The Biggest UBI Experiment in History Failed: The Cover Up

In this episode, hosts engage in a detailed discussion about a Universal Basic Income (UBI) study, exploring its outcomes and societal implications. The study, funded by Sam Altman of OpenAI, provided $1,000 monthly to participants over three years. Contrary to expectations, the recipients had $3,000 less wealth than those not receiving the funds, indicating potential negative impacts of UBI on financial security. They delve into how this aligns with human nature, the role of financial literacy, and broader implications for economic policies and future societal structures amidst AI advancements. The video also critiques media representation of the study and questions the reliability of objective reporting. The hosts connect UBI's potential impacts to larger themes of work, leisure, and purpose in an AI-dominated future.

Speaker 18: [00:00:00] Well, here we are again. Yeah. You remember our learning machine over there?

Speaker 19: What's it going to teach us today, Mr. Money?

Speaker 18: I'll turn it on and you'll see.

Malcolm Collins: when they gave people a 1000 dollars a month over the course of 3 years, 36, 000 dollars in all.

On average, recipients of this money had 3, 000 less total wealth than recipients who didn't get this money.

And I need to point out here. They didn't even increase the time they spent with their kids. Like to me, like, that's the, like the cruel twist of the blade of how fundamentally selfish the average human is,

Speaker 22: Yeah.

Speaker 23: I don't like

Speaker 22: people.

Speaker 23: Oh, well, now that's not fair, Roy. Have you met all of them?

Speaker 22: I've met enough of them. People. What a bunch of b******s.

Malcolm Collins: people are like,

I can't [00:01:00] afford to spend time with my kids. And we have proof now that even if you had more money, you wouldn't spend more time with your kids when people are like, if I had more money or if I had inherited money or blah, blah, blah, like I would be living a different life, like that's functionally untrue.

You would actually maybe be living a materially worse life and now means if reparations were to be paid as a form of UBI to the black community, it would permanently monetarily sabotage the community.

Speaker 26: If you're just joining us, black people got their reparations checks today, and in short, all hell is broken loose. So how did you become the world's wealthiest man, Tron? Hot hand in a dice game, baby girl. welL,

Speaker 27: I think what everyone wants to know now is what are you going to do with all this money?

Speaker 28: I'm going to reinvest my money into the community.

Speaker 27: Oh, that's a very nice gesture. What were you saying? Hi! Okay.

Is that your son?

Speaker 28: No, no, I just bought this baby Cash.

Malcolm Collins: Now, here's where it gets dystopian. At the top of the [00:02:00] page it's just one line for the results of the study.

Cache increases possibilities

Speaker: for I knew that even though some of you supported us, some others were looking at me and thinking, You're a liar!

You're a liar! You know something that you're not telling us, you slimy scumbag liar! You know, that's what people would say to me.

Would you like to know more?

Malcolm Collins: Hello, Simone! I am excited to be here with you today. Today we are going to be discussing something that changes my view on economics. The media. And what might be the most optimal economic system?

This is a large experiment that was run by Sam Altman of OpenAI to see if UBI would work. UBI means Universal Basic Income.

It is the idea that

It might make sense to just do cash handouts across the population, like say everybody gets 1, [00:03:00] 000 every month, and that this might be a lighter weight way to do welfare, and it might have some moral or even economic justification. Well, I am going to briefly describe the findings from this study that I thought were most relevant.

Then I'm going to go over the way the news. Reported the studies findings and the way his organization open a I reported the studies findings. So, the information that I thought was an important takeaway is that when they gave people a 1000 dollars a month over the course of 3 years, 36, 000 dollars in all.

On average, recipients of this money had 3, 000 less total wealth than recipients who didn't get this money.

Simone Collins: Wait, wait, no, no, no, hold on. I just want to make sure I have this right. [00:04:00] They were poorer. The people who got extra money but were not told to change anything else about their lives. Had less money than before this experiment if they received the, what is it?

1, 000 a month payments.

Malcolm Collins: Yes So 36, 000 in total. No, no, no keep in mind this means somehow when contrasted with the other people they lost 39, 000 because it's not just the 3, 000 less to their wealth You also have to consider all the money that was given to them that at the start of the experiment, you know Should have made them well They managed to lose.

So they managed to lose a considerable sum of money.

Simone Collins: Ooh. I didn't think about it that way. I was like, okay, well, if you started out with 50, 000 and then you ended with a little less than that, you know, it's fine.

Malcolm Collins: It's worse. So for every dollar received by the program's participants earnings, excluding the cash transfer decreased by at least 12 cents.

Oh, so they were working less. We'll get to all that. We'll get to all that. I'm just giving you the, the. [00:05:00] Things I thought were most relevant. Okay. All right. Total household income fell by at least 13 cents per dollar received.

So, to your 1st question, recipients of reduced their by 4 to 5%. These reductions translated to 2. 2 fewer hours per week. 114 fewer hours annually recipients mostly spent this time on more leisure activities and not pursuing education or work.

Higher quality jobs or spending time or caring for family members. The authors noted, quote, Interestingly, we do not , observe those with children spending more or less time with children as a result of the transfers. Moreover, households without children reduce their work by more than households with children.

So, when people are like, oh, if I had more money, I'd spend more time with my kid, it's like, err, like, statistically, that's wrong. And I should note here that they actually kind of tried to go to participants, like, they would ask them every time they meet, like, how much time are you spending on additional education?

How [00:06:00] much time are you spending on additional training? How much time are you spending on

Simone Collins: See, you could even argue that they kind of

Malcolm Collins: And they did not. They still

Simone Collins: didn't even.

Malcolm Collins: No evidence of this. Now, here's where it gets dystopian. Okay. On OpenAI's website . At the top of the page where they, on OpenAI research, it's just one line for the results of the study.

Cache increases possibilities.

Speaker: For I knew that even though some of you supported us, some others were looking at me and thinking, You're a liar!

You're a liar! You know something that you're not telling us, you slimy scumbag liar! You know, that's what people would say to me.

Malcolm Collins: Let's keep going. So, here we have a write up on this by

The register

and I will read it because it [00:07:00] is, it is actually kind of chilling. So they wrote as the title of this, Sam Altman's basic income experiment finds that money can indeed buy happiness.

Simone Collins: Oh, I mean, it's not wrong because people spend more time Netflixing and chilling.

Malcolm Collins: I guess. Yeah. The results of the largest universal basic income trial program in the United States, the one backed by billionaire Sam Altman, no less, are in and entirely uninspiring. After three years of giving 1, 000 to low income individuals, 1, 000 a month of no strings attached cash, a group of researchers at Altman's Open research determined that recipients mostly spent the cash on life necessities, got a bit choosier in their employment, and made more use of medical care.

Perhaps most critically, it gave participants an increased sense of agency, making them more likely to start their own business, take the opportunity to work a lower paying job for more independents, budget their finances to plan for the future, and improve their [00:08:00] prospects for the future.

Through further education. Thanks for reminding us of what we already know, Sam. UBI makes overworked poor people less miserable, underlined.

Speaker: And then people would see my wife in the supermarket and they would say hello, but they'd be thinking, Ah, there goes that murderer! You got away with murder, you murdering, lying waste of life!

Simone Collins: I want to get this straight. So they, they said that the, the research gave people those opportunities, but didn't ultimately make those things happen.

Malcolm Collins: It gave them the opportunity to take a lower paying jobs,

Simone Collins: but it also gave them the opportunity to invest in education.

It didn't say that they did invest in education. It didn't say caused them. They factually didn't, by the way, it gave them the opportunity to

Malcolm Collins: that's just they

Simone Collins: chose. I know. Well, but what I'm saying is, is this this article was not misleading per se, but it was. factual, but more,

Malcolm Collins: more an opinion piece then.

No, no, no, no, no, no, no, no, no. Hold on. [00:09:00] They get to the the meat and potatoes, so that you know that they're giving you both sides of the argument. Later in the article, it says, It's not all sunshine and roses and UVI land. . Though the Y Combinator Studies results published on July 21st, 2024 are generally positive and show the benefits of no strings attached cash payment.

Not everything was a net positive. Take, for example, the fact that that recipients were more likely to visit the hospital, see a specialist, go to the dentist, and cut down on excess alcohol and drug use. Those are all great results, except they didn't lead to a net improvement in participant health. Quote, on average, we do not find direct evidence of greater access to health care, or greater access to medical care.

or improvements in physical or mental health, end quote. The researchers say in the report, for many participants, quote, the additional thousand dollars per month alone may not be sufficient to overcome the larger systemic barriers to health care access and reduce health disparities, end quote. In other [00:10:00] words, UBI is just one piece of the puzzle that is lifting the conditions of the poorest Americans.

Speaker: And to me, people might say things like, Liar! Tell us what you know, you goddamn liar!

Malcolm Collins: Not enough socialism! Not enough socialism! I don't want, I To think that you could write an entire article and not mention that they were poorer at the end, that they were late making less money, that they were earning less, that their incomes were now less. Malcolm, stop.

Simone Collins: You're thinking too much. Quiet, quiet.

Malcolm Collins: They were in a worse position overall because now they're lower income. They were not spending more time with their kids. They were not spending more time on self improvement. They had

Simone Collins: the opportunity, Malcolm. Damn

Malcolm Collins: it,

Simone Collins: can't you just be A good kind person.

Speaker 22: People. What a bunch of b******s.

Microphone (Wireless Microphone Rx): Actually wanting to talk more about this. Not spending a lot of time with their kids [00:11:00] thing, because I would thinking about this in my own life. And I realized that the amount of time I spend with my kids is not at all a function of financial security, but a function of just. Commitment. Like what I expect for myself as a parent.

In fact, recently I started deciding that every single weekend day I would make a day to do something special with the kids. Either take them to a park. Like for example, yesterday I took them on a long walk through,

The woods. , a hike up and down a mountain in valley forge.

Speaker 25: Oh, we're tired. I said that. Yeah.

Microphone (Wireless Microphone Rx): And. There was just a commitment, like every weekend day. I'm going to spend. As much as I can with my kids. And I think that. My, my financial situation didn't change. It was just a change in commitment. And I think for a lot of this stuff, it's just a, what's your commitment [00:12:00] to an individual thing.

And then when somebody challenges you and they're like, why aren't you doing this? Because you don't want the cognitive dissonance of, oh gosh, I could be a better parent. You say, well it's because I don't have enough money. But it's not because you don't have enough money. It's because you haven't decided to do it.

Simone Collins: This is

Malcolm Collins: In the register, a mainstream newspaper. So let's go to another mainstream newspaper. This time we're gonna go to USA Today, okay? So how did USA Today report on this? The title, How much is 1, 000 a month's worth?

Question mark. New study explores impact of basic income. Quote, How We're all finding the same results in quote said Stacy West, co founder and director of the University of Pennsylvania Center for Guaranteed Income Research quote. You give people cash and they make great decisions for themselves and their family in a way that you know can promote upwards economic mobility, end quote.

Speaker: You know goddamn well what happened so stop acting like victims [00:13:00] and confess, confess! Liar! Confess!

Malcolm Collins: So this person works for the University of Pennsylvania. That's a IEB league university. That's Penn. It's still a

Simone Collins: progressive university.

Malcolm Collins: But she's just lying. I, I, I, I just said

Simone Collins: it was a progressive university. What more do you need to hear?

Malcolm Collins: Since when did

Simone Collins: progressive universities pursue truth?

Malcolm Collins: Understand now how corrupt even the Ivy Leagues are now.

They will just Even,

Simone Collins: even the Ivy What are you talking about? They've been the Forefront of correction from the woke, my virus.

Malcolm Collins: I think some people still believe that there is some degree of credibility within the hollowed institutions. You may have had the wool lifted from your eyes, but I am sure some of our listeners are at least slightly aghast that she would lie to a reporter about something this easy to fact check and that the reporter would then publish all of this uncritically.

But let's read more of this article. That they wrote [00:14:00] overall, researchers said their findings suggest cash quote provides flexibility in quote, quote, the data we collected highlights the complexity of people's lives and needs in quote, reads a statement from open research shared with USA. Today. Quote, cash provides the flexibility to meet those diverse needs, and it is responsive when needs shift based on a person's circumstances in quote, according to the study here.

So now they're going over all of the important takeaways. That we should take from the study, okay? No, they are not gonna Note what they are not mentioning. Recipients increase their spending by 310 a month on average, primarily using their money for essentials, like food, housing, and transportation. Not really true though.

The money was also used as a financial support for others, with recipients spending an average of [00:15:00] 22 more a month on things like gifts for friends and family, loans, donations, charity, and alimony payments. Recipients worked 1. 3 hours less a week on average compared with the control group and reported more leisure time, but remained engaged in the workforce.

Recipients were 26 percent more likely to visit a hospital in the last year of the study and 10 percent more likely to get dental care and visit an emergency room. They also reported a decrease in problematic alcohol and some types of illicit drug use. Now here I would note, by the way, in case you don't remember, the other Paper accidentally admitted the fact that it's one of the ones this paper is coming up that their health didn't increase.

So, yeah, they might have had a marginal increase in dentist visits, but it didn't change anything recipients were 4. 4 percentage points more likely to move neighborhoods. Open research plans to look in to how the cash transfers affect housing stability and neighborhood [00:16:00] quality and future analyses.

Recipients, especially black and female recipients, were more likely to report having an idea for a business. Recipients also reported a greater likelihood of starting a business within the next five years.

 She's

Speaker 6: maKing jewelry now She's got her own website

Speaker 5: your sister like, going to massage school

Speaker 4: But

And it's just like, we're so happy, because she's not floundering around anymore.

Speaker 5: Yeah? What's she doing again?

Speaker 6: Making jewelry. She got her life

Malcolm Collins: and then And then it says, but the concept has received pushback.

More than half of us adults oppose a universal basic income of about 1, 000 a month for adults when surveyed by Pew research center in 2020. And the greatest opposition was among white adults. Whoa, spooky.

Speaker 8: [00:17:00] How's it hanging? I'm gonna scare

Speaker 9: the hell of you! Any

questions?

Malcolm Collins: A number of states, including Iowa and South Dakota, have passed bills that prohibit counties or cities from providing guaranteed income as skeptics argued that the money would discourage people from working.

And it's like, well, I mean, it did. We know that now. Why didn't you? Oh, you did report that they worked less, but you didn't report that they're also making less now and have less now.

Speaker 10: I don't know what your plan is, but I'm gonna stop it! I am infecting this city with genetically enhanced vermin, but you'll never know! You just told me.

Speaker 11: You're lying!

Malcolm Collins: Yeah. So, Simone, why do you think, [00:18:00] you can understand why all of the newspapers are lying about UBI not working and covering it up.

Why do you think OpenAI would be motivated to lie about UBI working?

Simone Collins: That one seems pretty straightforward that a lot of people are afraid that AI is going to take their jerbs. And if AI does take the derps, then they're going to get real angry at OpenAI. They're going to get their senators and their representatives to make legislation that kills OpenAI.

And if that happens there will be no more OpenAI. And OpenAI wouldn't like that. So that's what

Malcolm Collins: I'm thinking. So I'm glad that you immediately see through this. Sam Altman always hears, what if AI takes all our jobs? And so he's like, well, if I can show that UBI works at a broad level, then I can say, well, it's not my fault.

It's the government's. It needs to be issuing UBI. Look, I showed it worked. And for for people who don't know, this is by far, like the largest, most rigorous study on this done in the developed world. There were some studies that showed it was beneficial in developing countries, [00:19:00] but, like, in those instances, people were losing it to, like, change that roofs to metal roofs and it's like, yeah, obviously, but it turns out people in the developed world who don't have a lot of money.

The average income of individuals in this study was 29, 000 dollars. I'm going to say something so sinful. It turns out they're in that position because they have chosen not to improve their lives. And when given the flexibility to make choices to improve their lives, they don't make those choices.

Simone Collins: Actually, can I weigh in here? So I I've been thinking as you're talking about the results of this, this research of Caleb hammers, YouTube channel financial audit, where he, he has people come on and he goes through all of their spending and everything.

Speaker 12: Well dude, you're blowing all your money when you don't have money. You can't take care of your own life. You start your checking accounts with nothing. You refuse to get a job that will accept you, like the Whataburger job that did accept you, and then you decided not to do it. Well, I had a [00:20:00] reason. I mean, in my head, I had a reason.

Speaker 13: But you could have gone back and got it! They're always hiring! I don't know. Maybe.

Simone Collins: And there are so many patterns that I feel would probably show up in participants of this study as well.

There are many people who've come on, who've received inheritance. They've received 60, 000. They've gotten a divorce and they sold the house and made 200, 000. And when people. receive cash windfalls and they're not financially literate which is the lion's share of the people who come on Caleb Hammer's show.

They blow through it all. And often then some, they go into further debt. And I think what happened And this has been shown in statistics. Yeah. I think what happened here is a, a, a small, a relatively small percentage of uniquely predisposed to laziness. Financially illiterate people saw that they were going to receive a thousand dollars per month and were kind of like, Oh great.

Like my expenses are taken care of. I'm going to quit my job. Like my [00:21:00] expenses are relatively low anyway. I'm going to go out to eat every night. Like, you know, they're like, Oh, well things go to food and, and transportation. So they're going to get like a lease on a new car. You know, they're going to do a lot of things that they're going to increase their spending in a more unsustainable way.

Like I'm going to get sushi every day. And. This small number of people who just totally quit their jobs, which are probably part time to begin with, and just decided they were basically going to live off the thousand dollars threw off.

Malcolm Collins: People didn't decrease their, their the percent employed didn't decrease, but their hours work did their hours were did.

So I said,

Simone Collins: these people who are probably working part time anyway are probably decreasing. I'm going to push back

Malcolm Collins: really strongly. You think so? In your mind, you hear 20, 000 and you hear low income individual when 29, 000 is around the mean income in the United States. I mean, median income. Hold on, I'm going to look up right now, but I'm

Simone Collins: pretty sure.

Yeah, I think, I thought it was more around 60, 000 for household, which is much higher than what you're saying.

Malcolm Collins: No, it's uh, [00:22:00] 37. 5. Is the median? It's the median. So this is around the median income in the United States. This is not like, unique, idiot, like, whatever. But I'm gonna go further because I want to explain how the study works.

I want this to be a good summary of like everything on the study, all of the important findings and how it's structured. So over the course of the study, as I've mentioned they What treatment group one was given 1, 000 per month. The control group was given 50 per month, and this was to keep them coming back.

There was 1000 participants in the treatment group, and there was 2000 participants in the control group, which is enough to be very statistically significant in a study like this. Payments were unconditional with no strings attached. Participants retained all existing benefits. Data collection. The study collected both quantitative and qualitative data.

Specifically, they did lots and lots of surveys because again, it's an expensive study to run. So they want to capture everything and bank transactions and they also did interviews with participants and there's going to be multiple extra studies to come out about this [00:23:00] going forwards but i'm sure they're going to be more massaged going forwards now that the Cat sort of out of the bag was this one and i'm sure sam the person funding.

This was not happy about this Especially given that he just had everyone lie about this when he could have, like, owned and been like, okay, well, now we need to come up with something other than UBI, which he didn't do. He's like, we're still going to pass. I expect massage results going forwards.

So, there was a benefit to food scarcity, but this was short lived and it disappeared over time. By the end of the program, participants reported no better ability to meet their food needs. The control group, the people in this was really fascinating to me. The people in the treatment group who were getting the UBI, they significantly increased disability reporting.

So by four percentage points. So once you started to get some handouts, it seems like you normalized to this way of life and begin to look for additional ways to get handouts. Which is not great. No significant health improvements quote. And this is from the study. No improvement in measures that participants self reported access to health care or their [00:24:00] concerns about their ability to pay for needed medical care in quote.

And their debt increased. So, if you are on UBI, while the amount of money you reported spending on saving money increased, your actual functional debt at the end of this was higher. And so, employment effects There was a 2 percent decrease in labor market participation. This recorded in eight fewer weekdays annually.

Next other negative effects. There were minimal changes in credit availability, bankruptcy rates, and foreclosures. Now let's talk about the positive outcomes. Increased spending on essential needs like food, house, sports, and transportation.

I mean, but those aren't really essential needs is the thing. If they're not increasing your productivity, then they're not essential needs that they're a form of luxury. If I go to live in a mansion, is that an essential need?

Speaker 14: How much debt did you go into in those three months? Mmm, those three months, I would say, 15, 000. F you, lean, that's not lean. [00:25:00] It was my, my, my rent. That's not lean, though. My rent for a month is 3, 500. It's not overly expensive, but it's not lean. My rent was 3, 500. Yeah, that's not lean. Because that's the place I was going to live in.

I don't care, live in a cheaper place. Mm hmm, but then I would have to move again. Oh, cry. Cry. What? So, the problem was, I was supposed to start working August I'm trying to justify all this bull Okay, yes. Yeah.

Simone Collins: Well, this shows up again all the time in financial audit when Caleb asks like, well, you know, what's this and what's this.

So many things that are food are really not food and people are spending ridiculous amounts eating out and they're going to classify, I'm sure all restaurant visits in this. And if someone gets a new car, a new lease, like chooses to do something irresponsible as transportation again, and Caleb gives his guests so much s**t for eating out, even just going into a gas station and getting a snack, he gives them s**t for that.

He gives them like anything like he considers irresponsible, [00:26:00] but people do it so much, especially if they feel like they have money to spare and the same with transportation. Like there's people who will just take Ubers everywhere or. Like, and like, you know, us, like, even when there's an emergency, we're like, I don't know, maybe I can, I can walk it, you know?

No,

Malcolm Collins: I was just thinking about us and eating out. So Simone basically never eats out. You may eat out three times a year. Maybe I am a little bit more like I am. I admit that I have less Austerity than Simone. And yeah, like even when

Simone Collins: we go traveling, I'm going to a grocery store and buying food.

Malcolm Collins: But when I eat out.

I always and it's probably less than once a week. I always ensure that I can make at least two full days worth of food out of it. By that, what I mean is I typically only eat one meal a day. And when I eat out, I'll make that my one meal for the day. And then I save half of it. And then I cook it the next day for my second one meal of the day.

And Simone, you're not like, you know, I'm a hundred percent about this. And when a restaurant lowers its portions, I like get really angry because we've

Simone Collins: stopped our, we have this. [00:27:00] favorite restaurant in our area that it decreased its portion size. And we're just like, that sucks. We never get to go there again.

Yeah.

Malcolm Collins: I can't make two meals and stretch

Simone Collins: it into two meals. Yeah.

Malcolm Collins: So, I, yeah, I do want to highlight that that's probably what they're catching here is really just leisure spending. They did, as mentioned by other things, give away more money, 22 per month. Okay. They got 1, 000 and they gave away 22.

So generous. They had improved food security in the first year, but only in the first year. They had marginal increased use of dental care, as somebody else mentioned. More autonomy in decision making and job searching, whatever that means. By the way, for people wondering where this happened, it was Texas and Illinois across urban, suburban and rural areas.

The age range was 21 to 40 years old income qualification, household income below 300 percent of the federal poverty threshold, approximately 77 0. 25 K. So you could get into the purchase. The study of you had up to [00:28:00] 77, 000 in family income for family of four or 37. 5 for an individual average household, individual so what are your broader, like, to me, I used to believe in UBI. I was always like, we do need at least one big study on it. I am glad that he did the big study. I am sad that they are occluding the real results of the study. I wonder, for you, why do you feel that it did decrease people's earnings, incomes, financial security, and, yeah.

Simone Collins: Again, I, I, what I see on financial audit when this happens again and again, is it gives people a false sense of security and it makes them, it gives them the sense that, oh, my expenses are covered now. Like, oh, I have money now. Therefore, I can relax a little.

And these are people who already feel kind of constrained and stressed out. They're dealing with student debt. They're dealing with auto debt. They're dealing with personal loans. They are living paycheck to paycheck. And they're thinking, All [00:29:00] right. Well, like this is great. Like this means that I can let loose a little more, like eat out a little more.

And there's a lot of emphasis on like you pointed out. It's like eating out and indulging in pretty expensive things is actually, I would say more common among people of more limited means than it is among more wealthy people, like more wealthy people. We know like when we've hung out with wealthy people, they're like, No one eats out.

Yeah, everything's in and like bought from Costco or like some, like, and that's a luxury, you know, having a house where you can have a deep freezer, where you have space to store, like a giant bag of rolls of toilet paper is a luxury. Yeah. And I, I think that's, that's an issue, but like, yeah, like that, that's, that, that is what happens also with this whole thing of like, people said they were saving more, but they were in more debt.

I see that show up on financial audit a lot too, where people are like, well, don't worry, I'm saving like this much saved up. And then Caleb will be like, yeah, but you have 16, 000 in credit card debt at 21 percent interest. What are you doing? Like people don't realize or they don't see debt the same.

[00:30:00] So I bet people were racking up credit card spending and they were technically saving, like putting cash into a savings account. But then being more spendy with their credit card, because again, they had this false sense of security. So I think a lot of this comes down to financial literacy. I was watching and I don't, I

Malcolm Collins: don't, Simone, you can save financial literacy all you want, but functionally giving these people more money made them more financially insecure.

They had in the end. Yeah.

Simone Collins: Yeah.

Malcolm Collins: In total. So, I mean, I think that you can say it's a problem of financial literacy, but I think that the, the function of this is that it turns out, you know, when people are complaining about capitalism, they're like, well, capitalism is forced labor because you're sort of like scared into working.

They're like, yeah, you may not have a gun to your head, but, you know, You know, you have to deal with the fear of what happens to you. If the money stops coming in, it turns out that that's a key here. Part of making capitalism work. Then I think even the pro capitalist people realized, I think a lot of capitalists thought like, well, wouldn't it be nice if we [00:31:00] had something that was like capitalism, but without the gun to the head.

And it turns out when you remove the gun from the head, people end up just. Living more hedonistically and I need to point out here. They didn't even increase the time they spent with their kids. Like to me, like, that's the, like the cruel twist of the blade of how fundamentally selfish the average human is, but it also, I think, shows something that we talk about was having kids and everything like that, which is people are like, I can't afford to have kids.

I can't afford to spend time with my kids. And it turns out that no, you are choosing. How much time you're allocating to your kids and we have proof now that even if you had more money, you wouldn't spend more time with your kids and that the average person who's saying that is just diluting themselves.

They're going to go out to restaurants more. They're going to do little indulgent things and that's it. But I mean, I, I like, and I think that when you talk about this from a financial literacy perspective, [00:32:00] undersell. What this is saying one, one thing about human nature, which is that the way that you live life today, when people are like, if I had more money or if I had inherited money or blah, blah, blah, like I would be living a different life, like that's functionally untrue.

Like we know that from the data. Now, if you had more money, you wouldn't be living a better life. You would actually maybe be living a materially worse life. So. That's true. Second is UBI, if done at the societal level, is gonna, think of the effect this would have on, like, we're not even talking about the UBI, like, even if the UBI was free, it would have a negative effect on On GDP.

That's insane that if we could like force some other country to pay for UBI, it would have a negative effect on GDP, but it gets worse than that. What if you're talking about something like reparations and now means if reparations were to be paid as a form of UBI to the black community, it would permanently [00:33:00] monetarily sabotage the community.

Make them permanently more poor. It also means I mean, just the little things, the little things really got to me that these people went into more debt and everything like that. And I think it just removes like this for me, remove so many, I think I always try to give people the benefit of the doubt.

And when I say people, I don't mean individuals. I mean, I rarely give individuals the benefit of the doubt, but I mean, humans overall, like maybe humans aren't that selfish and dumb and narcissistic and the bed. If you just gave them, I was on a call recently because occasionally, we get called in to do meetings with like. Well known investors and the investor I happen to be meeting was on this one. I was on a call with a female investor who you all probably know, but I don't know if I'm allowed to say, but anyway, one of the guys on the call, because I was talking about the impacts of fertility collapse.

And we were talking about where [00:34:00] AI might end up impacting this. And I was like, well, I mean, functionally AI is going to make a certain portion of the global population obsolete. And his argument was, no, it won't make a certain portion of the global population obsolete. It'll make you know, you'll be able to give it to people in like these poor countries in Africa and make them as efficient as somebody in the developed world.

And I was like it's just not, I, I, and what I said, and I didn't mean to come off as derogatory about this. As I said, I think that you are surrounded by too many intelligent people. And I was like, I run a company that focuses on outsourcing travel management in Latin America. So I work with a lot of this type of person.

Well, no, we,

Simone Collins: we have, we have. Worked with talent in everywhere from Africa to Europe, to Asia, to Latin America that's central and South America and, and the United States. And I think the bigger problem, this isn't like people in other areas. The bigger [00:35:00] problem is that people who tend to be extremely educated and Working in very privileged, isolated communities, especially in investment that includes search funds, private equity, also tech funded like our sorry VC funded venture backed startups tend to get this myopic view that everybody is like them, which is to say that everyone is equally resourced, equally educated with as many countless years and hours.

Of education behind them, and therefore they have the same amount of potential if suddenly given the exact same resources, which is just not the case. Some of these people have just grown up so malnourished that even when given an additional 10 years of education, it's still going to take them a while to catch up.

Malcolm Collins: But it's not just that as a problem. Like, I'm even thinking about where I'm using AI. Everywhere that I use AI in my life is either something I would have hired someone else to do, or something I was hiring somebody else to do. It is never a case in which it significantly empowers somebody [00:36:00] else. We have a, on the margin here with our company where it improves people's English skills if they don't speak English, cause they can run it through and say, does this make grammatical sense in English, but those are employees just doing a slightly better job than they were doing before.

It's not like additional employees or additional work. Where. In fact, I would say that I probably in, in this last year probably saved 10, 000 I would have spent on outsourced talent just in my personal life.

Simone Collins: And that's, that's also universal. And the people being outsourced are not, I would say actually at this point, Maybe some low skilled workers are being displaced by AI, but more it's people who would be earning over 100, 000 who wouldn't, it would be exempt from this UBI experiment because the people who first and foremost, I'm seeing struggling to get jobs now are.

Like we'll say higher touch customer service representatives. [00:37:00] They're engineers, coders specifically, and they are analysts. And these are all very highly educated people. I can't remember which guy it was on the online podcast. But he was talking about how he made everyone at his firm set their new default tab to me, I think it was one of the latest versions of chat GPT.

Just to get them so accustomed to using it in place of a traditional search engine, but also utilizing it to do what an analyst would otherwise do. And that's what they're doing. They're basically realizing they no longer need analysts. Because all you have to do now is basically say, you know, tell me what this industry outlook is.

Look at these things and compile these reports. You know, give me the odds of this or that happening. And it's really, really good at doing that. So I would say this is, it's even, it's, it's a more dire picture right now for privileged people than it is for unprivileged people.

Malcolm Collins: I disagree with that. I think certain types of privilege, these people, and this is the thing that's the [00:38:00] difference, right?

And I think that this is what I told him that like, he fundamentally didn't. understand if I give somebody from one of these backgrounds, a simple task, like do this, then this, then this the odds that they will be able to complete that task is actually fairly low. They will complete it sometimes, not other times.

Sometimes they'll try to steal from you midway. Sometimes they'll decide that there's some other way it can be done that actually makes no sense. Given the context. Just like the level and routineness of extreme screw ups that you're not going to get from an AI is Insane. There is no reason for me to work with that.

I want to say, let's just talk about this podcast, right? In terms of like people losing their jobs and why we're not going to other people. I was looking to hire somebody to do our title cards. This was a job that I like interviewed people for now. I just do it with AI. Like that's the core thing.

Me plus AI, because me plus AI. When [00:39:00] you enhance the working abilities of like the smartest or most talented or most ambitious or most self starter people in society, they can do the jobs of tons and tons of other people. It turns out that like, if you lack this self starterness or like, it expands the potentiality of the most productive members of society.

Way more than it expands the potentiality of the average member of society or consider this podcast. Like as this podcast has grown, we're probably at the point now where most podcasts would be hiring like analysts or have fans do that. But if you look at this episode, how did I get the information for this episode perplexity?

You know, I go through, I'm like, Oh, what are all the arguments here? What are all the ways his study went wrong? What are all the, you know, and that's something I would have hired someone to do on Upwork before it wouldn't have been a high paying job, but somebody would have had that job. And I think that.

This misunderstanding of just how low functioning the average human is leads to really smart people who surround themselves with really smart people to make [00:40:00] really bad bets about what's going to happen in the future. But those bets are often very self serving.

Simone Collins: Yeah. I also, I think that some of this illustrates illustrates the importance of I will versus IQ.

That it really isn't about being smart or having the capability of something. And that's what people are also underestimating when looking. There's, there are people who are tracking, like, how does AI perform on intelligence scores now? Like, how intelligent is AI? And I will, like, AI does not have to be very intelligent at all to be more useful than even an intelligent person, because even intelligent people often don't want to follow instructions, don't care about following instructions, forget about instructions, you know, they, you can have the processing power, but the ability to follow through.

With humans is rare and wanting. And that's, that's why I think the people who ultimately win in the post AI world are not necessarily the most smart people. They're the most [00:41:00] ambitious, tenacious, voracious.

Malcolm Collins: People, that's why we built the Collins Institute the way we did, which is our school system for anyone who's watching this and doesn't know this, it's free for your kids.

But yeah, I mean, we need to foster those skills cause that's what matters in the AI era.

Simone Collins: Yeah.

Speaker 16: My wife and I built the Collins Institute, a comprehensive interactive map, or skill tree, comprising all of human knowledge. The platform is designed to be usable as soon as a student gets comfortable with reading, and goes about midway through a PhD in most subjects.

However, we built it to cover all human knowledge, meaning it covers a much larger domain than is taught in the traditional school system. Ranging from tort law, to hanging drywall, to the industrial transportation of grain, or aquaculture pharmacology.

 Click on a node to open it. The node will include a description of what knowledge is needed to pass its test, as well as a list of the best places to learn that information.

Vote on the sources that were most useful to you by clicking this button. To add an additional source, click this [00:42:00] button.

Malcolm Collins: Did you have any other takeaways? I guess one of my takeaways from this is I was really disappointed. Even, even I, who is regularly disappointed in the media, this was like a new level. This was like, Oh,

Simone Collins: well, this isn't just disappointing.

It feels. Creepily manipulative, especially in favor of Marxism. Because it's, it's not just like, oh, you guys didn't try. And, and I think we're very accustomed to lazy journalism. What we're not accustomed to is, and honestly, I think that there's a reality in which nobody actually tried to post misleading information about this.

And I say, this is someone, one of my flaws is that. I'm very trusting of other people and I can be trusting to the point of gullibility where if someone's kind and they're like, this is me, this is my background. I'm like, okay, great. And I take everything at face value. [00:43:00] And I also see then after that point, anything that they present to me is like confirmation of them being a great person.

And I think maybe what's happening here is, is a lot of these people are just so. Steeped in socialistic ideals that they just can't see anything that runs contrary to that reality. That they're so accustomed to realities in which universal basic income is the obvious correct answer and everyone knows it works well.

And this study is just going to show people in more granular detail how and why it works well that they literally can't see like muggles not seeing magic. They don't see the fact that people had lower net worth after being in the treatment group for this period. I really think that's more likely than them actively trying to mislead.

Malcolm Collins: I mean, look, like I want to consider this line. This is the line that gets me this sarcastic. Thanks for [00:44:00] reminding us of what we already know. Sam UBI makes overworked poor people less miserable. Like I hear you. But then are these people just like autonomous drones that need to be taken out? Like, are they, are they like contributory members of society or are they lesser than an AI?

And I think that that's something that I'm realizing. Well,

Simone Collins: Malcolm, these people are very unlikely to be those who are having kids. So I, I, I wouldn't worry about them too much in the long term and the short term we're getting to an age in which people who have strong biases like these are mostly preaching to the choir.

So they're not doing any damage because no one's listening to them. Like, in another conversa