Saturday, January 12, 2019

UBI: Creeping Communism or Libertarian Liberation?

Review of "Give People Money", advocating for Universal Basic Income, by Annie Lowrey. Subititled "How a universal basic income would end poverty, revolutionize work, and remake the world".

This is a good book if one wants to read a litany of complaints about late capitalism- inequality, crummy work, appalling poverty in the midst of plenty, gender inequality and unpaid work, misdirected foreign aid. One might indeed say that never have so many reasons been adduced for a policy with which they are so tenuously connected. To put the argument briefly, if we were to give everyone in the US a monthly income of, say, $1,000, no questions asked, it would by definition end poverty, set an effective minimum wage of roughly $6.25 (full time), and cost about $3.8 trillion, roughly doubling the federal budget.

What are the various problems that the UBI is thought to address? First is of course poverty. While $6.25 is even below the current minimum wage, it is enough for a bare existence. Lowrey cites several experiments in poor third world countries that show that this kind of income is generally put to good use- much better use than aid that comes in the form of second-hand clothes, bed nets, shoes, or any of the other myriad do-good schemes that first world donors cook up. But there is a crucial difference- these experiments are conducted among a functional population generally at par for their society, whose only problem is that they, as are everyone else around them, poor, relative to more developed economies, whose goods and technologies are available for a price.

The poverty-stricken in the US are, by contrast and almost definition, dysfunctional, with health problems, drug problems, intellectual problems, and other issues that money alone is unlikely to fix, and may well make worse. San Francisco has had, for example, a long-term program to switch from money to in-kind and supportive care. If the problem is merely lack of money, then yes, cash assistance is an ideal solution. But UBI is, for this problem, a nuclear bomb, spewing money to everyone regardless of need, and possibly to the detriment of those in the most need of more structured help. There are better policies, as there are for virtually every problem that UBI putatively addresses.

Day laborers wait for work. Would UBI help?

Another problem dwelt on in the book is crummy jobs and inequality in its many dimensions, from a slipping middle class to persistent gender and racial discrimination and lack of wealth accumulation. Needless to say, the pittance represented by UBI is going to address none of these issues. The best that might be said is that it gives something, which is more than nothing, to those out of the workforce who are caring for children, the elderly, on a love-instead-of-money basis. And since the poor are disproportionately female and minority, they would also benefit the most from UBI, at least in subjective / relative terms. But again, it is a pittance, and since everyone gets the UBI, it does a poor job addressing inequality, particularly if its funding comes from a regressive source like a carbon tax, though better if it comes from an income or financial transaction tax. It does not even raise the minimum wage, given its extremely low level.

The more convincing, and libertarian, argument for a UBI is its simplicity and possible role in replacing other poverty programs. Aid like food stamps, housing assistance, and work training are all rather paternalistic and ridden with absurd paperwork, dehumanizing conditions, and arcane regulations. While some of these burdens come from simple bureaucratic evolution, most come from intentional policy built up to discourage people from becoming poor by penalizing and controlling them in various ways, resulting usually from right-wing and Southern racist politics. Replacing much of this with cash is very attractive, even if much of the new income will be wasted or if its amount fails to cover actual needs like housing in expensive areas. However, as mentioned above, many of the poor are dysfunctional, and got to where they are due precisely to their inability to handle money. To make cash assistance work, the responsible sheep would need to be separated from the goats who will end up on the street even with a UBI. This would inevitably bring back the caseworkers, rules, and other periphernalia of the welfare state.

The next level of the libertarian argument is that robots are going to take all our jobs, to which UBI is a solution. It pains me to have to say this, but this makes little sense. First, automation has been with us since the invention of the spear. Lowrey herself quotes Bill Gates: "What the world wants is to take this opportunity to make all the goods and services we have today, and free up labor let us do a better job of reaching out to the elderly, having smaller class sizes, helping kids with special needs. You know, all of those are things where human empathy and understanding are still very, very unique. And we still deal with an immense shortage of people to help out there." Clumsily put, but you get the idea- taking care of each other is the core of what we as people want to do, and should be doing. Making widgets is only one baroque byway on the true path of our life's work. Lowrey closes by mentioning the Star Trek economy- where no one needs money, all fundamantal needs are fulfilled, yet there are still jobs and ambition- a competition for status directly, not via the accumulation of money, but through the medium of work and service.

But this is probably not what libertarians have in mind. Their idea is more that the eggheads and Hank Reardons of Silicon Valley can keep on working their interesting, highly paid jobs, and not worry about stepping over homeless people, or being responsible employers in the new app-disintermediated gig economy, or facing the pitchforks of a vast and growing proletariat, all by feeding them crumbs of UBI. It is hardly an attractive future. On the other hand, one can view UBI as the first phase of future communism, where everyone shares in a basic level of decency, regardless of contribution. The UBI might be programmed to increase with time, in proportion to economic productivity or technological displacement. I can not regard this as an attractive future either, really, given the fundmantal importance of work in our personal and communal lives, and the impossibility of seeing an end to work, or having some principle to tell us what the best level of UBI should really be. Having ever-growing numbers of parasites living off the fat of the robots is reminiscent of ancient Rome, where maybe one fifth of the city population was on the dole, supported by the vast resources of the empire and armies of slaves. While this system was durable, lasting over five centuries, it does not look to me like one worthy of emulation.

Lastly, there are the children. Lowrey does not go into in detail since its ramifications may be so perverse, but supposing that UBI is granted from birth, the accumulation of children would likewise accumulate a sizeable income. Such an excessively pro-child policy would encourage more children among those most poor and most dependent on UBI, a social and plantery disaster.

What is an alternative to all this? A job guarantee has many positive characteristics, which I have mentioned previously.
  • It gives money to those in need, not to everyone.
  • It provides a decent standard of living, not a pittance, perhaps $25,000 per year, plus benefits.
  • It automatically sets a substantial floor for wages, working conditions, and benefits for the private economy.
  • It is automatically and strongly counter-cyclical, increasing when the private economy goes into recession.
  • It naturally replaces much of the current poverty infrastructure.
  • It provides services, insofar as the job holders are doing something productive.
  • One could imagine a central job board, used internally by government projects and prospective employees, but also by private employers to make better offers to those employed in the program.

I would envision the job guarantee system as offering a full range of government-run work, from NASA engineering to street sweeping. Employees could be fired at will, demoted from better jobs to worse jobs, (or promoted), as their talents, behavior, and willingness to move merit. If they crash out of the simplest jobs, like litter pickup and invasive plant clearing, they could be offered a basic income for no work (at the UBI level of $12,000 per year- plus health insurance, which would be universal anyway). The conditions would be that they stay out of jail, off the streets, and out of drug and mental facilities. If they crash out of that, they would be faced with more paternalistic options of case worker intervention, food vouchers, group home living, having their finances handled by a trustee, etc. At this level, work requirements would not exist anymore, or lifetime caps, etc.

One of the most positive aspects of communism was its guarantee of work. The work may not have been efficient, but it gave everyone a place in society, and a paycheck, and benefits. It is one of the few aspects of communism worth emulating, if it can be made to work alongside a higher-paying, innovative, and well-regulated private economy.

Combining a job guarantee, cash benefits, and more controlled programs, a spectrum of appropriate options would be available at all levels of society to lift everyone out of poverty, to intervene where needed, to provide maximal freedom, and to use public money efficiently. Whether job guarantee holders actually accomplish anything is secondary- the major benefits occur regardless. Yet as noted above, there is a great, indeed infinite need, for work. For example, child care up to school age, and elder care (given some certification of disability and need for care) could qualify for one job guarantee position, regardless of the status of other people in the household. This would help families cope with services that are so important to society at large.

  • Bitcoin is absurd and wasteful.
  • Could gerrymandering get even worse?
  • Fixing refrigeration is the top climate change solution.
  • Reich on paying the rich to "fund" the government. (Which is quite unnecessary.)
  • A recession is on the way.
  • Collusion.
  • The real crisis is climate change. And a fascist president.

Not a crisis
Not a crisis