The Universal Basic Income (UBI) was the topic of my other “Contentious Issues in Classical Liberalism” presentation. Here, at least, I can see the superficial appeal for the typical member of the Mont Pelerin Society. Unlike the conventional welfare state, the UBI doesn’t try to micro-manage human behavior. It doesn’t claim to know how anyone – no matter how poor – should live their lives. It gives bureaucrats near-zero discretion. And it preserves recipients’ marginal incentives to work. The UBI gives money to everyone, then lets the free market work.
What do these arguments overlook? For starters, since taxpayers have to support the UBI whether they like it or not, the moral presumption in favor of recipients’ “choice” is more than a little muddy. Voluntary donors get to decide how their money gets spent; why shouldn’t involuntary donors have the same right?
On reflection, moreover, there are strong reasons for taxpayers to exercise this right. Most obviously, because their first priority is to take care of children. “You can’t use food stamps for alcohol” need not be paternalistic; maybe it’s just a pragmatic way to feed the hungry children of alcoholic parents.
Poor parenting aside, the very fact that an adult needs government help is good reason to question their personal responsibility. If you want to sleep on my couch while you search for a job, I refuse to “just trust your best judgment” about how to get your life in order. Anyone who wants my help has to strive to find a job, not sit around drinking my wine. It’s hard to see why taxpayers should be more relaxed (though due to the tragedy of the fiscal commons, they almost always are).
The main reason why classical liberals smile upon the UBI, I fear, is its elegant simplicity. If we adopt one straightforward poverty program, we can rid ourselves of all the rest. Unfortunately, as my presentation explains, the UBI’s cost is exorbitant, the side effects are awful, and the moral justification is ultimately flimsy. The right moderate reform for classical liberals to push is not the UBI, but Austerity for Liberty.
READER COMMENTS
RaoulW
Jun 4 2019 at 1:55pm
Guaranteed basic income is the victory of economic and social literacy over entitlement and fear.
https://www.imf.org/external/pubs/ft/fandd/2016/03/kumhof.htm
https://harpers.org/archive/2018/06/punching-the-clock/
RaoulW
Jun 4 2019 at 7:02pm
“taxpayers have to support the UBI whether they like it or not, the moral presumption in favor of recipients’ “choice” is more than a little muddy”
It is not taxpayers that support the UBI, it is people who try to do good work. Which isn’t necessarily strongly correlated with income when the democratic element to money issuing is small. The privilege of being able to take out credit against property, and with that to enjoy inflating rental and asset values, is not to supposed to be the only way for people to agree on what is to be done.
By reducing personal responsibility to money affairs, we invite an Orwellian scenario that nobody would like to see realized, for the short term benefit of the landed gentry and other lucky folks. As much as a systematically dysfunctional money market benefits nobody. See Kumhof “The Truth about Banks” in the other post or Steve Keen’s work in general.
““You can’t use food stamps for alcohol” need not be paternalistic; maybe it’s just a pragmatic way to feed the hungry children of alcoholic parents.”
Why would you deny the most vulnerable of society access to a sence of belonging to the culture of society? If you don’t like that money can buy alcohol, don’t allow selling of alcohol. Last time I heard there’s irresponsible people on all ends of the income spectrum. Income insecurity will only make the desire of people to practice escapism and resistance to a flawed and consequently immoral framework worse.
The solution is love not fear. Deliberation and listening to people, not heavy handed assaults on a major productive force of society, the people.
Mark Z
Jun 7 2019 at 2:37am
How will the UBI be funded if not by taxpayers? And should some of those taxpayers decide they’d rather not buy drinks for strangers, what kind of love will they be met with? The love of an iron cage?
RaoulW
Jun 4 2019 at 7:04pm
““You can’t use food stamps for alcohol” need not be paternalistic; maybe it’s just a pragmatic way to feed the hungry children of alcoholic parents.”
Or even better, try to change the culture (A Growth Mindset is something to considred, as much as income security to build your own life up from there may be useful to have) and challenge the profiteurs of growing addiction.
Fazal Majid
Jun 4 2019 at 8:17pm
You discount the value of cutting bureaucrats out of the loop, end eliminating their jobs altogether. That’s why countries like India are moving to direct cash benefits secured by the Aadhar biometric ID system, much harder for middlemen civil self-servants to embezzle.
It’s also amusing how proposed austerity cuts always fall most heavily on the poor, not on government-funded institutions like George Mason University. I don’t know if UBI is feasible, but I am willing to entertain the possibility in a future (yet to be proven) where robots do all the work, and where UBI is the price to pay for civil peace.
Mark Z
Jun 5 2019 at 5:22am
How does austerity fall mostly on the poor? Also, why exactly would a UBI be necessary for civil peace?
Fazal Majid
Jun 5 2019 at 11:49pm
Well, in the US it is programs like food stamps that are recommended for axing, not military spending, or funding for George Mason University’s Economics Department.
As for civil peace, imagine that robots eventually take all jobs and are owned by a tiny fraction of the population, the rest being left to wallow in unemployment. What will happen is an insurrection like the Luddites, and most likely it will be repressed as savagely by the elite, except this time using autonomous drone weapons that have zero qualms at shooting humans.
Mark Z
Jun 7 2019 at 2:13am
We could cut entitlements to the rich and middle class by reforming social security and medicare, but it is the self-anointed champions of the poor who would most arduously object. Moreover, why didn’t the automation of agriculture lead to chronic 95% unemployment rates? Automation doesn’t increase the equilibrium unemployment rate.
Michael Sandifer
Jun 5 2019 at 9:31am
Bryan,
You normally put forward very clever, well thought-out arguments for very counter-intuitive ideas, such as those for the value of education being primarily that of signaling. This is not an example, however.
Fundamentally, what’s different about having open non-toll road ways available to all, whether they pay taxes to help fund them? Should every road be a toll road? And if so, why? Because you prefer not to be forced to pay for road construction and maintenance for some free riders?
Fortunately, the evidence suggests there’s no reason to believe most in the world will ever agree with your sense of morality. Entitlements have long existed and should be expanded over time as the growing income and wealth of a society allows. Working hours should decrease over time as productivity improves.
Why? Because it’s my preference, just as it’s your preference for it not to be so. There’s no inherently correct preference here. Fortunately, I think my preference will win out, as many people will prefer to benefit from increased entitlements.
I also take issue with your specific point about food stamps. EBT cards are loaned out to people in exchange for cash all the time. Sometimes, it’s to buy drugs and/or alcohol. Milton Friedman understood this 50 years ago when he was pushing for a negative income tax. He was correct then, and he’s correct now.
Finally, the idea that a small UBI would be more distortive or expensive than current entitlement programs is ludicrous. Particularly, if you replace Medicare, Medicaid, and all other welfare programs with a UBI, deregulating healthcare in the process, one could add a wage subsidy and still save money in the long run. Make these benefits only available to citizens, and make citizenship difficult to earn, while having open borders to all who want to be non-citizen residents.
Granted, eliminating Medicare and Medicaid are long shots, to be kind, but less so than the idea of eliminating entitlements altogether.
And while you’re skeptical about the future of automation eventually eliminating jobs, most are not. I think human labor will become mostly obsolete, though not in my lifetime. So, I see no practical alternative in the long run anyway.
Instead of hating entitlements, you should learn to love them, since they’re not only never going away, but will grow, even if slowly, over time.
Mark Z
Jun 7 2019 at 2:34am
Friedman opposed Nixon’s attempt to implement a negative income tax in large part for reasons Bryan has presented.
The idea that a UBI would replace the existing entitlements is pure fantasy. Unless voters are willing to let people who squander their UBI instead of buying health insurance, paying their rent, etc. die in the streets, then traditional entitlements will continue to exist to take care of people who do so; and over time, more and more people will notice this spend their UBI on non-necessities and simply let the state keep taking care of the necessities, which is entirely rational on their part, and we’ll instead end up with Medicare, Medicaid, Social Security, etc. on the one hand, and the UBI on the other.
To the extent that poverty is a behavioral issue (it certainly is in large part, and I – and I suspect Bryan as well – would argue it is mostly behavioral), entitlements are inherently paternalistic. The people who need them almost by definition cannot make their own choices, and therefore their choices must be made for them in conjunction with the entitlement. This isn’t just for pragmatic reasons, but moral ones as well. After all, what’s wrong with compelling someone to make certain choices to get their check? It abridges their freedom? But the choices they made that led them to need a check from the taxpayers were, we are told, not free at all, but the product of the oppressive forces of the capitalist heteropatriarchy, or what have you, so there is no real freedom to abridge to begin with.
To argue for non-paternalistic, no-strings-attached entitlements is to argue that people can be responsible moral agents when they’re picking up their check, and helpless children without moral agency when they’re making the decisions that lead them to need the check.
John Alcorn
Jun 7 2019 at 11:11am
Mark Z,
Please see my question below, which I should have placed here!
Thank you.
Michael Sandifer
Jun 9 2019 at 3:07am
Mark Z,
I think you need to re-read Friedman on his position on the approach to the negative income tax that Nixon favored.
And it’s extremely naive to think poverty is entirely or even mostly just the result of bad choices. We know far more about epigenetics today than your comments seem to suggest. Addicts, for example, are born, not made. Addiction is not the result of bad choices, but of genes. The evidence is very clear on this.
And, of course, intelligence has a significant genetic basis. Lack of intelligence today is increasingly an economic disadvantage.
Then, there are people with various disabilities, including many veterans.
But even if all that weren’t true, so what? I favor increasing universal entitlements as societies grow wealthier. I don’t care about what you or anyone else considers moral or reasonable. This is purely subjective preference.
Mark Z
Jun 9 2019 at 11:20pm
So, your objection then is that I don’t share your subjective preference?
And epigenetic patterns are usually only passed on from gametes, whose epigenetic patterns are themselves are not as variable as somatic cells with respect to environment. Attempts to resurrect a sort of social Lamarckianism using epigenetic aren’t really consistent with what is actually know about epigenetics.
Finally, undermining the basis of human free will (such as through genetic determinism) hurts your case rather than helping it. If an alcoholic is a genetic alcoholic, that only reaffirms that we should restrict him from drinking rather than just giving him the check and letting him do as he pleases. If a person is physiologically incapable of making consistently good choices, then this suggests if anything they should be the object of paternalism.
Michael Sandifer
Jun 11 2019 at 12:22am
Mark Z,
The same percentage of monkeys as humans display alcoholic behavior, when given unlimited access to alcohol. That is true of other mammalian species too. There’s no social Lamarckianism.
And it certainly doesn’t follow to me that just because some people are born addicts that they shouldn’t have the right to behave as addicts, or that they should have any less freedom with entitlement resources than anyone else.
Yes, this does come down to preference.
John Alcorn
Jun 7 2019 at 11:09am
That’s a sharp counter-argument! How would you reply to a different argument that is frequently made against attaching strings to poverty relief? ‘In modern societies it’s hard for government bureaucracies to know whether individual poverty is due to bad luck, rather than irresponsibility. The principle of charity in interpretation favors a presumption that bad luck is the cause.’
Mark Z
Jun 9 2019 at 11:26pm
One reason I think we might err on the side of paternalism is that the cost of preventing merely unlucky poor people from doing drugs or other potentially impoverishing behavior at the public’s expense is fairly small compared with the cost of diverting taxpayer money toward funding harmful behavior by irresponsible people.
Also, I don’t think it’d be impossible to stratify those in need. Restrictions on what one can do with a voucher could, for example, vary depending on how long or how often one has been on the dole, where I expect unlucky people would tend not to find themselves in a desperate state very often.
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