Imagine you’re in a coffee shop when two older gentlemen – we’ll call them Charlie and Marty – take a seat next to you. Quickly you sense that these two seem to be unlikely friends who haven’t seen each other in awhile. Against your better judgment, you start to listen in on their conversation:
“Look,” Charlie is saying, “our nation is wealthier than any in history. Just think: every year, we redistribute more than a trillion dollars of wealth to provide for retirement, healthcare, and the alleviation of poverty. But what I don’t get is that we still have millions of people without comfortable retirements, without adequate healthcare, and living in poverty. With all our wealth, isn’t it reasonable to expect that we should have made a dent in some of these matters by now?”
“Yes, yes,” Marty agrees. “We haven’t solved this stuff because we keep trying to identify and address the so-called ‘root causes’ of poverty one by one. We tend to think we can make people less poor by providing them with some magic bullet – better housing, better education, better support for working families, and so on.”
“But that’s clearly not working,” an exasperated Charlie interjects. “Only a government can spend so much money so ineffectually.”
You’ve heard this debate before, you think: one person says more government is the answer, the other just the opposite. But just before you turn back to your computer and put your headphones on, Marty draws you back in.
“All these efforts have a common problem,” he says. “They are painfully indirect. The problem is not government as such; it is that we always try to solve poverty by solving something else first.”
This point is difficult to deny. Why do we always try to solve poverty by solving something else first? You lean in just as Charlie says emphatically, “You know, you’re right. Perhaps the solution is just to give that money to the people.”
“Yes,” Marty says, “isn’t the simplest approach usually the most effective? If we’re gonna get anywhere with poverty alleviation we should take it on directly, like…what was that experiment in the 1970s called again, Charlie?”
“A Universal Basic Income,” Charlie replies. “That’s what it’s called.”
I really did overhear a version of this discussion in a coffee shop, albeit the conversation was staged in the concluding chapter of Andy Stern’s recent book, Raising the Floor. After leaving his post as the head of America’s largest labor union (the Service Employees International Union), Stern spent five years traveling the country to investigate various components of what we describe as flexible capitalism, most importantly the ways automation technologies may dramatically shrink and reconfigure the labor force. Only in the concluding chapter, however, does Stern explore the Universal Basic Income as a promising proposal for a world awash in disruption.
The imagined conversation above is paraphrased from Stern’s juxtaposition of direct quotes by two unlikely conversation partners: the libertarian-leaning sociologist Charles Murray (in the news recently for being shouted down in an invited lecture at Middlebury College), and Martin Luther King, Jr – both of whom, despite their clear ideological differences, express support for some version of a Universal Basic Income in their writing.
In fact, the Universal Basic Income has a long history of forging odd coalitions. Whether it be the “negative income tax” Milton Friedman advocated for in Capitalism and Freedom, new forms of philanthropic giving in the developing world by organizations like GiveDirectly, the National Commission on Guaranteed Incomes established by Lyndon Johnson’s administration in 1967 (and subsequent experiments in the late 1960s and early 1970s overseen by none other than Dick Cheney and Donald Rumsfeld), or current experiments like YCombinator’s project to give Oakland residents monthly cash to “promote freedom” and then gather data as to “how people experience that freedom,” the appeal of the UBI has consistently cut across America’s political divide.
Our task this week is simply to describe the UBI in its multiple variations. Next week we’ll provide some ethical analysis of the various proposals.
The basic principle on which UBI proponents agree is described well by YCombinator’s Sam Altman: “We think everyone should have enough money to meet their basic needs—no matter what, especially if there are enough resources to make it possible.” Despite sharp disagreements on all sorts of other political issues, proponents of the UBI agree that the most just and effective way to address economic insecurity in America is through direct distribution of cash, no matter how “deserving” someone is and with little to no direction as to how that cash is spent.
Beyond this basic commitment, four basic groupings arise:
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© 2017 New City Commons
On the Libertarian Right, theorists like Charles Murray advocate for the UBI as a replacement for the vast majority of government-administered social programs. As Murray puts it, what differentiates their UBI from others is that it is not an “add-on” to a social welfare system that, in his view, has proven incapable of providing the solutions it promises.
On the Social Democratic Left, however, the UBI does not necessarily replace the modern welfare state, but merely supplements it. These figures frequently point to societies that have successfully gained and redistributed income and royalties derived from public goods (most often oil or mineral extraction) to citizens at large. The first example of this is actually the Alaska Permanent Fund, founded in 1976 as a way of socializing the gains of Alaska’s booming oil business, which distributed $1,022 directly to every eligible Alaskan adult in 2016. In asset-rich societies, something like a UBI is an attempt to manage abundance equitably by giving some share of nationalized income back to the citizenry. (For a fascinating example of this debate, see Norway, currently considering how to steward the largest sovereign wealth fund in the world). As Sean Butler put it in Dissent Magazine in 2005, this version of the UBI depends most heavily upon a “right to a share of the common wealth.”
Within each of these broad political camps, there’s an important distinction to make between UBI proposals for the developed and developing worlds. As we wrote in Vol. 27, some on the Philanthrocapitalist Right are making direct donations to individuals in the developing world as a way to alleviate need and encourage innovation. Writing for Vox, Dylan Matthews travels to one such village on the southwestern edge of Kenya to report on the efforts of a charity called GiveDirectly. Making use of the ubiquity of cell phones in this village, GiveDirectly distributes cash to each of the 26,000 resident of the village, and Matthews gives an account of just how those funds are spent. These researchers are keen to see if a critical mass of residents decides to pool their resources for public goods – roads, water treatment, and the like. While this is not the main objective for these philanthropists, if effective, lean forms of centralized governance (a kind of proto-state) were to emerge, the UBI’s long-term effectiveness would be enhanced.
UBI proponents also exist on what we’re calling the Humanitarian Left. For these thinkers, the case for the UBI is both aspirational and remedial – it is about building a commitment to social justice into a society’s political self-understanding as its economy modernizes and institutions develop. In the case of economies like India’s, this does involve some remedial work; but, contrary to the views of libertarians like Charles Murray, the argument for the UBI is less about the ineffectiveness of government and more about the moral self-understanding of a developing country. It is for this reason that the chapter on the UBI in India’s recent Economic Survey defends the proposal with appeals to the economic and political vision of Mahatma Gandhi.
Given all this variation, it is not surprising that criticisms of the UBI come from multiple angles. Shouldn’t we resist the temptation to merely write checks and walk away, as Nobel Prize-winning economist Amartya Sen put it in a brief response to India’s recent consideration of the UBI? Wouldn’t a guaranteed income disincentivize work? And shouldn’t we address the “root causes” of poverty somehow?
These are questions we’ll take up next week. But, before we do so, we should remember that if the time for (re)considering a Universal Basic Income has come, it is largely due to our current inability to address what we described in last week’s briefing as the dramatic misalignment of three economic indicators: wealth, growth, and employment. This, we argued, is the dominant economic trend of the opening chapter of the 21st century, and whether or not a UBI addresses this misalignment adequately, it is at the very least a proposal worth considering. If, in fact, our expectations for what constitutes “full employment” are shifting dramatically in the flexible economy, it is plausible to think the mechanisms of wealth redistribution will as well.
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