Review of Charles Murray’s “In Our Hands: A Plan to Replace the Welfare State,” from 2009

This Review was originally published in the Review of Political Economy, December 6, 2009. It’s reproduced here as originally published.

In Our Hands: A Plan to Replace the Welfare State, by Charles Murray, Washington, DC, AEI Press, 2006, 230 pp., $20.00 hardcover ISBN 0-8447-4223-6

Charles Murray is not known as a friend of the poor. His 1984 book, Losing Ground argued that the government should ‘zero-out’ all programs designed to help the poor. His 1994 book, The Bell Curve (co-authored with Richard Herrnstein) used questionable methodology purporting to show that people are poor because they are less intelligent than average and that blacks are disproportionately poor because they are genetically less intelligent than whites. If racism is the belief that your race is mentally or physically superior to others, The Bell Curve is a racist book. Yet, his new book, In Our Hands: A Plan to Replace the Welfare State, Murray puts forth a plan to provide more healthcare, more retirement security and more actual income to the poor with no supervision or conditions attached.

            For those familiar with universal basic income, Murray’s proposal sounds very familiar. Murray calls it ‘the Plan,’ saying, ‘I have not been able to contrive a better name,’ but it is essentially a version of the program known as ‘basic income,’ which
has been widely discussed by political philosophers in the last twenty years. Basic income is a regular government-ensured grant provided to every citizen on an individual basis without a means test or work requirement. People with middle or higher incomes pay more in taxes than they receive in the grant, but everyone receives the grant in cash every month. A great deal of literature has appeared on basic income in the last twenty-five years. Basic income is similar to, but not quite the same as, the negative income tax, which was widely discussed in the United States in the 1960s and ‘70s. The major difference between the two is that the negative income tax is given only to net recipients and phased out for people who earn above a certain amount, so that no one both receives a grant and pays income taxes. Both programs are ‘guaranteed incomes’ in the sense that they are designed to ensure that everyone has a small but reliable income, and both programs eliminate ‘the poverty trap’ in which some people find that they can attain a higher income by not working than by working.

            Murray cites some of the literature on the negative income tax, but he appears completely unaware of the basic income literature, giving the impression that he reinvented the idea independently. When he discusses people who might drop out of the labor market, his example of what they might do is surf. This example is well-known in the basic income literature from an exchange between John Rawls and Philippe Van Parijs, neither of whom is cited by Murray. Is it a coincidence or is he merely neglecting to connect himself with that movement?

            The Plan is most similar to a little-known basic income proposal by Leonard Greene, and elaborated by Irwin Garfinkel, although this connection is probably coincidental. Both Murray and Greene propose canceling everything the US government is currently doing to support individual incomes and use all of that money to finance a basic income for every citizen. The Plan is not quite a universal basic income. Only people age 21 and over are eligible, but it is a basic income in the sense that it has no means test and it is given to everyone who reaches the age of eligibility regardless of income.

            Murray promoted the book and the Plan with several lectures in 2006. When questioned whether a guaranteed income is an affront to the work ethic, he responded, ‘You’re a conservative. I’m a libertarian.’ But make no mistake, Murray is profoundly conservative. His books have blamed the welfare state for everything that a conservative might find wrong with modern society, from welfare dependency though unwed motherhood to a decline in ‘man’s’ ability to craft a meaningful life. Many of the benefits he expects from the Plan align with conservative goals. He believes it will lead more people to attend church, more people to support private charities, and more of the poor to adopt the superior values of middle- and upper-class people.

            Many people were shocked that a man who wrote a book arguing to zero-out the welfare state would put forward a plan for a basic income and universal health care. But it should not be completely surprising. Murray was sympathetic to the negative income tax in his contribution to Lessons from the Income Maintenance Experiments; and in What it Means to Be a Libertarian, he wrote that some form of income guarantee was the next best thing to the complete elimination of redistribution.

            There is in fact a long history of free-market conservatives who have seen an income guarantee as a streamlined, conservative alternative to the complex, conditional welfare system. F. A. Hayek and Milton Friedman promoted the negative income tax on those grounds, and it seems to have been part of the motivation behind Richard Nixon’s watered-down negative income tax proposal in 1970. Most recently, Governor Sarah Palin pushed through a bill for a one-time increase in Alaska’s regular basic income (the Alaska Permanent Fund) from $2000 to $3200 per person per year. The free market appeal of an income guarantee is twofold. From the point of view of taxpayers, conditional welfare programs waste a large percentage of their budgets in overhead cost that could be saved under an income guarantee. From the point of view of the recipients, the rules and constant oversight of a conditional welfare system can be humiliating and oppressive.

            Murray’s earlier books give the impression he believes that the poor are unproductive, genetically unintelligent people with bad values who have babies just to get welfare checks. One might therefore wonder why he cares about freeing the poor from oppressive government supervision. The answer is that while Murray seems to believe capitalism is a near-perfect meritocracy and that the poor are genetically inferior, he honestly believes that the poor should be free and that humiliating supervision by government bureaucrats cannot make the lives of the poor better. This kind of thinking led Murray to reinvent basic income.

            This book—typical of Murray’s research—seems designed to give laypersons the impression of broad knowledge while having little concern with giving that impression to people who know the field. It is a thin volume with lots of numbers and footnotes but without a deep understanding of the research he cites. His discussion of the negative income tax is a case in point. He is aware that Milton Friedman supported the idea and that experiments were conducted on it, but he misstates what a negative income tax is and what the experimental results were. He gives the impression that a negative income tax has a 100% take-back rate, meaning that for each dollar earned privately recipients lose one dollar of their grant. If so, recipients who make money in the private labor market are no better off financially unless they get a job that pays more than the entire grant (pp. 8–9; 74). Almost no one who supports the negative income tax supports this draconian variant. Friedman supported the negative income tax largely because it could be designed to eliminate the work-incentive problems of conditional welfare programs, and none of the experiments tested a 100% take-back rate. Murray also implies that the experiments found evidence that large number of recipients dropped out the labor market. In fact, none of the experiments found evidence that anyone dropped out of the labor market. The relative decline in hours for the experimental group was 2–9% among primary wage earners and up to 20% for mothers of young children, but none of this relative decline represented anyone ‘dropping out’ of the labor market. It was instead attributable to people who happened to become unemployed taking longer to find their next job. Perhaps most importantly, the relative decline of work hours was not always an absolute decline. The largest predictor of whether recipients worked was not whether they were in the experimental or control group but the health of the economy. The people who conducted the experiments concluded that the work disincentive effects were small and did not put the viability of the program at risk.

            Murray has not been careful with the facts, but is his plan a good one? Is the Plan a good workable idea that people who actually have sympathy for the poor could support? The answer is mixed. It is small; $10,000 per year minus $3,000 for mandatory private health insurance minus $2,000 for possibly mandatory retirement savings with no additional provision for children’s healthcare. That is, $5,000 per year ($416.67 per month) if retirement savings is mandatory and $7,000 per year ($583.33 per month) if it is not mandatory—for each adult whether she lives alone or with children. A single parent will be able to sue for child support out of the grant to the noncustodial parent, and so might have access to something in the neighborhood of $833.33 per month for herself and her children. But even an adult with no dependents is well below the official poverty line of $9,359 if she tries to live on $5,000 a year. (Following Murray, I’m using 2002 figures.)

            Murray’s typically conservative response is that they can double-up with friends and relatives and they can all go out and get jobs at minimum wage. He calculates that when you add $583.33 to the income from a minimum wage job it would get most people—even single mothers with one dependent—out of poverty. He neglects to mention that this strategy involves mortgaging their retirement savings so that they will be more than $4,000 below the poverty line in retirement if they do this every year. He also neglects to mention that he is an opponent of the minimum wage. Since the whole idea of getting rid of the minimum wage is to enable employers to pay their workers less, we can assume that all of his calculations about how well off the recipients will be after they get these jobs are overestimates. He also neglects the very possibility that unemployment might exist, that the market may not be able to absorb the millions of new entrants to the labor market he hopes to see, and that most single mothers cannot work full time or in many cases even part time.

            Consider a single mother with three dependent children at ages that make it difficult if not impossible for the parent to work outside the home. Her poverty threshold is $18,307. If she’s on her own and retirement contributions are mandatory, her income ($5000) is less than a third of the poverty threshold. If she can effectively sue the father for his entire grant (an optimistic assumption), she can increase her income to $10,000. If she and the father both mortgage their retirement savings, she can get up to $14,000. That is probably enough to keep her family off the street, but it is still more than $4000 below the meager US poverty line. Murray suggests combining incomes is as a solution. If she cohabitates with another mother in exactly the same situation, their combined income is $28,000—still $1,600 below the poverty threshold for a two parent family with six children of $29,601.

            The grant is too small to give a dignified life to the poor without at least the addition of a child grant, but is it better than the current system? I have to admit that on this point, I am inclined to agree with Murray. As horrible as it sounds, in most states, TANF recipients work for less than they would get unconditionally under the Plan. Many people who aren’t eligible for TANF, SSI, or Unemployment Insurance get far less or nothing at all. Even the small grant of $416.67 a month can help many people get by if it is unconditional and tax free. The Plan would save many people from the utter destitution and homelessness that they experience in the United States today. On top of that, a retirement fund of $2000 a year put into a protected savings system would make for a better retirement than many Social Security recipients experience today, and $3,000 per capita could buy basic universal health coverage, solving one of the most important problems in American society today. If the Plan were put in place now, maybe we could eventually get the benefit increased to a decent level. Therefore, despite all of its faults, the Plan would be an improvement for many people living at or near the margins in the United States.

The Prehistory of Private Property: A video introduction to the new book by Karl Widerquist and Grant McCall

The Prehistory of Private Property: A video introduction to the new book by Karl Widerquist and Grant McCall

This short video introduces the new book, The Prehistory of Private Property, by Grant McCall and me. The book examines the origin and development of the private property rights system and the experiences of peoples who have lived in other systems to debunk three false claims commonly accepted by contemporary political theorists. These false claims are: (1) Inequality is natural and inevitable, or egalitarianism is unsustainable without a significant loss in freedom. (2) Capitalism is more consistent with negative freedom than any other conceivable economic system. (3) Private property is somehow “natural,” meaning that when free from interference people tend to appropriate and transfer property in ways that lead to a capitalist system with strong, individualistic, and unequal private property rights.

The book presents a great deal of anthropological and historical evidence that show that all three of these claims are false: (1) Many societies known to anthropology have maintained egalitarianism and freedom. (2) The least free people under capitalism are significantly less free than people in societies with common access to resources. (3) The first people to “appropriate” property tend to share resources; the elite private ownership system was forced on the world by the colonial and enclosure movements beginning only about 500 years or so ago and not fully complete yet.

The book is not primarily about Universal Basic Income (UBI), but it attacks many arguments used against UBI and other forms of redistribution. It also makes a brief case for UBI in the very last chapter, as the video explains.

As a bonus, early in the video, if you look closely, you can see Alexander de Roo eating breakfast in the background.

Thanks to Ali Mutlu Köylüoğlu for inviting me to give this talk and for recording and posting it.

-Karl Widerquist, Morehead City, North Carolina, June 17, 2020

Punk Band Records a Song with Indepentarian Argument for Basic Income

Punk Band Records a Song with Indepentarian Argument for Basic Income

Indepentarianism exists. The Danish punk band, Husligt Arbejde [House Work] has recorded an indepentarian song, “Borgerløn – the power to say no,” which translates into “Basic Income – the power to say no.” According to Google translate, the band describes its music as “aggressively political, minimalist punk.”

“Indepentarianism” is the theory of justice I began to lay out in several works including my book, Freedom as the Power Say No. Universal Basic Income plays an important role in that that theory. I was overwhelmed to find the idea has made it into a punk song. I thought it might be a coincidence. (It’s a basic and obvious argument for UBI.) But I contacted the band and sure enough, the song was about the book.

Most of the song is in Danish. Only one line, “the power to say no” is in English, but they say it over and over again. The lyrics are below in both Danish and English.

Original Danish lyrics:

Kan en luder sige nej?
power to say no, power to say no
Kan en ansat gå sin vej?
power to say no, power to say no
Må en fattig bøje sig?
power to say no, power to say no
Er man fri uden sit nej?
power to say no, power to say no

BORGERLØN FOR BORGERFRIHED
BORGERLØN FOR BORGERFRIHED
BORGERLØN FOR BORGERFRIHED
BORGERLØN FOR BORGERFRIHED

Staten si’r den elsker dig
power to say no, power to say no
mens den strammer garnet om dig
power to say no, power to say no
Løb for vækst og BNP
power to say no, power to say no
“ellers går systemet ned”
power to say no

, power to say no

BORGERLØN FOR BORGERFRIHED
BORGERLØN FOR BORGERFRIHED
BORGERLØN FOR BORGERFRIHED
BORGERLØN FOR BORGERFRIHED

Liberal politik
power to say no
det var det vi aldrig fik
power to say no
Hvad er egentlig faktisk frihed?
power to say no
Det er økonomisk frihed!
power to say no

, power to say no

BORGERLØN FOR BORGERFRIHED
BORGERLØN FOR BORGERFRIHED
BORGERLØN FOR BORGERFRIHED
BORGERLØN FOR BORGERFRIHED

Velfærdsdamer, kontorister
power to say no, power to say no
Arbejdsprøvning, tusind lister
power to say no, power to say no
BU-REAU-KRA-T
power to say no, power to say no
Vi vil hel’re være fri!
power to say no, power to say no

BORGERLØN FOR BORGERFRIHED
BORGERLØN FOR BORGERFRIHED
BORGERLØN FOR BORGERFRIHED
BORGERLØN FOR BORGERFRIHED

English lyrics, translated by the band:

Can a whore say no?
power to say no, power to say no
Can an employee go his way?
power to say no, power to say no
Must a poor man bow?
power to say no, power to say no
Are you free without your no?
power to say no, power to say no

BASIC INCOME FOR BASIC FREEDOM
BASIC INCOME FOR BASIC FREEDOM
BASIC INCOME FOR BASIC FREEDOM
BASIC INCOME FOR BASIC FREEDOM

The state says it loves you
power to say no, power to say no
while tightening the yarn around you
power to say no, power to say no
Race for growth and GDP
power to say no, power to say no
“otherwise the system will crash”
power to say no, power to say no

BASIC INCOME FOR BASIC FREEDOM
BASIC INCOME FOR BASIC FREEDOM
BASIC INCOME FOR BASIC FREEDOM
BASIC INCOME FOR BASIC FREEDOM

Liberal politics
power to say no, power to say no
That’s what we never got
power to say no, power to say no
What is real freedom?
power to say no, power to say no
It is financial freedom!
power to say no, power to say no

BASIC INCOME FOR BASIC FREEDOM
BASIC INCOME FOR BASIC FREEDOM
BASIC INCOME FOR BASIC FREEDOM
BASIC INCOME FOR BASIC FREEDOM

Ha! Welfare ladies, clerks
power to say no, power to say no
Work testing, a thousand lists
power to say no, power to say no
BU-REAU-CRA-CY
power to say no, power to say no
We’d rather be free!
power to say no, power to say no

BASIC INCOME FOR BASIC FREEDOM
BASIC INCOME FOR BASIC FREEDOM
BASIC INCOME FOR BASIC FREEDOM
BASIC INCOME FOR BASIC FREEDOM

This isn’t the only Indepentarian song. Years before I began writing philosophy, when I was living in New York, going to school, and playing in bands, I was already formulating ideas along these lines, and some of them came out in my song, “The Home of the Fat Homeless.”

The lyrics are contained in the picture below (toward the bottome left):

Common Arguments Against Basic Income Don’t apply to the Emergency BI

‘Most economists will agree that the economy needs injections of cash right now.’

The economy needs injections of cash right now

The Guardian newspaper asked me to write an opinion piece about the Emergency Universal Basic Income (UBI). They changed my headline but otherwise, printed it as I wrote it.

America is in crisis. We need universal basic income now. By Karl Widerquist, the Guardian, 20 Mar 2020

I’m reprinting it here in full:

A few members of Congress recently have suggested that the United States government institute an emergency Universal Basic Income (UBI) in response to the twin crises of coronavirus and the stock market collapse, which many economists believe could signal the start of a significant recession. UBI provides an unconditional sum of money from the government for permanent residents whether or not they work. Proposals for an emergency UBI vary. One common suggestion from lawmakers is $1,000 a month for adults and $500 a month for children for four months or more if the coronavirus persists. This amount would be an enormous help in this crisis.

 

I’ve studied UBI for more than 20 years, and I find that opposition to it usually comes down to two main arguments: that everyone should work or that we simply can’t afford it. Whether these are valid or invalid arguments against UBI in normal times has been debated for decades, but they simply don’t apply to the emergency UBI during the current situation.

 

Right now, we don’t need everyone to work. In fact, we need a lot of people to stop working. We don’t want food service and healthcare workers who might be sick to go into work and infect people because they can’t afford to stay home. In an economy where millions of people live paycheck-to-paycheck, an emergency UBI would give non-essential employees the opportunity to stay home during the coronavirus outbreak, slowing the spread of the disease. The more people we have who can afford to stay home the better off we’ll be, at least for the duration of the outbreak.

 

Most economists will agree that the economy needs injections of cash right now. When economies slide into recession, there is a “multiplier effect” as people lose their jobs and businesses contract, they spend less. Other people then lose their jobs or contract their businesses, and this multiplier effect continues. The economy shrinks, income declines, and money literally disappears from circulation.

 

Governments can help stop this process by creating money and injecting it into circulation. After the 2008-2009 economic meltdown, the United States government and governments around the world created trillions of dollars worth of currency out of thin air and injected it into the economy, usually by buying back their own debt, in an effort to stimulate demand and reverse the multiplier effect. Buying back government debt isn’t necessarily the best way to stimulate the economy, however. The money goes mostly to people who are already rich, and they have very little incentive to invest that money when everyone else is losing income.

 

An emergency UBI is just about the best economic stimulator that exists in modern times because it gets money in the hands of everyone. No one’s income would go to zero due to stock market-related layoffs or corona-related precautions. That income helps people maintain some of their spending, which helps prevent others from losing their jobs through the multiplier effect.

 

Congress should act now. An emergency UBI, providing $1,000 per adult and $500 per child, per month, for four months or as long as the outbreak lasts, can help everyone get through this critical time. The sooner our government acts, the sooner we start to recover. We don’t know how bad coronavirus will get. We shouldn’t have to worry about how we will be able to buy food and pay rent as well.

 

 

The economy needs more money and less labor.

 

We need people to spend money.

 

And we don’t need them to work for it.

 

 

CNBC Interview of Karl Widerquist on Emergency Basic Income

Annie Nova, “How the Trump cash infusion would help millions of Americans: Interview with Karl Widerquist.” CNBC, Mar 18 2020

Coronavirus precautions in California

Empty streets in California

Annie Nova, of CNBC, recently interviewed Karl Widerquist to ask about proposals for an Emergency Universal Basic Income during the twin crises of the coronavirus and the stock market meltdown.

To prevent millions of Americans from running out of money amid the coronavirus, the government has announced plans to send out checks to them soon.

When Treasury Secretary Steven Mnuchin made the announcement about the cash infusion on Tuesday, universal basic income proponents felt validated. Now, the group of those calling for such a policy, if only in a temporary rendition, is quickly growing. Already some 1 in 2 Americans say they support a program in which the federal government sends out regular checks to everyone, regardless of their earnings or employment.

Tech entrepreneur and former candidate for president Andrew Yang centered his campaign on a $1,000 universal basic income. He dropped out of the Democratic primary last month, but now the hashtag #YangWasRight is taking off on Twitter.

As the pandemic forces schools and businesses to empty, Democratic senators, including Cory Booker of New Jersey and Sherrod Brown of Ohio, have called for immediate $2,000 payments to adults and children below a certain income threshold. Meanwhile, Sen. Mitt Romney, R-Utah, proposed giving every American adult $1,000.

CNBC spoke with Karl Widerquist, an associate professor at Georgetown University-Qatar and a founding editor of the journal, Basic Income Studies, about how a cash infusion could help Americans. (The interview has been edited and condensed for clarity.)

Annie Nova: Why do you think the Trump administration is considering sending cash directly to Americans? 

Karl Widerquist: Some people have no other choice but to go to work, whether they’re sick or whether their child is sick, and it’s really not good to keep this threat over the heads of our entire working class. But the economy needs money and it needs money to go into the hands of people who will spend that money.

AN: Why is this policy preferable to the payroll tax cut the administration was also considering? 

KW: The payroll tax is slower to take affect and it only effects formal workers. Informal workers, contract workers, the self-employed, single parents, children and the homeless need this money more than anyone else, but they’ll be left out by the rebate.

AN: How would a cash infusion make this less of a crisis? 

KW: In very important ways. You’ve got a bunch of people who’ve been told, ‘Don’t go to work. Stay home. We don’t need you to wait tables and cook meals.’ And these people need to eat. That’s the first line. But it also has ripple effects across the entire economy. The stock markets are tanking, in such an enormous and rapid rate, that it implies we’re going into a very steep recession right now. During a recession, not everyone can find work, but we need them to keep up their spending because when they don’t spend, then the businesses where they buy stuff, they lose money and they go out of business. That increases unemployment. It’s what we call in economics a multiplier effect. So a universal basic income is going to keep people working by keeping people spending.

Annie Nova

Annie Nova, CNBC

AN: These proposals often call for giving children money, too. Why?

KW: We give money for children because that’s why parents work. Parents have to go into work because their children need food, shelter and clothing. They need to pay the rent for the rooms in which their children live. If a bunch of people are having to stay home from their jobs, if they’re unable to pay their rent and if they’re unable to buy food, their children are going to suffer.

AN: Sen. Romney recommended a $1,000 payment. Some Democrats up to $4,500. How much is enough? 

KW: Replacing people’s entire income is not necessarily what you want to do. That preserves existing inequality. If I’m staying home from my  $100,000 a year job as a university professor, and the person next to me is staying home from their job as a minimum-wage dish washer, I shouldn’t get any more than they do. What you want to do is stop income from collapsing, and the best way to keep it from collapsing is to make sure everybody has a minimum amount.

AN: What could go wrong with the payments? 

KW: I’m a little worried about the conditions. When you put conditions on at a time like this, when we’re in an emergency, there are problems. You waste money on figuring out who’s eligible and who isn’t and then you make mistakes. You’re going to give it to some people who don’t deserve it, and you’re going to deny it to some people who do.

AN: You have politicians on the left and right getting behind this cash infusion. Does that surprise you? 

KW: The increasing polarization in this country is really sad to see. Hopefully, once in a while, we still can pull together. Both sides of the aisle are recognizing this is really a double crisis, with coronavirus and the stock market collapse happening all at the same time.