The publisher of a paper I wrote in 2015 has now given me the right to share the published version of my own article without charge. (That is, without them charging me for sharing my own work with you.)
Thomas Piketty’s recent book, Capital in the Twenty-First Century, provides a great deal of empirical support for the observation that the rate of return on capital (r) is greater than the growth rate of the economy as a whole (g); i.e. “r > g”. From this observation, Piketty derives two important insights: entrepreneurs eventually become rentiers, and except during unusual circumstances, inequality tends to rise over time. This paper views Piketty’s observation against the institutional setting that has prevailed over the period of his study and makes two additional observations. First, whether Piketty’s two insights follow from his observation depends not simply on whether r is greater than g, but on whether the difference between the two is greater than the consumption of the capital-owning group. The relative size of capitalists’ consumption and capital income is not obvious, and therefore, more evidence is needed to confirm the connection between Piketty’s observation and his insights. Second, the statement r has been greater than g is more accurate than simply r is greater than g. Whether r continues to exceed g depends crucially on the political and institutional environment in question. Economists tend to view one specific institutional setting, a version of laissez faire, as natural. But there is no natural set of property institutions, and those that have prevailed over the two centuries of Piketty’s observations are extremely favorable to capital owners. Awareness of the flexibility of potential property institutions raises many ethical questions and makes many tools available to address inequality – one of the most obvious being the taxation of rent on capital distributed as a basic income
Joe Huston, the CFO of GiveDirectly, speaks with the UBI Podcast about the largest basic income trial in history.
The trial is in its earliest stage and will expand later, giving entire communities a basic income in Kenya.
A 12-year basic income will be provided to 40 villages, 80 villages will receive basic income for 2 years. A lump-sum payment will be given to 80 villages. There will be 100 villages that will act as control groups.
One interesting takeaway is that Huston said they are already seeing some “spillover benefits.”
“I expect there will be spillover benefits. We kicked off in one pilot village, and already the surrounding villages have mentioned people are buying more services and goods,” Huston said.
When discussing pilot programs, the environmental impact of basic income is often overlooked. Huston said that GiveDirectly does not take a position on this, but he said developed countries should take the lead on the environment.
“My personal view is for these environmental goals you’d want to solve through other means, international treaties or the developed world stepping up, verses trying to slow down development of very very poor areas,” he said.
As the research begins to come out about basic income, Huston said he hopes it can inform the debate about how to best form the social safety net.
“I think evidence from the UBI study showing those who are just poor but receive money and put that toward investment that have big life-changing effects, I think that could change how social protection is done in those countries,” Huston said.
Previously, even after cash-transfer pilots end, Huston said that they continue to see positive effects.
“GiveDirectly’s first study measured effects up to a year after payments stopped…and you still saw pretty strong effects on earnings, assets, food security, reduction in stress levels,” Huston said.
Stress was measured through looking at cortisol levels, which saw significant declines after cash-transfers were administered, Huston said.
Once the 12-year study ends, Huston said he expects they will continue to follow up with these villages to see if there are permanent effects of basic income on these areas.
“We have the potential to end extreme poverty globally, many countries have the potential to end whatever they consider their national poverty line. And that potential…is extraordinarily exciting. It is a huge opportunity for our generation,” Huston said.
“Then the question is, ‘why wouldn’t we test this?'”
The cost of a Universal Basic Income (UBI) is often greatly exaggerated, because people are tempted to think the cost of UBI is the size of the grant multiplied by the size of the population. You can call that the “gross cost” of UBI, but it’s a gross overestimate of the real cost of UBI. It fact, it’s not a cost in any meaningful sense, because UBI is a “tax rebate” or “a refundable tax credit.” That is, UBI is a negative tax. People seldom call UBI a negative tax because that would invite confusion with a similar policy formally named “The Negative Income Tax.”
But in the more important generic sense, UBI is–and must be understood as–a negative tax. When you pay the government, that’s a tax. When the government pays you (without you having sold something to the government), that’s a negative tax. It doesn’t cost you anything for the government to give and take a dollar from you at the same time. If you want to know someone’s total tax burden, you need to subtract the negative taxes they receive from the positive taxes they pay.
Far more than any other policy, UBI involves the government taking money in taxes and giving it back to the very same people as a UBI.
A calculation of real redistributive cost of UBI requires subtracting all of that taking-and-giving-back to focus on the net increase in taxes on contributors (or net cuts in other spending) that will be necessary to support the net benefit to net recipients. The redistributive burden is the only real budgetary cost of UBI.
UBI’s net cost issue requires a careful explanation because the issue is almost unique to UBI, extremely important, and sometimes difficult to grasp. The issue occurs because UBI is both universal and in cash. Because it is universal, everyone receives it, even net taxpayers. Because it is in cash, people receive the same thing that they pay. Because it is both universal and in cash, people receive the same thing at the same time that they pay for it.
Most transfer payments go to people who are not at the time also paying taxes to support it. For example, almost no one both pays for and receives Unemployment Insurance, the Earned Income Tax Credit, Temporary Assistance for Needy Families, disability insurance, Medicaid, and so at the same time. The vast majority of people pay for Social Security at one time and receive it at another time. The net issue so important to UBI is negligible or nonexistent for all these policies.
About half of U.S. transfer payments are healthcare related and many of these do involve the same people both paying for and receiving benefits at the same time, but they pay in cash and receive back in something very different: health care. We need to know the cost of converting the cash into that healthcare. So the gross cost of healthcare spending is relevant, although we might be interested in its net redistributive effect as well.
UBI is fundamentally different from all of these policies because for the vast majority of people it works like a tax rebate. You pay taxes in cash and receive back cash at the same time. Suppose you buy something for $100, but you instantaneously receive back a rebate of $50. You do not have to budget for that $100. You have to budget for $50. That $50 is the only real cost to you of this policy. If we want to know the budgetary cost of UBI, we have to net out the enormous extent to which it functions as a rebate. Unlike healthcare spending, the gross cost has no budgetary effects at all. There is a limit to how much healthcare the government can provide you even if you are paying all the taxes for it. You only have so much purchasing power. Only so much of it can be converted into healthcare. But there is no limit to how much cash the government can give you as long as it taxes it right back. The government could give every single American $10 billion in cash without increasing prices—as long as it taxes back that $10 billion as soon as it pays it out. We need to get rid of any attention to this meaningless gross cost and focus on the one cost of UBI that matters: its net cost.
Here are some of the many examples of people mistreating the gross cost of UBI as if it were a real cost:
Derek Anderson, “The Real Cost of Universal Basic Income,” Medium, Dec 28, 2016. This one is especially misleading because it looks at the “cost” of redistributing existing entitlements, most targeted at low-income people, and redirecting it into a universal benefit, most of which will not go to low-income people. Doing that combines the replacement of targeted programs both with a very small UBI and with a large tax cut for people with high incomes, as if there were no way other to introduce UBI.
A google search will produce more articles making this error than I can count.
I recently made some simple estimates of the real cost of UBI in an paper entitled, “the Cost of Basic Income: Back-of-the-Envelope Calculations.” It’s currently under peer-review at an academic journal and available in un-reviewed form on my website. I found that a UBI large enough to eliminate poverty costs on $539 billion per year–less than 16% of its often-mentioned but not-very-meaningful gross cost ($3.415 trillion), less than 25% of the cost of current U.S. entitlement spending, less than 15% of overall federal spending, and about 2.95% of Gross Domestic Product (GDP).
-Cru Coffee House, Beaufort, North Carolina, May 23, 2017
Indepentarianism is the political ideology associated with the political theory called “Justice as the Pursuit of Accord” (JPA). I (Karl Widerquist) defined JPA and outlined its theory of freedom in my 2013 book, Independence, Propertyless, and Basic Income: A Theory of Freedom as the Power to Say No. It argues that the promotion of freedom in a society with private property requires, among other things, an unconditional basic income in part, on grounds that it is wrong to put conditions on anyone else’s access to the resources they need to survive. A worker needs the power to say no—not just to any one job, but to all jobs—to enter the market place as a free person and not as a forced laborer. Although this theory is drawn from principles stressing freedom in the most negative sense of the term, it is not associated with theories that use freedom to justify economic inequality. It is committed to the idea that economic and politically disadvantaged people in every society are the least free and that the promotion of freedom in the most meaningful sense requires far greater equality of income, wealth, and political power; greater respect for political dissenters, better stewardship of the environment, and other policies. I am planning to layout the JPA theory of property rights more fully in a future book entitled, Justice as the Pursuit of Accord.
The name, “Justice as the Pursuit of Accord,” comes from the belief that most prevailing theories of justice in political philosophy today are utopian in the sense that they ignore the problem of reasonable disagreement about the basic principles of justice. Social contract theory imagines all the reasonable, rational people in the world agreeing to a hypothetical social contract outlining what justice is. Anyone who doesn’t agree in practice can be dismissed as irrational or unreasonable. Natural rights theorists do not believe that justice comes from any hypothetical agreement. It is just whether anyone agrees or not, but they believe that any rational, reasonable person can discover the true principles of justice by observation and contemplation and anyone who doesn’t agree can be dismissed is irrational or unreasonable. Even the best philosophers are not good at recognizing the difference between reasonable and unreasonable dissent.
These utopian aspects of the leading theories have produced dystopian consequences. Philosophers have misled people into the belief that everyone shares in the benefits of modern society. No matter how disadvantage a person maybe, we are told to believe that they are better off because the government and the property rights system exist. The truth, as Grant S. McCall and I argue in our 2017 book, Prehistoric Myths in Modern Political Philosophy, is that our institutions harm people. Many disadvantaged people are probably worse off than their ancestors were 20,000 years ago.
JPA makes no statement whether there might be a theory of justice to which all rational, reasonable people should or would agree, but it is based on the belief that we are far from the point of discovering such a theory. A true accord exists only if all people are fully autonomous and all literally agree to the social contract or some other basic structure such as a set of natural rights. The essential political problem in the world today is severe disagreement between reasonable people about the most basic principles of justice. We must always pursue that accord, but we should be aware we are unlikely to reach it. Therefore, whoever makes the rules always forces them onto reasonable dissenters. The ruling coalition’s right to make the rules stems both from the agreement of the majority and from their effort to create the minimum negative interference with dissenters. This constraint, of course, requires the governments of the world to treat the disadvantaged and disaffected people of the world much better than they do now—including a payment by those who are most advantage under the existing structure to compensate those who are most disadvantaged under it.
The name, “indepentarianism,” stresses the central role that freedom as independence plays in JPA. The book, Independence, Propertyless, and Basic Income: A Theory of Freedom as the Power to Say No, argues that an individual’s status as a free person is best understood as “Effective Control Self-Ownership” (ECSO freedom, pronounced “exo-freedom” as in external-freedom). In essence: status freedom is the power to say no. An independent person is free from all direct and indirect force to actively serve the interests of others. You can tell a person: go do what you want over there, but if you make it impossible for them to do live as they want without serving some other group of people, you have taken away their status as a free person.
In this sense, most working people in the world are not fully free. If they had direct access to resources, they could hunt, gather, fish, farm, invest, or start a business or start some manufacturing venture by themselves or with whoever wanted to work with them. Instead, the rules of property create “propertylessness,” which in turn indirectly forces the vast majority of people to ask for a job from someone who controls enough resources to give them one. That is, it forces one group of people into become a subordinate of at least one member of another group of people—because we have robbed them of the power to say no to whatever jobs are on offer.
There’s nothing wrong with employment—as long as you choose it freely. Just like there’s nothing wrong with sex—as long as it’s not rape. A choice of bosses without the freedom to say no to all of them is not freedom from forced labor just as a choice of sexual partners without the power to say no to all of them is not freedom from rape.
One of the main reasons I defined indepentarianism as a new ideology is the lack of attention that most of the prevailing political ideologies pay to the injustice of indirectly forced subordination.
The book argues that Universal Basic Income (UBI) is the best way to support ECSO freedom in the modern economy. But UBI support is not synonymous with indepentarianism. Someone could conceivably support indepentarian principles without believing they are best upheld by UBI or a similar policy. Although I hope all UBI supporters will have some interest in indepentarianism, I expect that most of them are not indepentarians. For example, one of the architects of the UBI movement, Philippe Van Parijs, argues for UBI on the theory of justice and/or the ideology he calls “Real Libertarianism,” which is based on very different principles than JPA.
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JPA also differs from other political theories in its treatment of property rights in external assets: that is, assets external to the human body including natural resources and the things humans make out of them. Egalitarians tend to assume external assets are naturally collective property. Left-libertarians tend to assume that external assets should naturally owned individually in equal shares. So-called “libertarians” tend to assume external assets are natural unowned, but ownable by the first person to “appropriate” them by some procedure that tends to lead to highly unequal ownership. JPA assumes resources are “naturally” unowned and unownable. The only way to create a truly justice property rights system would be through a property rights accord, which is probably impossible. In the absence of that accord, the ruling coalition is always forcing a system of property onto reasonable dissenters. Therefore, they have to minimize the negative interference that their system of rights imposes on dissenters and future generations. This, responsibility, I argue motivates both a strongly egalitarian and environmentalist property rights system.
I plan to layout JPA property theory more fully in a future book, entitled, Justice as the Pursuit of Accord. It will argue that this responsibility for an egalitarian property rights system requires a UBI high enough not only to maintain ECSO freedom but a UBI set at the highest sustainable level. However, I suspect that not everyone who agrees with the basic principles of indepentarianism will agree with this part of the argument.
I’m very interested in what people think—for and against indepentarianism. I’m especially interested to know whether there are other indepentarians out there. You don’t have to agree with all I’ve said here to call yourself an indepentarian. If you’re in agreement with enough of it to use the term, please say so in a comment. If you’d like to know more about it, please contact me at karl@widerquist.com. I am not interested in creating an echo chamber. I’m interested in respectful dialogue with people taking these ideas in their own directions. I’m also greatly interested in people who criticize any aspect of valetudinarianism.
There is an idea out there. It is of the transformational variety. It exists in various forms and goes by many names: universal basic income, basic income guarantee, negative income tax, citizen dividend. All of these monikers highlight important aspects of this concept. “Universal” because it applies to everyone with no conditional requirements. “Basic” and “guarantee” to emphasize that, rather than subsidizing luxury or ease, it’s about guaranteeing the right to simply live in dignity and security. “Negative income tax” to illustrate that tax structures can be understood and utilized not only as a way to extract money from the people, but also as a means of fair predistribution to those being underserved by our system. “Citizen” to encourage taking ownership of one’s community and obligations. “Dividend” to emphasize that it is not a form of charity, but a return on an investment, the rightful entitlement every one of us has to our proper share of this country’s resources and opportunities.
“A basic income is a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement.”
-Basic Income Earth Network (BIEN)
This idea, if you haven’t heard of it before, is the simple premise that the government (composed of the people) would deliver a regular, guaranteed, and unconditional amount of income to every person in a society. Some argue that only citizens should receive it, some say legal residents, some suggest only adults, and some insist that every breathing human within the borders deserves the payment. There are valid arguments for all of these viewpoints, and I hope that soon enough we will have the good fortune of debating at great length these strategies on the national scale, because it will mean that the very premise has been accepted into our hearts and consciences as both essential and moral moving forward.
For that to happen, the idea must first inspire the support of the people as a whole, and because the United States is a nation of pride and marketing savvy, nothing sells here without a good, cohesive pitch. As a first order of business, we should settle on a name for our American version of this policy, and I have a suggestion:
The American Dividend
“American” because the only requirement is that you, in fact, are a part of this great country, and we will recognize that with your “Dividend,” your carried interest in the investment you and your family have made and continue to make in this country by merit of your participation in it.
On to the details. Perhaps alarm bells are ringing and red flags are waving for you right now. “That sounds like socialism,” you might point out. I freely admit that it is a socialistic policy, and I argue that an appropriate amount of socialism is essential in a successful and just society – even a capitalist one. We seem, in America, to cling to the naive idea that we can or should only have one or the other, socialism or capitalism. That idea has run its course; we must have both. Neither of these simple, broad ideologies is robust enough to run our complex economy alone, because our economy is not only one of markets, but also of human beings. Markets run by the laws of supply and demand, and are greatly motivated and spurred on by capitalism, the great incentivizer. A purely socialized, redistributive society in which all citizens received the same reward regardless of their contributions could squash the immense growth, motivation, and innovation that capitalism fosters. Human beings, though, survive and thrive by the natural laws of inalienable rights, defined and set out by and for ourselves as entitlements to which we are guaranteed by dint of nothing other than our humanity. Socialistic regulations are required to make sure we adhere to these natural laws. Healthcare, for example, must eventually be socialized and untethered from the need for financial means, because no supply and demand curve can fairly measure the value of health. The demand is infinite, because a sick or dying individual will agree to pay any amount for even a chance at survival. This is where capitalism fails. It eventually localizes far too much power in the hands of the few, the owners of property and corporations, and we find ourselves in a situation closer to extortion than free markets.
My argument even leaves aside our very significant problem with automation. As we continually and irretrievably lose massive chunks of our labor market to machines, these pressures toward economic inequality will exponentially intensify. Properly addressed, however, these same technologies could provide abundance to society rather than greater scarcity and insecurity.
The answer to the question of growing complexity in human and economic markets is not to throw away our hard-won structure as a total failure, but rather to keep tweaking the capitalism/socialism balance to calibrate it to the changing needs of the times. In determining what should be socialized, we can tie it all back into life, liberty, and the pursuit of happiness. Written deep within our American values, these freedoms are the inheritance of all people regardless of circumstance, be it race, culture, gender, age, or financial means. Life requires, at the very least, food, shelter, and health. Liberty and the pursuit of happiness require the ability to choose one’s path without fear of harm or retribution from any authority, and without fear of starvation. Our system has never fully guaranteed these things, and so we have not yet managed to fulfill our constitutional mission statement. The American Dividend can be used to ensure those rights. It can guarantee all people the ability to feed and house themselves as well as the power to say NO to any path in life that doesn’t serve their interests, be it a line of employment or an unhealthy relationship.
If we understand that we have always lived in a blended society of both socialism and capitalism, we can let go of our distrust of these words, our reflexive labeling of them as inherently evil or good, and instead see them simply as tools in the constant balancing act of governance.
Let’s address the two main sticking points the American Dividend will encounter: 1) the fear/resentment of subsidizing laziness by paying hard-earned money for others to sit around and do nothing, and 2) the very prudent concern that it might be simply infeasible to fund a program of such broad scope – essentially the fear that we can’t afford to guarantee these rights to all.
Paying for Sloth?
As to subsidizing laziness, this fear is created and nourished by a skewed perspective in the American capitalist culture that money is the driving motivator for work. We place the dollar on a pedestal far above all others, but money does not deserve this worship. The adage that money is the root of all evil is myopic. Insecurity is the root of evil, and money, or more accurately the lack thereof, is merely our means of expressing and comprehending insecurity. Whereas money is nothing but a tool, poverty is a force. It is the lack of freedom. Because we have been inculcated our entire lives with the idea that money represents value and merit, we have fallen into a misunderstanding of our fellow human beings. We have descended into the weary and preoccupied mind’s fallacy of “othering.” This is to say we have allowed ourselves to perceive the other members of our society as opponents, statistics, enemies, leeches, and threats to our own security. When we are in constant competition mode, we forget the other players for the sake of the game.
When we take the time to truly examine and understand our neighbors, compatriots, brothers, and sisters, however, we see that they are merely reflections of ourselves. We all have hopes and dreams; we all want to be special; we all want to contribute. The current system, which clumsily attempts to reward valuable effort but often disincentivizes hard work and ethics, leads people to despair and apparent laziness, sapping their motivation. In its current form, welfare assistance disappears the moment someone gets a job and increases their income, creating welfare traps. Additionally, other societally valuable endeavors like child-rearing, home healthcare, the arts, furthering education, and entrepreneurialism aren’t deemed worthy of any kind of salary in this economy. They can only be done on faith, at a loss, and at risk of harm to oneself. Throughout human history, a great majority of the movers and shakers of the arts, sciences, and business have had the luxury of pursuing their passions without earning an income from an employer because theyither came from means or they gained access to a benefactor. Wouldn’t it be something new and remarkable if those rich in inspiration and motivation but lacking an inheritance or extreme risk tolerance weren’t forced to spend years of their lives struggling to survive, seeking funding, essentially asking permission from corporations and the owner class in order to pursue the realization of their visions? With guaranteed security and the freedom to choose one’s work and define one’s value, people will contribute their best selves, and we can slowly change our national ethic from one of taking and hoarding to one of contribution. Productivity increases, health improves, and crime decreases in a society that chooses not to allow poverty, thereby permitting its members to be more effective versions of themselves. “Survival job” should not be a term, and a gun to the head is not nearly as effective a motivator in the long term as the ability to pursue meaning in life.
But the Cost!
Now comes paying for it all. Let’s do some simple, back-of-the-napkin, ballpark math for the numerically inclined. To immediately raise every American above the poverty line, we could provide a dividend of $12,000 per year to every adult and $4,000 per year to every child. That’s a bit under $3.25 trillion, which is certainly a huge number, but it’s not a direct expense. Think of it this way: the US GDP is approximately $18 trillion. If a simple across-the-board tax increase was levied on every American to raise that full amount for the dividend, a flat tax plopped down on top of our progressive system, that would mean about an extra 18% in taxes we’d each pay. That may sound like a lot, but since every taxpayer would also be receiving an extra $12,000 in income, then everyone making under $66,000 would come out ahead to some degree. At the $66K breakeven point, an individual would be paying $12K in extra taxes to receive the $12K in dividends. You can plug $66K into this US income percentile calculator and see that this represents over 75% of all Americans who would receive more money under this policy than they would give in taxes to pay for it, thereby directly profiting at the same time as we strive to completely abolish extreme forms of poverty and homelessness. That in itself should make the American Dividend a no-brainer.
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However, a uniform tax levy like this is far from the only source of funding at our disposal. We could fund a large part of the American Dividend in many other ways. Taxes on the use of resources can chip in quite a bit. Taxes on carbon, pollution, minerals, timber, land value, and other natural resources acknowledge that we all own the land in equal share and would simply require companies profiting from and often damaging our commonly-owned property to repay the costs we bear by permitting them to do so. This would also discourage abuse of resources and incentivize more ecologically sustainable innovation. Very small taxes on financial trades would both reduce harmful speculation currently performed on a massive scale by large institutions with black box algorithms – encouraging long-term investment in its place – and it would acknowledge that we all own the financial system in this country and deserve a return from its continued function. Cutting tax exemptions that benefit the wealthy almost exclusively — scrapping the social security tax cap, raising unearned income tax rates to at least the level that earned income bears, cutting the home mortgage deduction, and a host of other such measures — would fund a significant part of the dividend. These measures are long overdue in any case and would represent a strong step forward against the economic injustice in our current system. Finally, raising the income tax rates on those in the very top brackets would acknowledge the fact that these earners have attained their position not only through intelligence and merit, but also through the good fortune of living within a system that allows for a few to leverage their positions to reap enormous returns — a system of laws, infrastructure, and opportunity that has been built over the course of generations, a system that each of us owns in part and deserves a share of. Factor in these methods, and we could pay for much of the dividend. As an example, if we paid for a third of the dividend this way (an entirely feasible amount according to the economists with whom I’ve spoken), it would bring the necessary tax increase down to around 12% and the break-even point to everyone making under $100K. Plug that into the calculator and see for yourself that more than 88% of the country would directly and immediately profit from the American Dividend under this scenario. Someone out of a job or unable to work would receive the full $12,000. Someone making $50K would come out $6,000 ahead. Someone breaking even at $100K will know that they are part of a stable system that will protect them should their fortunes turn for the worse. So, while it will end extreme poverty as we know it, the American Dividend is clearly not just for the extremely poor. It is for all Americans.
What’s more, we haven’t even factored in the savings yet. When people are secure, healthcare costs fall, crime drops, and entire welfare programs can eventually be phased out. This pushes the break-even point even further upward. This is not yet even accounting for the benefits reaped from fueling innovation and entrepreneurialism. Also, unlike the failed policies of trickle-down economics under which much of the money this country makes lands in wealthy bank accounts and simply sits there, money given to the lower classes is generally spent immediately on necessities and better quality of life, equating to a massive boost in the overall economy as businesses gain new customers across the board. It would be presumptuous to predict the actual magnitude of these windfalls, but I would bet you the American Dividend, in very short order, would begin to pay for much of itself.
Bear in mind this is not a panacea, and we mustn’t perceive or promote it that way. The American Dividend will not immediately usher in a new Utopian Age, and there will still be some that need help, but it has the power to effectively end catastrophic poverty and homelessness. It will grant all Americans a real shot at the American Dream. It will mean a simpler governmental system, a change of social and cultural ethics, and a betterment of individual quality of life across the board. And we have the means to do it. All we need is the political will of the people to stand up and demand it.
Give it to Me Straight
So tell me, if this idea of an American Dividend can: 1) end homelessness and catastrophic poverty, 2) establish and reinforce basic human rights and security across the nation, 3) improve healthcare outcomes and reduce costs, 4) reduce crime, 5) encourage entrepreneurialism, 6) act as an economic stimulus, AND 7) result in an immediate net income gain for the vast majority of the population… tell me how can this idea not sell? How can it not sweep the nation? Tell me it’s not an issue of marketing savvy.
And tell me, now that you’ve seen my arguments about the wider economic implications, what would you do with your Dividend? Take a little time and play out the thought experiment. Now imagine what your brother, mother, sister, father, son, daughter, friend, neighbor, boss, coworker, employee, or passing acquaintance would do with it? What would each be able to contribute? What would your community look like? What would America look like?
Zoltan Istvan is running for governor of California in 2018 and has made headlines for his proposal to develop California lands and use the revenue to form a Universal Basic Income for all California households.
Istvan, who is running as a Libertarian and also ran for president in 2016, recently spoke to the UBI Podcast to discuss his proposal and why he believes it is the surest path to a basic income.
By monetizing federal lands in California, Istvan said he wants to “kill two birds with one stone” by eliminating poverty and pushing economic development in the state. Based on his research, Istvan said each California household could receive over $50,000 annually if the 45 million acres of unused land were developed.
“If we developed land and resources in California, we would be able to afford a basic income,” he said. “I’ve promised to do all of this without raising taxes.”
This plan, he said, would “lift 19 million Californians out of poverty.”
“It doesn’t matter what party you are running for, that is totally unacceptable,” Istvan said.
“With this large of a basic income, the welfare system would naturally go away because they would not have to rely on the state,” Istvan said. He expressed that this form of basic income will also “avoid the traditional opposition from business interests because it would open new development opportunity.”
“Implementing the basic income this way would attract support from both sides,” Istvan said, “because it would develop the economy and help the poor.”
Some of the primary criticisms of this plan are likely to come from environmentalists. But Istvan, who once worked for Wild Aid and National Geographic, said that environmentalists should not be worried, and eliminating poverty should be a high priority for the left.
“We can make all the arguments we want for why preserving the environment is good, but for me feeding people, giving them the right education, these are things that matter more,” Istvan said.
To ensure that the land was preserved, Istvan said the land would be “leased, not sold”, and the land will have to be returned to the state in its previous condition or better. The plan will not involve national parks.
“The environment can be preserved through radical green technologies that are just on our front door,” he said.
If Istvan is elected, he said he would immediately begin pushing this proposal. Once the revenue starts coming in from the development, Istvan said he could begin handing out a partial basic income.
“I want to transform poverty. It is just insane to me as somebody who loves technology and science that in the Twenty First Century we have a system where 40 percent of Californians are at the poverty line,” Istvan said. “This is something that does not just sound wrong to me, it sounds outright insane.”
Most transfer payments go to people who are not at the time also paying taxes to support it. For example, almost no one both pays for and receives Unemployment Insurance, the Earned Income Tax Credit, Temporary Assistance for Needy Families, disability insurance, Medicaid, and so at the same time. The vast majority of people pay for Social Security at one time and receive it at another time. The net issue so important to UBI is negligible or nonexistent for all these policies.
