I agree. Though that machine does solve some real world problems with wellfare. (Or would solve them.) There does not have to be an administrative overhead to decide who's going to get benefits or not. Only people who can't get more than the minimum wage will show up to crank (modulo job satisfaction, danger boni etc). Also you can also decide to crank only part-time to secure a base salary and e.g. be a free-lancing developer in the rest of your time --- again without administrative overhead or strange incentives.
In Finland (and probably some other countries with a similar welfare system), there is an ongoing discussion concerning a so-called citizen wage.
The basic argument is very similar to yours: replacing the existing rat's nest of situation-dependent welfare benefits with a flat sum that's paid out to everyone would be possible within the same budget constraints because it would eliminate so much administrative overhead and incentives to game the system, while freeing people to do something more useful with their time than filling out unemployment forms.
Of course the difference is that nobody would be required to crank a machine; everyone would simply get 300-400 euros from the government each month just for being alive. (Those who are employed would pay it back in taxes.)
It would be interesting to see somewhere try this, because I'm sure it would generate very different incentives than regular welfare. Some people will definitely walk out of work permanently and just live off the freebie. Others will use it for a few months to rest between jobs.
This would make the ramen-eating phase of doing a startup much easier, and the same for any creative endeavour that can be done cheaply but takes time. I wonder if there would be an explosion of art?
Unlike with regular welfare, there's a clear feedback loop between the amount of freebie, the number of people "retiring", and the extra tax burden placed on the people still working. At some level of income, this freebie would make working unattractive enough the system would collapse for lack of taxpayers. So there is going to be a continuous fight to keep the level at a sufficient pain point, versus humanitarians who point to the suffering this will cause.
I always liked the idea with a slight twist. A flat ~10% tax that's split back to everyone in society. If you consider the cost of SS, welfare, and the long term effects of increasing automation. I would assume it's a fairly stable system until people start messing with the percentage. This would also make it reasonable to switch to a flat tax with zero tax breaks.
Yes, it should be stable, because when enough people go voluntarily out of work, the pie gets smaller and so get the 10%.
There's an interesting suggestion by some landreformers of the late 19th / early 20th century. They say that the rent from land comes ultimately from the population density, so all land should be owned by community, but leased out to the highest bidder. The proceeds would be distributed equally to all. (Alternatively you can just have a high tax on real estate, that gets redistributed. Make it say, 10% of the value of the land anually. Owners get to announce the value of their land themself, but will have to sell their land at this value to any party, to avoid them setting too low a price. Of course the value of the land will be changed by the tax.)
I heard about this, too. There's also a discussion in Germany going on. Though the level should be closer to around 800 Euros here. That's close to what you get in welfare. Finland seemed more expensive too me when I went there a few years ago. I wonder whether you could live off the 300-400 Euros. Perhaps if your flat was paid for by some other scheme?
Finnish college students get 400 euros per month, and many are able to complete their education with no other income or parents' savings (college education is free once you're accepted). Besides students, the most basic level of welfare for those who get no unemployment benefits is also about 400 euros.
So it's not impossible to live with that kind of money in Finland, even though it's not enough to rent an apartment in the center of Helsinki. You're probably going to be eating a lot of potatoes or pasta...
The political reasoning is not really that "citizen wage" should be good enough for most people, but rather that it would be unaffected by any additional income. Currently there's really no incentive to get a job that only pays 1000 eur/month: you can get that much by pretending that you're looking for work, and those benefits would be lost if you started working. With citizen wage, you could reach that 1000 eur/month income by getting a 600 eur/month job.
Finland has a major problem with persistent unemployment. It's hoped that these low-skilled workers would become more employable under the citizen wage scheme as they would have the financial motivation to seek low-wage and part-time jobs.
I found even groceries in Oulu expensive compared to German levels. In Germany you get around 650 Euro for studying, if your parents and you have not enough income. (This includes ca 150 Euro child benefit, that students are eligble to get (until they are 26 or so).)
In the east you can live a comfortable student's live on this. Though you would be hard pressed to afford rent in Frankfurt or Munich, I guess. (Perhaps you can make it work by sharing a flat with 4 people, or living far out of town.)
I am all for citizen's wage. (Or basic income. Whatever you call it.) We decided to have these levels of welfare in western Europe anyway. So we can get rid of a lot of administrative overhead and breaks of privacy. Of course average earner will have to pay exactly that basic income back in taxes. (Plus other expenses of the state that don't go into basic income.)
