UBI: Ed Dolan Responds
By Bryan Caplan
Ed Dolan responds to me on the UBI in the comments. Complete text:
First of all, thank you, Bryan, for the civil, cogent,
and detailed response. I think we might even find common ground–I might
eventually be able to get you to concede that libertarian sympathizers
should “take a UBI seriously” (that is not the same as drinking the UBI
Kool-aid, after all) and in return I will concede that a UBI is not a
magic bullet, but nonetheless is worth serious consideration.
A couple of specifics:
1. You say that I acknowledge elsewhere that the incentives are
theoretically ambiguous,income effect vs.substitution effect and all
that. Fine, but you give the wrong link. The place where I discuss that
issue in detail is in the two-part series that starts here.
Part 1 of that post deals with theory, and shows that although there is
some ambiguity, it requires very special and implausible assumptions
for the income effect to outweigh the substition effect. Part 2 looks at
the empirical literature, and concludes that the overwhelming weight of
evidence suggests that a UBI improves work incentives relative to any
means tested program.
2. You are very right to zero in on the “done properly” proviso as
critical. I completely agree that tacking a UBI onto the existing system
would not work. I also strenuously object to the line you get
from some conservatives that a UBI should replace welfare for the poor,
but leave all tax and transfer goodies intact for the rent-seeking
middle and upper classes. What is sauce for the goose is sauce for the
gander. Does that make a UBI a hard sell politically? Maybe. I’m a lowly
economist. As the song says, “If the rocket goes up/who cares where it
comes down?/That’s not my department/says Werner von Braun.”
3. Taxpayers have right to attach conditions to public charity. I
don’t dispute that. Whether pragmatic considerations might lead them to
avoid excessive or silly conditions is another matter.
4. “You shouldn’t get aid unless you are poor through absolutely no
fault of your own.” Yes, that argument has some moral force. However,
pragmatically, it is hard to pull off since it requires a huge welfare
bureaucracy to decide who qualifies, and the very effort to decide has a
Heisenberger-like way of changing the nature of the phenomenon you are
trying to evaluate. Exhibit A is our disability system, which tries to
follow the principle you suggest, but ends up with massive unintended
consequences (UBI vs. disability is subject of a forthcoming post.)
Thanks again, anyway. I’d love to have a live debate on this.