance office or a local accounting firm, and see how they're performing. And the weight of our local communities still impacts people in their day jobs. And I think the healthier the wider community is the better business is for everyone. So it's interesting that you mentioned that some of the studies are showing there'd be a reduction in economic, in GDP on rolling out one of these programs. But the question is, is it that one step back to go two steps forward? In terms of innovation and just fluidity of people doing business and being in communities that aren't spending as much money dealing with some of the adverse effects of poverty too.

Max Ghenis: Yeah. Yeah. GDP isn't everything, also.

Dane Groeneveld: No.

Max Ghenis: Even the economists who have found that... For example, there was a study out for the University of Pennsylvania Wharton School finding that UBI, even if it was funded, what they called externally, so something like the Alaska Permanent Fund dividend. If resources just fell from the sky and we could distribute that as a UBI, that would reduce GDP. But clearly, people are better off from it.

Dane Groeneveld: Yes.

Max Ghenis: It's free extra utility, extra satisfaction in people's lives because they have more resources for them. So I think it's a great instance where you're maybe seeing some more leisure or people spending more time with their kids and those are going to yield long term benefits. But even if they don't, consumption and GDP only measure part of what economists really are intending to measure, which is-

Dane Groeneveld: Marginal benefit.

Max Ghenis: How much overall benefit do people have across society?

Dane Groeneveld: Yeah, I think that's a really good point to end on, that it's important to be thinking about the human benefit and not just about some of the measures that we've all come to rely on and really don't understand. Just like I didn't understand universal basic income before today.

Max Ghenis: Yes.

Dane Groeneveld: Cool.

Max Ghenis: Yeah.

Dane Groeneveld: Well, Max, it has been wonderful having you on for the discussion. I've really enjoyed it. And if people wanted to find out more about the work you're doing on UBI or all your work at Policy Engine, which we didn't discuss, what's the best way for them to find you?

Max Ghenis: Yeah. So I'm on Twitter, I tweet probably too much @ MaxGhenis, and the UBI Center is ubicenter. org and Policy Engine is also policyengine. org. And I'll just quickly say that Policy Engine is an app that lets you design custom reforms, that could include UBI but also other tax benefit reforms, see how it affects society, see how it affects your own household. So that's we hope going to help accelerate just understanding of policies like UBI and how we can create a more just society overall.

Dane Groeneveld: That's awesome. Well thanks for all the good work you're doing and the team's doing. It's clearly going to have a big impact as we go forward into the next generations too.

Max Ghenis: Thanks, Dane. Really enjoyed the conversation.

Dane Groeneveld: Thanks.