Before beginning this essay, let me describe the people about whom I am speaking when I use the term “liberal”. In the American 21st century context, I am essentially describing the people you would likely find in the leadership of the Democratic party. Despite the conservative view of mainstream liberals as radical socialists, they are, at most, cautious reformers. Even that probably goes too far. The way they depict themselves, and probably actually see themselves, is as people who believe in the system, but want it to be fairer, more compassionate, and more efficient. When viewed systematically, the most important of those is efficiency. A look at policy reveals that the primary aim of liberals is using the government to make capitalism work better and more efficiently. This also applies to seemingly non-market concerns like welfare benefits, civil rights, and education.
Let us look at equal pay and anti-discrimination labor laws for women. Some economic theorists on the right argue that such laws are unnecessary. According to them, the market would automatically correct any form of discrimination. If sexist employers refused to hire women or paid them significantly less than their equally skilled male counterparts, other employers would exploit the opportunity to hire the women at higher wages. The productivity gains of the fairer employers would lead to emulation and competition for women workers until parity with men is achieved.
Liberals usually respond by appealing to empirical reality. If this argument were true today, it would have also been true in 1910. We know there was sex discrimination then, as there continues to be today. If markets corrected inefficiencies by themselves, there would never have been any gender discrimination. But liberal arguments do not contradict the claim that sex discrimination is inefficient. Laws preventing gender discrimination may be just and compassionate, but they also make markets work more efficiently. Eventually, laws against gender discrimination turned out to benefit employers as much as they benefited women. In the documentary Inequality For All, Robert Reich showed that employers took advantage of the growing numbers of women in the workforce competing with men for the same jobs, and this was one of the factors that eventually lead to the leveling off of real wage growth that began in the United States in the late 1970s and early 1980s .
This analysis applies across the range of policies pushed by liberals. Consumer protection laws and tort laws may protect and compensate consumers, but they also encourage trade by making it easier to trust strangers in the market. Public health care and education saves and enriches people’s lives, but they also produce a skilled and healthy workforce for employers. Laws that support strong unions help the workers themselves, but they also increase workers’ wages so that they can spend more as consumers. Infrastructure projects provide public goods that are used by all, but they notoriously prioritize the needs of businesses over the needs of the disadvantaged communities where they are inevitably built.
What about same-sex marriage? It is crucial for social justice, but does it help market efficiency to allow people to marry whom they wish? No, it does not, and that is why same-sex marriage provides a useful counter-example. The fact is that same-sex marriage was never really a mainstream liberal goal. Nor was it really a goal of the large mainstream gay rights organizations. Both the politicians and the organizations focused on getting anti-discrimination laws passed, which do serve market efficiency as previously noted. Same-sex marriage as a goal arose from the gay and lesbian grass roots and was pursued more through the courts than through legislation. As late as 2008, all three top contenders for the Democratic nomination for President declared their opposition to same-sex marriage. The speed and enthusiasm with which virtually all of the top Democrats reversed their positions the moment same-sex marriage polled over 50% could certainly cause a person to doubt the sincerity of their previous opposition. But to blame that insincere opposition on political cowardice would be to miss the point. Professional politicians fight uphill battles against initial public opposition a lot. But they also have to pick their battles. And however much powerful liberals may have secretly sympathized with the plight of their gay and lesbian friends who wished to marry, they were simply not going to prioritize a political battle for social justice that would not increase market efficiency, grow the economy, and enrich their campaign donors.
So where does this leave us with basic income? To answer this, we need to examine how liberals approach welfare in general. It is certainly true that they support much more generous benefits than conservatives, they also tend to be even more concerned with separating the deserving poor from the undeserving poor than conservatives, whose main concern is turning whatever welfare spending that does exist into a way to funnel that money into corporate coffers. Liberals usually support robust Earned Income Credits, a kind of negative income tax limited to low wage earners, dropping off quickly above the poverty line. They support benefits for children and the elderly as well as the disabled, although they can be extremely strict about whom they consider disabled. They will give welfare benefits to unemployed single parents sparingly, on a temporary basis, and require education or employment search conditions designed to get the parents back to work as soon as possible. Drug and alcohol abuse are seen as reasons to cut off benefits. For unemployed working age adults, liberals sponsor “Care Not Cash” initiatives, which replace cash benefits with direct services, in the few localities that offer any benefits at all.
The pattern is clear: liberals believe that humans have value primarily as engines of production and consumption. Within this view, welfare is a legitimate tool to push people into the labor market. This ensures that goods and services can be produced. Those who do work and those incapable of working are to be given a sufficient income to take them slightly above the poverty line. This appears compassionate, but the systemic reason is to ensure that they have just enough money that they spend all of it. This way there is sufficient demand for goods and services to be produced, but people can not save enough money to become capitalists or be able to leave the workforce. Indeed, virtually all public assistance programs cut off recipients with any significant savings. While conservatives fight for the direct interests of the capitalist class, liberals fight for the interests of the capitalist system.
I understand that few liberals consciously believe and support the goals and beliefs which I ascribe to them here. They believe they are compassionate people who want to make the system work better for the unfortunate. That is probably true. But it does not matter. Like with institutional racism, the conscious intent of the participants does not matter; it is their actions and the results that matter. And the fact is, if you assume that the primary concern of liberals is market efficiency, you will predict their actions better than if you assume that their primary concern is uplifting the downtrodden or achieving economic and social justice.
Let us look at one more example before we turn to basic income: the minimum wage. One obvious way that the minimum wage fits the pattern I have described is that you have to be employed to benefit from it. A less obvious way is that it looks free, but it is actually a tax that is passed on to consumers, so it is the middle class that pays for it, not the capitalist class.
But the most striking way that the minimum wage fits this pattern is when you look at its amount. Democrats pick a new number every seven to twelve years. They refuse to index it to inflation so they can have at least one winning issue against Republicans every decade. Opponents of raising the minimum wage always mock the arbitrary nature of the new number picked and ask something like, “Why not $100 per hour?” Liberals typically dismiss this mockery with empirical evidence, pointing out that raising the minimum wage has almost never resulted in a loss of jobs, and sometimes results in increased employment due to increased demand.
But as with anti-discrimination laws, just because right-wing critics are empirically wrong does not mean that they do not have a point. What criteria do liberals use to determine how much the minimum wage should be? $100 per hour likely would wreck the economy. But if $10.10 per hour, the current consensus goal of the Democratic Party, would have no ill effects, why not fight for $15, or $20, or $25? Why not commission a study to determine the maximum sustainable minimum wage? Applying the principle that liberals are working to support the capitalist system, we can see where they get their numbers. Liberals pick a minimum wage that puts workers near the edge of the poverty line, where they can be good consumers but never save enough to exit the workforce.
So what can we expect from liberals in the fight for a basic income?
We can start with two broadly optimistic points. First, since liberals are concerned with efficiency, evidence can sway them, and the scientific and empirical evidence is strong that a basic income is cheaper to administer, raises health and education outcomes, and does not cause people to quit working and live an idle life. Masses of healthy and educated people working and spending money churns the economy, and this is good for the capitalist system.
Second, liberals will join the basic income cause with little hesitation when the technological unemployment crisis starts receiving mainstream media attention. While liberals will tolerate significant unemployment because it keeps down labor costs, they will see too large a number of unemployed as wasted potential consumers. This will be especially true if more workers are not actually needed to produce the goods and services that the unemployed could otherwise buy.
Now the caveats.
Let me start off with a particularly American concern. Despite the significant libertarian origins of and current support for a basic income, many people hear the idea of the government giving everyone free money and they think, “socialism”. And in America, this is a problem. Despite the good arguments that could be made that the United States in the 1950s and 1960s had the most socialist economy that has ever existed in human history, America during the Cold War defined itself in opposition to “socialism”. For many, fear of the label has stuck. Conservatives still use “socialism” as an epithet for economic policies they oppose, and many liberals will do or say whatever is necessary to avoid being associated with socialism. If you ask prominent liberals, they will point to surveys showing the unpopularity of socialism in America. This could be a chicken and egg problem: why should most Americans not be afraid of socialism if even liberal leaders oppose it? Fortunately, this also appears to be a generational problem that is going away. Recent surveys of Americans under 30 show support for socialism to be equal to support for capitalism, and the Presidential campaign of Bernie Sanders may be showing that fear of the label “socialism” is overblown.
The next problem with liberals will be to educate them. The facts being on our side will not help if establishment liberals do not know them. The specific problem here is that the misrepresentations of the work participation and family stability effects of the Negative Income Tax experiments that were spread in the mid 1970s are still believed by many establishment liberals. We will have to work hard to correct those misbeliefs.
Another problem will be that if technological unemployment does not reach a crisis point, liberals will simply not prioritize basic income on their own. They will have to be dragged into taking action by political pressure. This will be similar to the example of same-sex marriage, except that instead of claiming opposition up until the public changes its mind, look for liberals to vocalize general support for the concept of a basic income, but not do anything about it. An example of this strategy was how, in the years following the U.S. invasion of Iraq, a lot of politicians of all stripes, including President Bush, voiced support for setting up an Alaska style trust fund to pay oil dividends to all Iraqis, but it never happened. This will be because, even if liberals come to agree that a basic income would be a better policy than the current welfare system, the efficiency benefits to the capitalist system are not great enough to put it on their priority list. Just as the suffering of gays and lesbians who wanted to marry was not sufficient cause to make same-sex marriage a priority, neither is the suffering of the poor. It never has been in the past. Again, this will change when technological unemployment becomes a crisis, and there will not be enough consumers to buy goods and services without a basic income.
The final, and biggest challenge with liberals as allies will be their attempts to dilute the idea of a basic income. While they may become far more generous with the cash amounts, it will be difficult for them not to attach strings and conditions. The reason is that it will be difficult to change their belief that they know how to run the lives of the poor better than the poor themselves. But a bigger danger is that they will try to insist on means-testing. They will try to make the middle-class believe that means-testing will make it cheaper for them. The reality is that means-testing will make the financial burden of a minimum income fall on the middle-classes. This, again, is because the goal for liberals is not economic justice, but making the current capitalist system run better.
In order to relieve the immediate suffering of the poor and establish the principle that poverty is not tolerated in our society, it may be necessary to agree to means-testing to pass an initial guaranteed minimum income. Liberals will trumpet that the job is done. Those of us who count justice as one of our goals need to be prepared to continue the fight.
[The following is an excerpt from a book in progress, The Poverty Abolitionist’s Handbook.]
Q: Basic income seems like such a fringe idea. I do not want to waste my time on something that is not going to happen. Is a basic income politically feasible?
Image via FMDam.org.
A: In the U.S. Presidential campaign of 1972, both incumbent Republican Richard Nixon and Democratic challenger George McGovern included versions of a basic income in their campaign platforms. In 1988, two men in Indiana sued for a license to marry each other, and the judge not only threw out the case, but also levied a fine of $2,800 on the men for wasting the court’s time with a frivolous lawsuit. The judge wrote that the plaintiffs’ “claims about Indiana law and constitutional rights are wacky and sanctionably so.”(1) Today, it may seem like basic income could never be taken seriously by mainstream politicians and it is hard to remember just how much of lunatic fringe idea same-sex marriage was one generation ago. But with all of human history against it, activists moved the zeitgeist in favor of same-sex marriage in just one generation. With hard work, poverty abolitionists should be able to advance public opinion back to where it was in 1972.
And we are making progress. In 2014, the idea of basic income received more media attention and support from political leaders around the world than at anytime in the past 30 years. And as the slowly growing crisis of technological unemployment demands attention from political leaders, basic income will be discussed more and more openly as the only practical solution.
Do I really believe there is a reasonable chance of a basic income being adopted in the United States in the next five years? Sadly, no. But with hard work, adoption in the United States in 20 years is certainty feasible. And even if it takes 50 years to abolish poverty, would not that be worth it?
(1)Arthur Leonard, Judge Denies Marriage License to Gay Male Prisoners, 1988 Lesbian/Gay L. Notes 63.
Q: Would children get the basic income?
A: Why not?
Actually, there are a lot of different opinions on this. Some say yes, some say no, some think children should get a smaller basic income, and some think children should get a full basic income but all or a portion of it should be held in trust until they are adults. Some jurisdictions actually provide small basic incomes, or nearly basic incomes to children even though they do not provide them to adults, through baby bonds and child tax credits. The most common reason given for saying that children should be denied the same basic income given to adults is that it will encourage poor people to have children who will be dependent on the state, but there is little support for this. Adults with a basic income will not be poor, and birth rates decline as incomes rise. For someone not already in poverty, it is unlikely the basic income will be large enough to make having a child a financially smart move. But whatever you believe about children and a basic income, remember that children are fully human, so any deviation from what adults receive needs to convincingly answer the question, “Why not?”
Q: Would people in NewYork City get the same basic income as people in Oakley, Kansas?
A: The truth is we do not know whether or not “top ups” would be needed in more expensive areas if there was a basic income. Currently, most people are forced to live in cities because that is where the jobs are, and rents are high in cities because the property owners can extort money from people who have to live there because they need to live near their work, and retail prices are high in cities because rents are high. What would population patterns be like if people could just move to rural areas and live off of a basic income if rents got too high? Would rents go down in cities if people were not forced to live where jobs are? We simply do know the answer to those questions. So it would be best to start with a basic income that is universal, unconditional, and uniform at the national level, and be willing to revisit the idea of top ups for more expensive areas when we know what life with a basic income is like. Meanwhile, local governments can offer smaller basic incomes to their residents financed from local taxes and resources to add to a national basic income. A national basic income should not force Alaska to stop paying dividends to its residents from its oil revenues nor American Indian tribes from paying its members dividends from casinos, for example, nor any other local government from offering refundable tax credits.
Q: Would visitors to the country, whether documented or not, be entitled to the basic income?
A: The short answer is “no”. I know of no well-sussed basic income proposal that contemplates sending payments to anyone beyond citizens and legal permanent residents (LPRs), and as a practical matter, it would seem unlikely that any proposal to make payments to anyone beyond LPRs would pass. Indeed, many basic income supporters prefer the terms “Citizen’s Income” or “Citizen’s Dividend”.
However, after a basic income is established for citizens and LPRs, it may be worthwhile to revisit whether other visitors can get a basic income as a separate societal decision. Unlike for children, the burden would be on those who want to extend benefits to visitors, and there are good reasons to extend the basic income beyond LPRs, and good reasons not to extend the basic income beyond LPRs.
Q: What are some good reasons to extend a basic income beyond legal permanent residents (LPRs)?
A: Some possibilities:
* Any humane society will provide at least some social benefits to the poor within their borders, however they got there, and cash payments might simply be more efficient.
* Poorer immigrants either spend their incomes or send a portion to poor relatives back home, so cash payments to them will either stimulate our economy or act as foreign assistance well targeted to the needy in nations with intimate ties to ours.
* Immigrant workers who do not receive a basic income are more easily exploited as cheap labor and would be unfair competition for citizens and LPRs who do receive a basic income.
Q: What are some good reasons not to extend the basic income beyond citizens and legal permanent residents (LPRs)?
A: Some possibilities:
* The basic income could be a magnet drawing an unsustainable number of immigrants. It would be easy to be overly skeptical of this concern, because anti-immigrant voices have been claiming for decades that immigrants come here for welfare benefits, and that is simply not true. Immigration tends to rise and fall with jobs, not availability of welfare benefits. However, the general utility of cash benefits may make them so qualitatively different from welfare benefits that people might start coming here just to receive them.
* Granting cash benefits to other poor visitors might interfere with the alternate humane policy of trying to extend LPR status to as many of them as possible, reducing both the pressure on other immigrants to become LPRs, and the pressure on politicians to extend LPR status to far greater numbers of people.
* Rather than extend the basic income beyond citizens and LPRs via unilateral legislation, we might choose to do so via reciprocal treaties, encouraging other nations to establish a basic income and/or leading the establishment of a global basic income.
Q: How can you possibly think it is moral for some people to live off of the work of others?
A: What I find immoral is *forcing* some people to work for the benefit of others. That is why I support a basic income guarantee. It was Vladimir Lenin in Bolshevik Russia who stated, “Those who don’t work don’t eat.” Whether that sentiment is expressed by Lenin or by Charles and David Koch in 21st century America, it is powerful members of society demanding that the government use its guns to enforce a Utopian ideology that benefits them personally on the masses that did not consent. If everyone had a basic income, then no one would be forced to work for others. With a basic income, producers would have to be induced to work voluntarily, either by appealing to their good nature or by offering them special benefits such as recognition or extra money.
Q: If everyone received a basic income, would not employers simply reduce salaries by the amount of the basic income, since their employees would need that much less money to live on?
A: Wage substitution from a basic income should only occurs at the lowest subsistence level wages. Because no one will work for less than they need to live, supply drops off at that point. Giving those people other regular income that is not sufficient to live off of reduces what they need to live from employers. This is why a minimum wage will still be necessary until we have a basic income that is higher than what people need to live. However, a wage substitution effect should not occur once there is a basic income above subsistence level, since recipients would be empowered to leave jobs where they did not believe they were being paid adequately.
There should be no wage substitution effect on skilled labor. Everyone making over subsistence level is getting paid based on the supply of and demand for their specific skills. There are plenty of people willing to do the work of a nurse for much less than nurses make, but they cannot because they do not have the skills. At subsistence level, the “supply” in the supply and demand labor curve is the supply of bodies. Above subsistence, the “supply” is the supply of skills. A UBI at less than subsistence level can allow bodies to supplied for less, but no basic income will directly change the supply of skills.
Q: Do we currently have any empirical evidence of what the effect of a basic income would be on wages at the macro level?
A: No. The Alaska Permanent Fund and the Earned Income Tax Credit do not appear to have affected wages either positively or negatively, while the Speenhamland System in England in the early 19th Century does appear to have generated a wage substitution effect. However, none of these cases is illustrative. The amount of Alaska Permanent Fund payments is too variable for employees to count on what they might receive, and it pays people in a state where the supply of even unskilled labor is consistently tight. The Earned Income Tax Credit is means tested, applies primarily to workers with children, and is too complicated for most of its recipients to understand for them to rely on it. The Speenhamland System was an extremely heavily means-tested income support program conditional on work. No basic income experiments have been conducted at a massive enough scale to see effects on labor markets.
[The following is an excerpt from a book in progress, The Poverty Abolitionist’s Handbook.]
Q: But who will clean the toilets? If everyone has an income sufficient to meet their basic needs, even if the vast majority of people want to do some productive work, what incentive will there be for anyone to do all the dirty and dangerous jobs that need to be done for society to function?
A: That is an evil and aristocratic question. How will we find cheap labor to do the nasty jobs we want done, but don’t want to do ourselves, if we don’t starve some unimportant people who refuse to do them for us? This question is the labor equivalent of the question a Democratic California State Senator in the 1970s asked a group of feminists who were petitioning for the removal of the marital rape exemption: “But if you can’t rape your wife, who can you rape?” Or the plantation owners at the end of the Civil War who demanded to know who was going to pick their cotton.
You want to know where the incentive to do dirty jobs will come from? How about the free market? If you offered enough money you could probably get Warren Buffet to clean your toilet. You want your toilet cleaned? You do not want to do it yourself? Then just pay someone else who is not afraid of starving whatever it will cause them to clean it for you. You don’t have enough money? So sad. You probably do not have enough money to buy your own private jet, do you? That’s life.
Note: This answer is a rant, but the question deserves it. Admittedly the *questioner* probably does not deserve the rant. There was a time only a half-century ago when the idea of prosecuting a man for raping his own wife seemed absurd. It seemed absurd to a man raised to believe it was his wife’s duty to cook, clean, and to give sex to her husband, and he did not think about the unfairness to the wife any more than most of us think about the unfairness to the chickens we eat. If you had a visceral defensive reaction to the idea that there is something unfair about eating chickens, then you can at least have some sympathy for the man who thinks it is his right to rape his wife. If you object that there is a huge degree of difference between the unfairness of eating chickens and the unfairness of raping wives, well, I would agree with you. (Full disclosure: I eat chickens.) Of course, the person who wants to force others to clean his toilet cheaply or starve would also see a huge difference between that and rape. And note that prosecuting men for raping their wives also seemed absurd to a lot of women who believed they were being good wives by submitting to their husbands, and saw – probably unconsciously – removal of the marital rape exemption as an attack on an identity that they based their self-worth on. And many people asking who will clean the toilets will actually be people who have themselves worked demeaning jobs at exploitative wages to provide food for their families and take pride that they did what they had to do to survive. Such people may see a basic income as an attack on their self-worth and personal identity in a manner similar to the good wife who finds it absurd to prosecute a man for “raping” his wife. So calling out such questions as evil probably does real harm to people who do not really deserve it. But to treat such questions as reasonable does the harm of conveying the idea that they are in fact reasonable questions. The only way to teach the wider public, and most importantly rising generations, that it is contemptible to ask who will pick your cotton if not slaves, or who a man can rape if not his wife, or who will clean the toilets if not people who would otherwise starve, is to treat the question with the contempt it deserves. If you absolutely must answer the “But who will clean the toilets?” question in a diplomatic way, you can substitute the answer to the next question about the effect of a basic income on wages. I still do not recommend it, because I believe it to be more important to call out the assumption that it is acceptable to force some people to do dirty jobs for others cheaply under threat of starvation.
Q: What would be the effect of a basic income on wages?
A: Overall there would likely be a moderate upward pressure on wages and possibly a slight leveling effect. The “permanent strike fund” aspect of a basic income would give most workers more bargaining power and cause wages in general to rise modestly. The wages of workers doing unpleasant and unskilled work would likely rise dramatically as no one will be forced into doing those jobs. The wages of skilled professionals such as doctors, accountants, plumbers, and electricians would likely fall as more people could take the time necessary to qualify for those positions. If the basic income was at a level sufficient to abolish poverty, the wages for pleasant unskilled work might fall, as it might be reasonable to rethink the need for a minimum wage. The leveling effect of a basic income is unlikely to reach a point where it will make financial sense for a law firm to require attorneys to take turns cleaning the office bathrooms, because then fewer people would likely become attorneys. But if it does, so be it. This makes it even more difficult when looking towards retirement, with many looking to work straight into retirement to help themselves financially. Others find that they are looking towards their equity for any help with retirement finances with some using something like this equity release calculator to find out how much they have and will be able to live on during their retirement.
Q: How will a basic income affect economic growth?
A: There will likely be overall positive economic growth resulting from a basic income, as it would end up as a net transfer of money from people who either hoard or invest most of their wealth to people who spend most of their wealth. Hoarding wealth is always bad for the economy, while investing wealth is a gamble that could grow the economy if there is demand for the investment, or squander wealth if there is not. Spending money manifests demand, and so always helps the economy. Of course, the basic income does have to paid for, and so the economic effects of whatever tax scheme is proposed to pay for must be taken into account. Taxes on both income and consumption discourage economic activity and could counter the increased demand generated by the basic income. However, taxes on land, natural resources, and wealth capture rent, discourage hoarding, and encourage economic activity by forcing those who hold wealth to either use it or lose it.
Note: Philippe Van Parijs, one of the top living figures in the basic income movement, says that when we are asked this question, we should not answer it. There has been no way to empirically test the general question, there have been apparently contradictory results from empirical studies of the effects of a basic income on labor force participation, and economic growth is not the main point of a basic income. Even if it were good for overall economic growth to force 5% of the population to starve, this is not a world we want to live in. However, I believe that reasonable speculation can provide us with a plausible, positive, and useful answer, so I have provided one. But remember, you take my advice over his at your own risk.
Q: Isn’t the claim of technological unemployment just the Ludite fallacy?
A: Well, it is until it isn’t. It is not hard to imagine a society where the vast majority of jobs can be done more efficiently by machines, and the the few jobs that require humans are made so efficient by machines that only a minutely small number of humans are needed to do them. Eventually, this seems inevitable. The only question is whether it will come 20 years from now or 200 years from now. Evidence that it is coming sooner rather than later can be seen in the breakdown of the arguments against technological unemployment. Traditionally, economists have said technology creates more jobs than it eliminates via two primary mechanisms. First, jobs move from one sector to another. Second, higher skilled jobs are created to oversee the machines. So, a thousand years ago, most people worked in agriculture growing food. As technology made it possible for a few people to produce enough food for the many, people moved to factories. By 150 years ago, most people were working in manufacturing making goods. As manufacturing became more efficient, people moved into the service industry. But now, we are running out of sectors. And the jobs currently being threatened by technology include not just low-end work like cashiers and laborers, but highly educated work like accountants and pilots. The rate at which technology eliminates jobs may have already surpassed the rate at which it creates jobs.
Q: Are there other ways to deal with technological unemployment besides a basic income?
A: Yes. There are six.
1. We could allow massive numbers of people to starve.
2. We could guarantee jobs that do nothing useful for society and just waste the time of the employee, such as digging holes and filling them back up again.
3. We could institute a 15-hour work week and a $25-per-hour minimum wage.
4. We could start banning new technologies.
5. We could force everyone to become a cyborg. If you can’t beat ’em, join ’em.
6. We could give everyone computers and robots to rent out, making everyone a capitalist. Of course, their machines would need to be constantly upgraded to prevent obsolescence, some people would make bad choices, and some people would have their business go under through no fault of their own. Which means we would then need to accept mass starvation or strictly regulate how people run their robot rental rental businesses or give people new machines on a regular, periodic schedule.
Or we could just give everyone a basic income.
Q: Isn’t this just communism?
A: Actually, Milton Friedman and F.A. Hayek, two of the three most important libertarian economists in history, supported a basic income. Meanwhile, the most famous person to declare that those who don’t work don’t eat was Vladimir Lenin. So in this discussion, I am the one supporting the policies of Milton Friedman, and you are the one supporting the policies of Vladimir Lenin. But please, go back to calling me a communist.
Note: This answer is snark, but the question is not serious. The serious answer is that forms of a basic income guarantee are compatible with both capitalism and socialism/communism, and that fact helps to demonstrate that “capitalism ” and “socialism” are both incoherent terms. But over usually when you hear this question, it is not a serious inquiry but an ad hominin attack. The point of the answer is simply to injure the attacker’s credibility with onlookers by demonstrating that they simply do not know what they are talking about. Bonus points if they have to ask you who Hayek, Friedman, or Lenin is.
Q: Why should working middle class people support a basic income?
A: The first reason is money. Due to extreme rates of income and especially wealth inequality that exist today, under nearly all proposed tax schemes to pay for a basic income, the vast majority of working middle class people will be net beneficiaries. But even if you are near the break even point in the upper middle class, you should support a basic income for the same reason that healthy people should support universal health insurance: You are not invulnerable. You could lose your income and all the wealth you have spent years building up through your own bad decisions, the bad decisions of the C.E.O. of the company you work for, the bad decisions of a politician, a natural disaster, an economic recession, or getting hit by truck and left with back pain that leaves you in bed five hours a day but is invisible to a disability judge. And even if disaster never strikes you, the knowledge that it could strike you constrains your freedom. When you plan for the care of an aging parent, you know how precarious your finances are. When you dream of starting your own business, you know how precarious your finances are. When you consider taking time off for a vacation or to go back to school or to finish an art project, you know how precarious your finances are. When you ask your boss for a raise, *he* knows how precarious your finances are. Now imagine making all of those choices if you knew you had a basic income.
Image via FMDam.org.
[The following is an excerpt from a book in progress, The Poverty Abolitionist’s Handbook.]
Someone who offers a question that is really a challenge, like “Why would you believe something like that?”, will likely maintain their attention for about a minute. But someone who asks a more thoughtful question, even in a social situation, will likely maintain their attention a little longer, maybe three to five minutes. Nevertheless, brevity is a virtue, and the shorter the answer, the easier it is to understand and remember. So I have limited the speaking time of all of these answers to two minutes, and most are much shorter than that.
Q: Shouldn’t we lower the cost of a basic income through means testing? How does it make sense for the government to send free money to Bill Gates?
A: The taxes that pay for a basic income are the only sensible means testing, and Bill Gates would pay far more than he received. Means testing is itself a tax on the middle class that traps people in poverty by creating a strong disincentive to work and save for those already at the margins of employment. Means testing a basic income would transform a system of just predistribution into a redistributive welfare program. Means tested welfare programs are a way for the rich to make the middle class pay to stop the poor from revolting.
Q: Can we afford a basic income?
A: The gross domestic income for the United States last year was over $16 trillion and the total population was just under 320 million, giving us a mean average income of more than $50,000 per person. The 1950s and 1960s were known as decades of great economic growth in the United States. For most of the 1950s we had a top marginal income tax rate of 90 percent, and for most of the 1960s we had a top marginal rate of 70 percent. Our current top marginal rate is 39.5 percent. We could fund a basic income of $10,000 per person on top of all our other spending with an across-the-board income tax increase of 20 percent, and our top marginal rate would be 59.5%, still less than during the 1960s. That might not be the entire way we want to fund the basic income, but it does show we can afford it, and the cost would only go down from there as we started to cut now unnecessary welfare programs and began spending less on law enforcement and health care.
Q: What other government programs would we eliminate if we had a basic income?
A: Politics would not end if we had a basic income, and this is a point of contention among basic income advocates. There are socialists who see a basic income as just one of a large number of new government programs they want to implement, and there are libertarians who believe that their arguments for lower taxes, spending, and regulations will be more compelling if there are literally no poor people who need taking care of. But there is a quick and dirty compromise that could be implemented at the initiation of a basic income that would greatly reduce other welfare spending without raising or lowering our current welfare commitments. We could leave all current welfare programs on the books, but declare that the basic income will be treated as “unearned income” for purposes of determining benefits. For a basic income of $10,000 per year, federal SSI spending would cease, and food stamps likely would as well, and subsidies for housing, education, and health care would fall dramatically. Essentially, we would be treating everyone the same as we would now if they all started to receive an annual annuity, because they would.
Q: Wouldn’t giving everyone free money cause severe inflation?
A: It would if we just printed the money and gave it away. But as long as we pay for it through taxes, the money supply would remain stable and it would be no different than if everyone got more money from working. Alaska has a small basic income and there is no evidence that it has affected their inflation rate, nor is there evidence that prices rise when the minimum wage is raised. There is a potential for a basic income to cause a rise in the price of fixed assets such as land, but that is again no different from what would happen if everyone earned more money from wages, and those gains can be recaptured through land taxes.
Potential follow up Q: But if everyone were earning more money from working, wouldn’t the inflationary pressure resulting from greater demand due to higher wages be countered by the deflationary pressure resulting from the increased production due to more work? And wouldn’t giving free money to people who do not work tip that balance?
A: A market economy is not a Field of Dreams: Customers do not come because you build things, rather things get made because customers want them. Most items that would see a surge in demand due to a basic income are food or consumer goods that see reductions in prices from the economics of mass production. The exception would be where a seller has a monopoly, or in the case of fixed assets such as land, which I discussed before. Again, Alaskans do not work for their dividends, and when the minimum wage is raised there is no corresponding rise in production, yet neither of those causes inflation.
Q: Why do you want the government to give able-bodied people the same monetary benefits as the disabled? Shouldn’t people with special needs be entitled to more money to offset their tougher lot in life?
A: No. The communist idea of “to each according to their need” is patronizing in theory and degrading in practice. Currently in the U.S., disability payments are for the survival needs of those who cannot work. They are not intended to compensate for how bad your life is with a disability, and the amount you receive is not determined by what type of disability it is or even how bad it is, as long as it is bad enough that you cannot work. How could it be otherwise? Should a blind person get more or less than a paraplegic? Should a person bed-ridden from pain six hours per day get twice as much as a person bed-ridden three hours per day? How do you prove it?
How can you judge who is “disabled enough”, and how do you compare one disability against another? Currently the process of applying for disability is long, arduous, arbitrary, humiliating, and demoralizing. We think we can easily tell who *really* needs our help, when the truth is that many – but certainly not all – people with traditional and obvious disabilities like blindness, deafness, and being confined to a wheelchair lead easier and more fulfilling lives than many people with invisible disabilities like depression, fibromyalgia, or chronic fatigue. We force people who cannot work to convince skeptical judges about how pitiful their lives are and then we label them as being either lazy frauds or useless burdens. You really cannot know what another person’s life is like. To make someone prove they are disabled is to make them convince themselves they have no hope.
Health insurance should include paying for specific items that are needed for a specific disability, such as a motorized wheelchair for someone with severe neuropathy or para-transit services for people with epileptic seizures that make it dangerous to drive. But for our basic living expenses, we all deserve them equally, and no one should be forced to prove it.
Q: If we gave everyone an unconditional income, would not some people just waste it, or spend it on stuff that is bad for them?
Confrontational answer: Maybe. It is their money. Do you want everyone telling you what to do with your money?
Likely follow up: But it’s *my* money. It is the money that I pay in taxes that will go to the people who do not work.
Confrontational response: First, probably not. Unless you earn significantly more than median income, you will likely be a net *recipient* of the basic income. Second, the taxes you pay are your fee for the benefits of government, such as infrastructure, protection of your life and property, and use of legal structures such as contracts, corporations, and various forms of property. Your basic income is part of your personal dividend as an equal owner of the government. Do you worry about whether your landlord will misspend what you pay for rent, or whether McDonald’s will misspend what you pay for a Big Mac?
Utilitarian answer: Maybe. But there is no evidence that the government can run people’s lives better than they can run their own. The government can cause people to make better decisions by educating them and providing resources. But when the government imposes regulations, demands paperwork, and takes enforcement action against people, the burden and stress discourages personal improvement. And experiments with direct cash transfers to the poor show they often come up with useful and responsible things to do with the money that the experts never thought of. Finally, the sanction of taking away money is counter productive. Becoming homeless almost never causes addicts to give up drugs, teenagers to study more, or the overweight to buy more nutritious foods.
Q: Wouldn’t a lot of people just stop working if they received free money?
A: Would you? A major goal of the basic income is to eliminate the poverty trap of welfare by paying people whether they work or not. Most lottery winners work. Most trust fund babies work. Basic income trials for families in poverty in the U.S. in the 60s and 70s did show a 14% work reduction. The largest cause of the reduction were teenagers who stopped working and secondary workers who became homemakers; these reductions were likely responsible for the extraordinary gains in education and health outcomes produced by the cash grants. Some primary workers with two jobs quit one, and unemployed workers took longer to find work, perhaps being more picky about finding a job that paid better and suited their skills more. Not a single case was found of a primary worker quitting all jobs and living solely off the basic income. In fact, the primary workers in recipient families still worked more than full time on average. More recent cash transfer experiments in nations with extreme poverty such as Uganda have shown *increases* in work, as people without jobs often use the money to start their own businesses. The pattern seems to be that almost all people want to spend a significant amount of time engaged in productive work, and a significant amount of time in leisure activities, and they will use whatever money they have to achieve that balance.
Q: It seems like you are striving for a BIG at a level to satisfy Maslow’s first two tiers (Physical and Safety needs). If those two are met without effort what is the incentive for a person to be societally productive instead of simply working on fulfilling their higher tier needs?
A: The ideal level of a needs-based basic income would include access to some things that go beyond Maslow’s first two levels in a strict sense, but could be conceived as being included in them in the modern world, such as transportation, communication, and gyms and parks. But roughly, yes, we would be looking at providing the first two tiers on the hierarchy.
The higher level needs are things that the government can not, or should not, provide for people. The only way the government can provide self-esteem to individuals is to give them privileges that elevate them over others. In past times and places, some people have be able to meet their self-esteem needs simply by remembering that they are an aristocrat or a Roman citizen or a Catholic or a man or a white person. But in a legally egalitarian market society, the primary path to self-esteem is financial independence. People working on meeting their self-esteem needs in a market society will want to achieve financial independence far beyond simply having their survival and safety needs met, and they will be the primary candidates for doing all of the jobs needed by society, but only at the fair wages that will not hurt their self-esteem by making them feel exploited, which they would be willing to work at to meet survival and safety needs.
Self-actualization needs are highly idiosyncratic, and whether people working on fulfilling those needs will do other productive work society demands depends on the requirements of their respective projects. If fulfilling your self-actualization needs requires you to write a novel, you can probably live off of your basic income, and you may not be motivated to do other work. If your self-actualization requires you to sail a boat to the Galapogos Islands, you probably will be motivated to go earn some extra cash. For some, their self-actualization involves building a business. These people will be actively seeking out needs of society to fill.
Those who reach transcendence will be devoting most of their time to helping society almost by definition.
“What? You think the government should just give everybody money?! Regardless of whether they worked for it or not? Regardless of whether they even need it or not? Why do you think *that* would be a good idea?”
You are out in public. It just came up that you support a basic income guarantee, and someone just hit you with the above incredulous questions. Unless you are on a college campus or at an academic conference, you can probably expect your listeners’ attention to last roughly one minute before they are either intrigued and ask more questions, or they tune you out completely. What do you say?
Well, obviously there are a lot of different reasons why people support a basic income, and so your answer will depend in part on why you personally support a basic income. And it will also depend in part on what you think your listeners’ core beliefs are, and what may therefor persuade them. So there cannot be just one right answer.
With that in mind, I offer the following eleven suggestions.
All of the following arguments are my own derivative summaries and reinterpretations of other people’s ideas. The Keynesian and Georgist arguments are derived from the writings of their namesakes. The market utilitarian case is derived from the ideas of Milton Friedman, and the independentarian case is derived from the ideas of Karl Widerquist. I am also particularly indebted to Widerquist for inspiring the fairness case. None of the other arguments are original, but I have sadly forgotten the individuals from whom they are borrowed.
So please feel free to use any or all of them as you see fit to promote the abolition of poverty. They can be used in person or in speeches, in blog posts or comments, in Congressional hearings or your Facebook status, or anywhere else you see fit. Also feel free to modify them as necessary.
And yes, I have timed myself speaking all of them, and I was able to speak each of them at a normal speaking pace in one minute or less.
The one minute fairness case for a basic income guarantee:
Property is a social construct legally enforced by the government. If all people are considered equal, then absent any other considerations, each person should have an equal amount of property. So material equality should be the default. In a free market economy with a basic income at or below the highest sustainable rate, those who choose to live off of the basic income are not living off of the work of others. Rather, they are living off of less than their “fair share” of property and allowing the extra to be used by those who choose to work.
The one minute market utilitarian case for a basic income:
The free market is the greatest generator of wealth ever devised. Money is the most effective means of socially producing utility, as it allows each individual to obtain whatever needs and wants they subjectively require. However, one dollar in the hands of a poorer person produces greater utility than a dollar in the hands of a richer person, because the richer person can fulfill more of their more important needs and wants with the rest of their money than the poorer person can. So the transfer of money from a richer person to a poorer person increases overall utility. The government is incompetent at running people’s lives or regulating the economy, but the one thing it can do effectively is mail out checks. A basic income is most effective means of transferring money from the richer to the poorer with the least government interference and the least work disincentive. The natural limit on the amount of the basic income is the point where the work disincentive from the required taxes reduces wealth the point where the basic income would have to be reduced.
The one minute Keynesian case for a basic income:
Keynesian economics works when implemented correctly. But properly implementing Keynesian economics is politically very difficult. It requires politicians who are willing to spend a lot of money on stimulus when the government appears broke, and then turn around and become deficit hawks when the government is rolling in cash and everyone wants a piece of the pie. A basic income funded primarily from an income tax would become a massive institutionalized entitlement expected by the population whose cost would automatically increase and decrease in direct opposition to the economy. As unemployment rises, the number of net receivers goes up, and as unemployment falls, so will the number of net receivers. Keynes once famously said that the government should pay people to dig holes and fill them back up again. But why waste people’s time? Anyone who sits on the couch and watches TV while living off of a basic income will contribute as much to society as the hole diggers. And anyone who does anything more productive will create a net good for society.
The one minute human rights case for a basic income:
Poverty is not a natural tragedy like cancer or earthquakes. Poverty is a human caused tragedy like slavery or government oppression. Slavery is caused by societal recognition of humans as property. Government oppression is caused by governments punishing people for their beliefs or characteristics, and without due process of law. Poverty is caused by property laws that deny some people access to necessities. These types of tragedies can be ended by recognizing that humans have the right not to be subjected to tortuous conditions imposed by other humans. Humans have a right not to live in slavery. Humans have a right to be free of government oppression. And humans have a right not to live in poverty. A basic income is not a strategy for dealing with poverty; it it the elimination of poverty. The campaign for a basic income is a campaign for the abolition of poverty. It is the abolitionist movement of the 21st century.
The one minute Georgist case for a basic income:
Property is a product of creation, not of mere use. “I made this.” confers property rights, “Tag! It’s mine!” does not. Things that exist as a product of your labor must be yours, and for anyone else to appropriate them is to make you their slave. Land and natural resources, however, are not the products of people, but of nature or God. They are gifts to all of humanity. Individual property in land and natural resources may be practical or useful, but it is still theft. Utility might justify this theft, but compensation is still required. As the appropriation was done without consent, the compensation must be in the form that offers the greatest choice of use to the victims. That form is cash. The most efficient arrangement for payment is for the takers to pay the full rental or use value to a single entity which can then divide the proceeds equally among the population. Taxes are the tribute I pay to you for displacing you from land, the basic income is your dividend.
The one minute transhumanist case for a basic income:
Two hundred thousand years ago humans lived in hunter-gather societies. About 10 thousand years ago, humans began to live in agricultural societies, and then about 300 years ago, humans began to live in industrial societies. Since 30 to 50 years ago, we have lived in a service society. Theoretically, the last economic stage of society is a leisure society, where most people either work in the artistic or scientific fields, or do not work at all. So far, each phase has lasted only a small fraction of the time of the previous phase. If that pattern holds, service societies should last less than two generations, a time period nearing its end. Right now, worker productivity is advancing faster than the need for workers, and robots are inhabiting labs in research hospitals and at DARPA. It is time to prepare for a society in which we simply do not need everyone to work. A basic income will be needed to provide a living for people, and to provide customers for business.
The one minute conservative case for a basic income:
The welfare state may not be the society we would have created, but it has been here for 4 generations, people have come to expect and rely on it, and it would be extremely disruptive to society to get rid of it. But while we may not be able to get rid of the welfare state, we can reform it. The current welfare state necessitates an immense and expensive bureaucracy, it is prohibitively complicated for some of its intended beneficiaries to navigate, it puts bureaucrats in charge of the lives of the poor, it creates perverse incentives for people to avoid work and to remain poor, and it arbitrarily allows some people to fall through the cracks. A basic income would correct all of these problems. A basic income is simple to administer, treats all people equally, retains all rewards for hard work, savings, and entrepreneurship, and trusts the poor to make their own decisions about what to do with their money, taking these decisions out of the hands of paternalistic elitist politicians.
The one minute feminist case for a basic income:
Patriarchy has put the world’s wealth in the hands of men, prevented women from being professionals and entreprenuers, forced poor women into dead-end second-class labor jobs, and forced all women to become unpaid domestic servants and caretakers of the young, elderly, and disabled of their families. Women have been forced to be financially dependent on fathers or husbands who are often abusive. A basic income would change all of this. A basic income would be a massive transfer of wealth from men to women. Women would be free of financial dependence on any man, and the young, elderly, and disabled would all be fully supported. Women could afford to leave abusive husbands, those who chose to be caretakers would be fully compensated, and no woman would be forced into a dead-end job, and would instead be able to pursue her own financial goals as she saw fit.
The one minute (right) libertarian case for a basic income:
While it may have been theoretically possible to acquire property in a just manner soon after humans evolved, none was. Every square inch of inhabited land on earth can trace its title back to someone who acquired the land by force. All land titles on Earth are soaked in blood. And not just land titles. Thanks to past government spending, targeted tax breaks, intellectual property, corporate charters, slavery, and meddling regulations, no property or wealth can be said to have been justly acquired. If we assume that those who have the least are greatest net victims, a basic income would provide the best possible rectification with the least government control, producing the least unjust system of property distribution possible in the real world.
The one minute liberal case for a basic income:
A basic income would correct or ameliorate many inequities and inefficiencies inherent in market capitalism. The wages of unskilled and semi-skilled workers would rise as those who enjoy and are good at such work will no longer have to compete against those who are forced to seek such work out of financial necessity. The wages of highly skilled workers will fall as more people are able to take the time necessary to gain the skills to compete for those jobs, lowering the cost of legal, financial, and health care services. A guaranteed income will soften the blow to workers displaced by advancing technology and the creative destruction of the market. Job seekers will be able to take the time necessary to find work that is the best fit for them, increasing efficiency in the distribution of labor. And entrepreneurship will flourish as those wanting to start their own businesses will have an income to survive on during the long lean times that typically come when building a new enterprise.
The one minute independetarian case for a basic income:
Property rights are not natural, they are a social convention. But they give each individual freedom, as the essence of property is the right to exclude others, to have a place where no one else has dominion over you. The first rule should be that each individual has inalienable ownership over her own body and mind. But carving up all of nature outside of bodies leaves some people unnaturally without the means to obtain the necessities of life. Therefore each person must also have an inalienable property right to these necessities. Society owes you a living, because society is preventing you from foraging the land to obtain the necessities of life on your own. Society could rectify this problem by letting individuals forage for necessities wherever they wish, or by giving them the land they need to survive on their own, or by providing these necessities directly. But in modern societies, the most efficient way to provide for these necessities is with direct cash payments, a basic income.