The book, “The Ethics and Economics of the Basic Income Guarantee:” Free Version available

by Karl Widerquist | Sep 17, 2019 | Opinion, The Indepentarian

The Ethics and Economics of the Basic Income Guarantee (2005) edited by Karl Widerquist, Michael Anthony Lewis, and Steven Pressman, published by Publishing is availed in a free version at this link.

This book available because most publishers allow authors and editors to post early version for free on their personal websites. That means it has lots of typos and other problems. But it’s a reasonable approximation of the final version. Please see the published version if you can. It’s available at university libraries.

Summary from 2005

This book is divided into four Parts. They cover the history of BIG, philosophical debates over the vision of society it represents, sociological and economic debates concerning its effects, and finally some practical proposals for a BIG in several countries.

The four chapters in Part One trace the history of the BIG proposal from its beginnings in the late eighteenth century to the present with special emphasis on the guaranteed income movement of the 1960s and 1970s in the United States.

Steven Pressman

In chapter 2, Fred Block and Margaret Somers examine the relationship between the welfare reform passed by the United States Congress in 1996 and Speenhamland, a British town that (in May 1795) decreed the poor were entitled to certain public assistance. As the program spread among English parishes, it generated a great deal of controversy. Critics argued that it provided relief to the able bodied, and thus reduced work effort and increased the local tax rates (to support the poor). Block and Somers revisit the Speenhamland episode. Drawing on four decades of recent scholarship, the authors show that Speenhamland policies could not have had the consequences attributed to them. They then seek to explain how the Speenhamland story became part of the accepted wisdom regarding public assistance to the poor and how it contributed to the 1996 welfare reform legislation in the United States. This argument has important consequences of BIG proposals, since it points out that income guarantees have not had negative consequences in the past and so they should not be rejected for this reason.

In chapter 3, economists John Cunliffe and Guido Erreygers focus on the historical antecedents of contemporary basic income proposals. Specifically, they focus on proposals put forth by the nineteenth century American writers Cornelius Blatchly, Thomas Skidmore, and Orestes Brownson. They argue that these writers may have been influenced by the ideas of Thomas Jefferson and Thomas Paine, American revolutionaries whose ideas about economic policy and distribution bear striking similarities to current basic income proposals.

Robert Harris gives an inside account, in chapter 4, of the politics behind the guaranteed income movement of the 1960s and 1970s. The movement grew out of dissatisfaction with the conditional welfare system that had been in place since the New Deal, which was failing to eliminate poverty either for workers or for people unable to work, and which was causing significant poverty traps. Many people on the left and right began to see the guaranteed income as a simpler and more effective system for both the working poor and those on social assistance. Nixon’s modified guaranteed income was overwhelmingly passed by the House of Representatives, but failed narrowly in the Senate thanks to opposition from both left and right and to lukewarm support from Nixon himself.

One offshoot of the guaranteed income movement was that five NIT experiments were conducted in the United States and Canada during the 1970s. These experiments divided a group of subjects into two groups. One group was part of a negative income tax plan; the other group was a control group that was subject to the regular United States income tax. The experiments were designed to measure the impact of NIT on labor force participation and marital dissolution in a rigorous scientific manner. These experiments were not only important for the basic income guarantee, but they were also the first large scale social experiments and had farreaching influence on policy research in a number of different areas. Some of the original scholars from the negative tax experiments reunite in chapter 5 to discuss their importance after 30 years. The panel members discuss the political reasons for setting up the experiments and their results. Although the results were largely positive, showing small workdisincentive effects and important effects on health, educational attainment, and well being, some politicians and pundits used the experimental findings to help quash the NIT.

Part Two examines the philosophical debate over BIG. The papers in this section of the book discuss various justifications for a BIG and compare the case for a BIG to the case for other types of income support plans.

In chapter 6, political theorist Almaz Zelleke examines political rights and BIG. Her concern is that social thinkers on both the right and left tend to agree that income policies should have work or social contribution requirements attached to them. After discussing and criticizing the arguments of thinkers such as Laurence Mead, Mickey Kaus, Anthony Atkinson and others who hold this view, she puts forth an alternative—the market should be regarded as a sphere of citizenship no less important than the polity. That is, the liberty that we grant to United States citizens is tied to the right to partake in the market as much as it is tied to the right to partake in politics. Thus, we should view income that lets people participate in the market as analogous to voting rights that let people take part in the political process. We grant people the right to vote and, likewise, the basic income should be viewed as a right to “vote” in the marketplace.

Philosopher Michael Howard’s article (chapter 7) is largely a discussion of the liberal neutrality principle associated with the philosopher John Rawls, and its relevance to the basic income debate. The neutrality principle roughly stipulates that an acceptable theory of justice cannot be biased toward any particular substantive conception of the good life. Howard’s thesis, presented with the argumentative and analytic skills philosophers are known for, is that any income policy that requires some contribution to society is biased toward those whose conception of the good life involves such contribution; a basic income isn’t biased in this way, rendering it the more just policy.

Michael A. Lewis

In chapter 8, Karl Widerquist defends basic income against the “exploitation objection,” which asserts that a basic income allows individuals to benefit from social cooperation without contributing to society, thereby exploiting those who do work. He specifically addresses Gijs van Donselaar’s version of this objection, and argues this objection has three critical flaws. First, the conclusion that a basic income is exploitive relies on holding the poor responsible for the level of scarcity in the world. Second, van Donselaar treats work rents differently than other rents. Third, van Donselaar’s definition of exploitation is unworkable in practice, and the connection between it and a case against basic income is weak.

In chapter 9, Michael A. Lewis enters the debate between basic income and the basic stake proposal put forth by Bruce Ackerman and Anne Alstot. This proposal stipulates that a lump some of $80,000 be provided to each high school graduate at age 18 if the recipient plans to attend college or age 21 if she does not plan to do so. Lewis addresses the question of whether basic income or the stake is better at promoting freedom. He suggests that if one makes assumptions associated with rational choice theory it would seem that the stake is more freedom promoting. However, he goes on to argue that there appear to be pervasive patterns in decision making that might result in people allocating their stakes in ways they might later regret, and that a basic income might be more freedom promoting because it would constrain people’s ability to make such decisions.

While Part Two is philosophical in its orientation, Part Three is empirical. The papers in this section address questions concerning the real world impact of a BIG and its alternatives.

Steven Pressman, in chapter 10, addresses one of the key tradeoffs faced in a BIG plan—the lack of incentives to work hard and make more money that are likely to occur as a result of giving people a sum of money with no strings attached. Generating greater equity with a BIG will therefore also reduce economic efficiency. If these efficiency losses are large enough, reduced efficiency would constitute a good case against BIG. Using an international dataset that stretches back over 20 years (the Luxembourg Income Study), Pressman examines the tradeoff between equity and efficiency empirically. He finds negligible efficiency losses due to government redistribution efforts, and concludes that any efficiency-equity tradeoff is likely to be small (as long as redistribution efforts remain in their current range).

In chapter 11, economist James Bryan focuses on poverty reduction as a central goal of any income policy, but also attends to the effect such policies have on work incentives. Bryan looks at the extent to which the mid-1990s welfare reforms reduced poverty by focusing on trends in poverty before the reforms, from

1993–1995, and trends afterwards, from 1995–1996. He arrives at three conclusions: (1) poverty among families with children declined in the post-reform period but the rate of decrease was slower than during the pre-reform period, (2) among poor single-mother families there were reductions in disposable income, and (3) these reductions in disposable income were only partially offset by cash and in-kind programs such as the earned income tax credit (EITC) and food stamps. Bryan argues that a basic income guarantee could decrease poverty to a larger extent while creating smaller work disincentives than the current package of the Temporary Assistance for Needy Families (TANF), workfare, food stamps, and EITC programs. He attributes this to the high benefit reduction rate in current programs compared to the lower reduction rates that would obtain in basic income plans. From an economic point of view Bryan sees two arguments against the basic income. First, the volume of transfers needed to achieve an acceptable minimum income guarantee may be very high compared to more highly targeted programs. Second, to maintain work incentives for beneficiaries, the benefit reduction rate must be low. This would, in turn, create a small net donor population, thus requiring a high marginal tax rate and generating a larger work disincentive for this group.

In chapter 12, Thierry Laurent and Yannick L’Horty examine the work incentive problems of a basic income guarantee. They argue that most previous studies of the work incentive problem take a static approach. People are thought to balance just the income from working now against the income received now from a guaranteed income plan. However, Laurent and L’Horty note that there are also dynamic considerations. People with jobs today are likely to get promotions and higher pay in the future. So the real choice is a dynamic one, where individuals must balance both the short- and long-term benefits of work against the BIG. The authors then model labor force participation in an intertemporal framework, and use data from French labor market surveys to test their model. Their results show that there are differences between short-run back to work incentives and long-term problems. They also show that there is no obvious link between short- and long-run incentive problems. Finally, their results explain why some workers may have an incentive to accept jobs that do not pay, while others do not.

In chapter 13, Stephen Bouquin presents research results on the effects of tax-credit systems in Europe that use “in-work benefits,” which are meant to be combined with the wages of the working poor. He examines the labor market policies of three European countries that have been increasingly relying on inwork benefits, including the United Kingdom (Working Tax Credit, Income Support), France (Tax Credit), and Belgium (several policies). He finds evidence of what he calls the “Speenhamland effect” on wages. That is, in-work benefits can reduce real wages, as employers capture some or all of the benefits (intended for workers) by reducing the wages they pay. Through these effects, expenditures intended to benefit poor workers end up benefiting their employers. The existence of Speenhamland effects raises serious doubt for any policy based on forcing individuals into the paid labor market.

BIG also raises practical questions. How much would a BIG cost? How can it be financed? What is the optimal level of BIG, given tradeoffs between poverty reduction on the one hand, and costs and work disincentives on the other hand? Part Four, the final section of the book, contains chapters that examine the political prospects of BIG and chapters with nuts and bolts proposals for making basic income work in various countries around the world.

In chapter 14, Nicoli Nattrass and Jeremy Seeking discuss the possibility of implementing a BIG in South Africa. South Africa is the only country in the world with a major grassroots movement pushing for BIG, and it has a unique political and economic situation that make BIG politically feasible. The authors argue that BIG has been on the agenda because of the coincidence of four main factors. First, the country already has a system of public welfare that is unusually extensive in its coverage, unusually generous in its benefits and unusually redistributive in its effects. Second, poverty persists due to unemployment and the absence of subsistence agriculture, and there is little prospect of reducing poverty through job creation or land reform in the short- or medium-term. Third, the existence of an extensive system of private welfare, through remittances sent by employed workers to rural kin, means that it is in the interests of the powerful trade union movement to support a BIG. Fourth, the extent of inequality, paradoxically, makes it easier to finance a BIG based on redistribution from the rich to the poor.

Karl Widerquist, credit: Enno Schmidt

In chapter 15, Brazilian Senator Eduardo Suplicy discusses the movement for a BIG in Brazil. Suplicy and others have been pressing for BIG at the federal, state, and municipal level since the late 1980s. The measure was twice approved by the Brazilian Senate but languished until the Workers’ Party (of which both Suplicy and President Lula are members) took control of the presidency. Success was finally achieved in January 2004 when President Lula signed a basic income bill into law. The new law gives the executive wide authority to determine the timing of the phase-in, but it authorizes the gradual introduction of a small basic income guarantee within the next eight years.

In chapter 16, political scientist Yannick Vanderborght discusses recent debates over BIG in Belgium and the Netherlands. Reviewing the various arguments both for and against the basic income, he concludes that the supporters of a basic income have an uphill battle. Vanderborght views the main obstacle to the basic income in these two countries as the widely held belief that able-bodied recipients of income assistance should make some social contribution in return for assistance. He concludes with a discussion of the so-called “participation grant,” a policy that would provide a universal grant to all citizens or residents as long as they engaged in some socially beneficial pursuit. Such a pursuit does not necessarily mean one has to sell her or his labor. Thus, providing uncompensated (by the market) care for children, or for other friends or relatives, and a host of other “outside the market” activities would qualify. Vanderborght argues that such a policy might have a more promising future than the “pure” basic income.

In chapter 17, Derek Hum and Wayne Simpson provide some cost estimates for several possible Canadian BIG programs. Employing two different definitions of poverty, Hum and Simpson estimate that a BIG to eliminate poverty in Canada would cost between $141 billion and $176 billion (or around 15 percent of Canadian GDP). This, they believe, is too costly and would not be politically acceptable in Canada. They also provide estimates of alternative BIG plans that provide income guarantees below the Canadian poverty line. These programs would cost little more than current income transfer programs because they include a negative tax or claw back of the income guarantee. Hum and Simpson find that these programs would do much less to reduce poverty and the income shortfall facing the poor. They conclude by noting that there are many possibilities between these two extremes; these plans would not be very expensive, yet would be relatively effective in reducing poverty in Canada.

In chapter 18, Randall Bartlett, James Davies and Michael Hoy explore how to set up a negative income tax in the United Kingdom. Their goal was to formulate a set of programs with a guaranteed income and a single flat tax rate that collects the same amount of money as the existing United Kingdom progressive tax system. They then test whether their negative income tax is as progressive as the current United Kingdom tax and transfer system. Their findings are that it would be relatively easy to structure a negative income tax for the United Kingdom that is more equitable than the current system and that does not require high marginal tax rates.

The chapters in this book bring the debate over basic incomes into a contemporary and eclectic context. They provide many different perspectives to the BIG proposal in specific and to antipoverty policy in general. And they show that BIG is a feasible policy alternative.

The Ethics and Economics of the Basic Income Guarantee (2005) edited by Karl Widerquist, Michael Anthony Lewis, and Steven Pressman, published by Ashgate

A free version is available at this link.

The Future We Need

by Guest Contributor | Sep 11, 2019 | Opinion, The Indepentarian

This is a guest post by Rahul Basu for The Indepentarian Blog. Welcome, Rahul.

Author: Rahul Basu

The Future We Need

This is a comment on Karl Widerquist’s excellent proposal for a People’s Endowment. I’m a member of The Future We Need (TFWN), a global campaign to make the intergenerational equity principle foundational for our civilization. Similar to Karl, the core idea is that we, the present generation, are simply custodians over what we inherit. We must ensure that future generations inherit what we did. Ideally, we would leave a bequest. Importantly, if we fail to follow this rule, then each successive generation becomes poorer with civilization collapse and human extinction as the final result. And it is clear that our current civilization has been consuming its capital base, bringing these possibilities into fruition.

Capital vs revenue

We make a critical distinction between capital (the corpus of our inheritance) and revenue – the surplus after we ensure the corpus is kept whole. Minerals, being non-renewable, are purely capital in nature. Broadcast spectrum, regenerated each instant, is purely revenue in nature. When companies (like nuggetsbygrant.com) invest in minerals that they extract and sell, the entire proceeds must only be used to fund new intergenerational assets to ensure the endowment corpus remains intact. In the case of minerals, we insist that the proceeds only be saved in a future-generations fund (FGF) as Karl also suggests.

Only the real income from the endowment, ie, the income after compensating for inflation, may be used or distributed. By contrast, the fees for the broadcast spectrum could be used as it is a renewable resource without first saving it in a future generations fund. Reasoning from property rights logic, we insist that all such recurring income from public endowments must be distributed only as a citizen’s dividend. A diversion of the recurring income to the budget is effectively imposing a per head tax. Of course the government may tax the people, even the dividend, through explicit legislation, thereby strengthening the social contract.

Defending the commons

If we reason from Ostrom’s principles for long lived commons, an important aspect is that the commoners must benefit directly from the commons. In the absence of this direct benefit, there is little reason to defend the commons, and it will be lost. Alaska’s famous Permanent Fund Dividend was explicitly designed to link Alaskans to their Permanent Fund and to help defend it for future generations of Alaska. The endowment income and especially its capital are a great political temptation. As long as the income is absolutely equally distributed, it affords no help in creating a winning electoral coalition.

Unlike Karl, who suggests a 50:50 split of the income between a dividend and the budget, we insist that the only distribution from the endowment be as a Citizen’s Dividend. The primary reason is that any other division between the dividend and the budget is fundamentally arbitrary. Even if only 1% is currently diverted to the budget, through budget crises, politicians will attempt to capture more until nothing is left. Only a rule that distributions must only be through a dividend can be defended against political attack. And without the dividend, even the fund will come under attack. While protecting the endowment for future generations is the principal reason behind our rules, our posts Why income distribution only as Citizen’s Dividend and Why 100% to Permanent Fund deal with other common objections to this austere but logical structure.

Henry George

Sweden

Henry George argued that increases in property prices have the impact of reducing wages as low as possible. He also argued that property values increase due to society. While a piece of land in Central London is worth much more than equivalent land in a remote area, the increase in value is due to society creating London, not due to the acts of the professional property manager or the owner. Henry George argued that a land value tax would compensate society for its contribution, while reducing incentives for keeping land idle.

In a similar vein, Dag Detter, the former president of Statsföretag, a Swedish government holding company and national wealth fund, created to centralize and consolidate state ownership of public commercial assets, argues that there are many idle assets on government balance sheets that if better utilised can conservatively provide $2.7 trillion a year. In fact, it turns out that most governments do not even know what real estate assets they own.

Norway

In the public sphere, Norway’s management of its North Sea oil endowment, in particular its rule of saving all the proceeds from selling its oil in an intergenerational fund, is considered one of the leading examples for nations to emulate. There is an interesting back story. Norway separated from Sweden in 1905. One of the first issues was to deal with hydro power plants that had just been set up by foreign companies. The then Minister for Justice, Johan Castberg, was influenced by Henry George and the US progressive movement (usually thought to start with the publication of Henry George’s Progress and Poverty in 1879). He put in place laws that permitted the hydro power plants to run, but that they would revert to public ownership after 60 years. Today, this is called a BOT – Build-Operate-Transfer.

The laws were called “waterfall” laws. The name actually refers to the idea that the hydro plants “fall back” to public ownership, the legal doctrine of escheat. There is also a connection to Intellectual Property rights regimes, where the IP reverts to public ownership after a period of time. Conceptually, this seems to indicate that private ownership of property is at the sufferance of the commoners, and all private property could be required to revert to the commons over time.

Returning to Norway. These hydro plants were returning to public ownership in the late 1960s. Norway’s first oil field, Ekofisk, was discovered in 1969, with this experience fresh. Apparently, this influenced a number of aspects of how Norway managed its oil for the benefit of the people first but in partnership with private enterprise.

Singapore

Karl suggest that the fund corpus be managed such that it grows and we leave a bequest for future generations. This is something that TFWN supports as well. Temasek, one of Singapore’s two large SWFs, follows a more challenging rule that its corpus must remain constant as a share of Singapore GDP. In effect, this implies reinvesting not just to keep pace with inflation, but to keep pace with the growth of the economy. Consequentially, only the return in excess of the economy growth rate can be distributed. This rule has the effect of keeping the endowment proportionate to the overall economy. If the rule of distributing income above inflation is followed, the endowment would remain static while private property would increase, making the endowment less and less relevant. As a corollary, it also puts a very high hurdle rate for investments from the fund. It is worth noting that Singapore’s model for management of its land (90% still in public ownership, 80% living in public housing) fits well with the ideas of Henry George. And interestingly, Singapore also occasionally pays a bonus to its citizen’s when the budget is in surplus.

Framing is crucial

Karl’s article contains a couple of seemingly minor terminology issues that actually have very significant consequences.

Erroneous government accounting incentivizes extraction

There is an important framing error in the use of terms such as “windfall revenue”, “income” or “earning” in connection with the proceeds from selling oil. Selling the crop of the family farm generates revenue. However, the proceeds from selling the family farm is capital, not revenue. The use of “windfall revenue” hides the true nature of the oil sale. The origins are in government accounting and reporting. Governments worldwide, following IMF’s Global Financial Statistics Manual 2014, erroneously treat the proceeds of selling their shared mineral endowment as “revenue”. More extraction = more revenue = good. Hence the enthusiasm to open the Arctic Refuge to oil exploration and the opening of Pebble mine in Bristol Bay, both in Alaska.

If minerals are seen as a shared inheritance, then different questions arise. Why is the mineral endowment being sold instead of keeping them for the use of future generations (who may have less environmentally destructive practices)? Why now? Will Alaska achieve zero loss or will some of the value be captured by the extractive companies by changing terms in their favor through political contributions, lobbying and bribes?

As Karl has pointed out, it is apparent that Alaska is selling its oil for lower than its true value. (Note that the losses due to under-recovery of the oil value is effectively a per head tax on inherited wealth – the value of the endowment reduces and everyone loses equally.) Proper accounting would require these losses to be made good. Seen clearly, more extraction of this nature = larger losses = bad.

Further questions arise. Will the entire proceeds be saved in the Alaska Permanent Fund? Will the only distribution of the income be through the Permanent Fund Dividend? Nothing less will ensure that future generations receive their rightful inheritance.

As Karl points out, Alaska saves less than 20% of the proceeds from selling their oil wealth in their Permanent Fund. And recently, a bill has been enacted providing for the use by government of a part of the income of the fund. They are consuming their shared mineral inheritance, cheating all future generations of Alaskans. If ordinary Alaskans understood this, surely both the Arctic Refuge and the Pebble mine decisions would be questioned.

What should be called a tax?

A related important framing issue plays an important role in the Alaskan struggle to protect their Permanent Fund and Dividend. Revenues, income and earnings imply something has been provided in exchange. Taxes are unrequited payments, ie, payments without any directly reciprocal consideration. Grover Norquist’s Americans for Tax Reform’s Taxpayer Protection Pledge is signed by most US Republicans and requires voting against any new taxes or tax increases. As a consequence, elected Republicans only vote for tax reductions.

Alaska has four broad choices in balancing its budget: (a) reducing spending, (b) reducing its losses from selling its oil (though ideally this should go to the Fund), (c) imposing an income tax or increasing the sales tax rate, and finally (d) diverting the income of the Permanent Fund to balance the budget.

As we have seen, income and sales taxes are opposed. The consideration for selling oil is often called an “oil tax”. However, calling them a tax means Republicans adamantly oppose increases, even when all evidence points to massive unrecognized losses. Any diversion of the PF earnings to the budget is in effect a per head tax (or a negative basic income). But since the diversion to the budget isn’t called a tax, Republicans are happy to support it. So the only options seem to be to cut spending or divert the Permanent Fund earnings.

If the terminology changed – we used “price for selling our oil endowment” instead of “oil taxes”, and “a per head tax” instead of an unremarked budget appropriation, then incentives for the Republican politicians change. Since spending cuts alone cannot balance the budget, increasing the price of the oil (ideally it should all go to the Permanent Fund) or explicitly imposing a tax are the only feasible options.

All of this is hidden by the terminology we use, underpinned by the error in government accounting. The IMF must amend its GFSM 2014 to treat the proceeds of selling mineral wealth as capital received in exchange, not “revenue”. And every single individual must change the terminology used to reflect the correct situation. Without this, the incentives to extract and consume our natural resource endowment will inevitably lead to civilization collapse, perhaps even human extinction.

Conclusion

The idea of a people’s endowment is extremely powerful. It hides behind the success of nations such as Norway, Sweden and Switzerland. It is important that ordinary people share in the benefits of the endowment to ensure its protection. Unfortunately, even the language we use, underpinned by a crucial accounting error, is a significant contributor to the increasingly likely end of our civilization.

About the Author

Rahul Basu is the Research Director of Goa Foundation, an environmental NGO in India. The Future We Need is a global movement asking for natural resources to be viewed as a shared inheritance we hold as custodians for future generations. This work is based on the practical work of the Goa Foundation. Whose Mine Is It Anyway is a campaign to make government finances and national income statistics treat mining as the sale of minerals. Read Mitigating the Resource Curse by improving Government Accounting and Government Accounting and the Resource Curse – Response to FAQs. IPSASB has started on a new International Public Sector Accounting Standard for natural resources. The Goenchi Mati Movement is advocating these principles for all mining in Goa, India. A joint campaign has successfully asked for these principles to be part of India’s National Mineral Policy.

Book review of “The War on Normal People”

by Karl Widerquist | Sep 1, 2019 | Opinion, The Indepentarian

The War on Normal People: The Truth About America’s Disappearing Jobs and Why Universal Basic Income Is Our Future

By Andrew Yang, Hachette Books; 304 pages

Review by Karl Widerquist

NOTE: This article is reprinted from Delphi – Interdisciplinary Review of Emerging Technologies.
The original article and citation is:
Widerquist, K., “Book Review ∙ The War on Normal People: The Truth About America’s Disappearing Jobs and Why Universal Basic Income Is Our Future.” Delphi – Interdisciplinary Review of Emerging Technologies, Volume 2, Issue 1 (2019), 59 – 60

Andrew Yang is a technology entrepreneur who is taking three years away from his business to run for the Democratic nomination for president. His book, the War on Normal People, explains why Basic Income is the centerpiece of his platform.

This book review comes from the perspective of a political theorist who has been writing about Basic Income since the 1990s. Yang’s candidacy is one of many signs that the Basic Income movement is experiencing a substantial wave of support right now. But he is not necessarily the candidate of this extremely diverse movement. Basic Income comes in many forms and can go with almost any other set of policies. Whether any particular Basic Income supporter will also support Yang will depend on a host of other issues, but they should all take a serious look at his candidacy and his effort to make Basic Income an issue in the 2020 election.

This book communicates very clearly that Yang’s heart is in the right place. He’s not some narcissistic business owner running for president on the strength of his ego. He is very aware of the trail of luck and privilege that put him where he is today. He stresses that the American economy is not really the land of opportunity where anyone can make it if they try. It is full of injustice and unfairness. Most people will never get an opportunity to do what he did. And he points out clearly, the opportunities available to most normal people are shrinking.

Andrew Yang with Jason Burke Murphy

Yet, Yang is no opponent of capitalism. He sees it as an incredibly productive and useful system in the right institutional setting, but the book’s title, The War on Normal People, typifies his perspective: even as our technology has made greater prosperity and opportunity possible, legal and institutional changes have reduce opportunities for all but the luckiest and most privileged Americans. The current generation of Americans is the first that can’t expect to improve substantially on the economic situation of their parents, and might well be doing worse.

Many factors have combined to cause this problem. Automation makes it possible to produce more goods with the same amount of labor, which ought to be good for everyone. But most people are dependent on labor for their income. They spend their lives building up skills that are suddenly outmoded by technology, forcing them into the already crowded lower end of the labor market.

Automation has produced enormous benefits for the people who own the machines and the people who lend the money to finance machines. And it’s created a few wonderful jobs for people who happen to have the right skills, but there are only so many of those wonderful jobs to go around, and not all of them have certain futures either.

For normal people automation has produced both lower wages and less certain employment.

Yang argues that the side effects of automation are only getting worse. Trucking companies are already in the process of replacing truck drivers with self-driving trucks, a direct threat to millions of drivers and an indirect threat to millions more people who work in supporting sectors, such as truck stops.

College tuition has gone up exponentially, and people have had to take out increasingly large loans to pay for it. According to Yang, people in their twenties and thirties today have so much educational debt that they are increasingly unable to buy homes, start businesses, or take advantage of their salaries.

The healthcare industry has also saddled people with increasing debt-a problem no other country imposes on its people. According to Yang, many Americans-even some who think they have good health insurance are vulnerable to bankruptcy if they have an accident or come down with a disease that isn’t adequately covered by whatever insurance they might have. It seems to be so easy for people to fall into bankruptcy these days, so it’s important that people budget their spending to make sure they are financially stable. However, if this can’t be done and people are on the verge of bankruptcy, it might be worth contacting a bankruptcy attorney San Diego, for example, to see if they can help people struggling with financial troubles.

One thing technology has given us is greater distraction. Yang argues that video games and social media are cheap, easily accessible, and built to draw you in. The decline in labor hours among young American men has been mirrored almost exactly by an increase in hours spent playing video games. Millions of American men in their 20s live with their parents and play video games 40 hours per week. In the short run, the instant satisfaction video games provide can make up for a lot of frustration and unhappiness in the rest of people’s lives. Whilst this may be true for some people, a lot of people around the world have actually been making money from these video games. By using platforms, like Twitch, people can stream themselves playing these games live. They can, eventually, start making money. To do this, people would just need a computer and then they would have to find out where to get ps2 roms. That would allow them to play those PlayStation games from their computer. They can then stream them live and make some money.

Yang points out many other serious problems that need to be fixed and that most American politicians are ignoring, but the one serious drawback of this book is that some readers might find it drawing their attention more to the severity of the problems Yang points out than to the promise of the solutions he suggests. This is unfortunate, because Yang is optimistic and offers serious and realistic solutions.

Any reader who feels despondent by Yang’s pull-no-punches statement of the problem, should reread the parts of the book stating Yang’s solutions, and concentrate on the ultimately optimistic, uplifting nature of his message.

Yang supports a host of policies that put him firmly in the most progressive wing of the Democratic Party. He wants single payer healthcare, also known as, Medicare for all, and an end to medical debt and bankruptcies. He wants campaign finance reform to get money fully out of politics. He wants free or cheap college tuition and an end to student debt.

But the centerpiece of his book, and what most separates him from other progressive Democrats, is his unequivocal support for Basic Income. Other progressive Democrats and even some mainstream Democrats have said favorable things about Basic Income. But even some of the most progressive Democratic elected officials, such as Alexandria Ocasio-Cortez, have directly endorsed no more than the ‘exploration of it.

Yang wants a full, national Basic Income right away, and he wants it for good reasons. He doesn’t see it as a way to toss out a few tidbits to the poor but as part of the solution to the economic unfairness and injustice in the world today. Retraining will not cushion the disruptions caused by automation. Education will not end the stagnation (or reverse the decline) in wages that most normal people are experiencing. Yang wants to give them a boost and one that is not dependent on their employers.

He doesn’t make the mistake (common among tech entrepreneurs) of portraying Basic Income as something we’ll need someday when all labor is replaced by machines. He portrays it as something that’s needed right now and is perhaps already overdue after the last 40 years of automation-fueled economic growth have failed to deliver either higher pay or shorter working hours to normal people.

The Basic Income Yang begins with is too small, only $12,000 per year and not adequately covering single parents and their children (the poorest demographic group in the United States), but it’s a good start. That amount won’t end poverty, but it will be an enormous improvement for everyone living on the margins and a significant boost to the middle class. I had the chance to speak to Yang, and he told me he chose that plan because he needed something that was fully costed already. It’s just a start; he’s open to much more.

Yang’s book provides an excellent statement of the severe economic problems facing normal people in America right now, and it makes a compelling case that Basic Income is an essential part of the solution. Yang is a solid standard-bearer for the Basic Income movement. Whether he can bring Basic Income fully into the debate during the 2020 U.S. Presidential election remains to be seen.