Politics, recent

Why UBI Ought to Appeal to Conservatives

Republicans are traditionally hostile to what they call government “hand-outs.” This is not because they believe people shouldn’t get what they need. Rather, conservatives believe that people should get what they need in the most efficient way possible. Which, to the Republican mind, is almost certainly never going to be a program run by the federal government.

The basis for this argument is that big government has two major problems. The first is a knowledge problem. It doesn’t know exactly what is going on out there in the wider world, nor what the best solutions might be. The second is an execution problem. Whatever the government does set as a goal, it’s rarely in a position to enact this plan efficiently. The solution to the knowledge problem is decentralization: give more decision-making power to those closer to the ground where a policy is going to be implemented. The solution to the execution problem is the free market. Let businesses figure out what the best course of action is, because they’re actually incentivized to do so. This is, at least, the basic idea.

There is a beautiful exposition of this idea in a famous paper by the conservative economist, Friedrich Hayek. Writing in 1945, Hayek argued that “scientific knowledge” covers less than we tend to assume—which is to say, everything. What he means by scientific knowledge is essentially knowledge of how things work generally. There are laws which describe how atoms generally work. There are also laws—albeit slightly more fungible ones—which describe how humans form beliefs or fit into a larger cultural context. This is no doubt extremely useful information. But what we miss when we obsess over this kind of knowledge is knowledge of the specific.

By specific, Hayek had in mind knowledge that’s bound to a particular time and place. This, for instance, is why you still have to do on-the-job training after you go to college. A university is in a position to teach you about how the world works generally, not how a particular circumstance is going to play out. This is also what you encounter if you spend time with someone who is familiar with a particular expanse of wilderness or their back garden. There are general principles at play here—of plant species, of soil conversation—but the thing they understand that no one else does is what makes their terrain different to everyone else’s: it is a unique thing located in a particular place. The government, like the university, is not in a position to gain this kind of local knowledge. That’s why government programs don’t work—or at least tend to be much less efficient than they are meant to be.

This is why conservatives are reflexively hostile to Universal Basic Income. On the face of it, it’s simply a government program. And, even worse, it seems to be a program implemented with even greater ignorance than the usual fare. But there are several good reasons to question this initial suspicion.

Let’s consider Democratic candidate Andrew Yang’s proposal. The bare bones of it are that everyone over the age of 18 gets $1000 per month, no strings attached. For the sake of argument, let’s set aside the problem of paying for it. Let’s also set aside the question of whether people would in fact spend that money wisely. These are important practical matters, but they’re separate from the question of whether a UBI policy aligns with important conservative ideals.

The first point of agreement between Republicans and proponents of UBI is about what the government is good at: relatively little. This is one of Yang’s favorite points. A government program with a bunch of bureaucrats operating file-the-proper-paperwork mechanisms is bound to have some inefficiencies. But, as Yang points out, what the government does well is promptly and reliably sending out a load of checks in the mail. Republicans balk at the idea of UBI because it seems like an extreme version of your standard government handout. But it isn’t. It actually eliminates most of the government subsidies against which Republicans have traditionally marshaled principled arguments.

The second point worth considering is what it means to put that money in the hands of individual Americans instead of the federal government. It is the ultimate vote for the free market. It’s no longer the government dictating what the best use of that money would be. That money is going straight to the people who have the most intimate, on-the-ground knowledge of the particulars of their life circumstances: themselves. I can’t personally imagine anyone more capable of doing the job—especially not a government bureaucrat. It is, in fact, the opposite of the government telling people what to do and how to do it.

The third point of agreement is a little bit trickier but no less important. That’s the argument that this will better enable people to acquire and keep jobs rather than encourage them from living the ($12,000 per year) life of government-subsidized leisure, as is often imagined. The reason to believe this has to do with complex factors that contribute to someone’s inability to hold a job. The assignment of construction union jobs, for example, is based on seniority, so when you’re starting off you don’t know how many hours you’re going to get—this week, or this season. You need to earn the right to stability, and there are many things that can get in the way of putting in the ground work to rise up in the ranks. Without a safety net, people who might otherwise be able to succeed in this job fail because they are trying to paper over short-term problems. UBI gives people like these the flexibility to do what they need to do in order to maintain their employment.

As Americans, we have reached a point in our political discourse where a loss for the other side constitutes a win for our own. To combat this trend it is more important than ever to reconnect with our goals and principles, the ones at the core of what we believe will be best for society. Whether or not you accept them, Republicans have well defined principles. Opposing every proposal made by a Democrat has not traditionally been one of them, and it is more important than ever to take the possibility of shared ideological real estate seriously. And while the arguments I’ve made here probably won’t flip an ardent conservative into a member of the Yang Gang, they should give us pause to engage with an idea about which we might at first be skeptical.

 

Cody Kommers is a psychology PhD student at Oxford. He has previously written for AreoPsychology Today, and Scientific American. You can read more from him on his website and you can follow him on Twitter @codykommers

Featured Image by Collision Conf

Comments

  1. It actually eliminates most of the government subsidies against which Republicans have traditionally marshaled principled arguments.

    OK. Specifically which ones will be ended, the federal workers sacked, and the offices shuttered? Name them.

    Will Section 8 housing assistance be ended? How about SNAP (food stamps)? WIC? National School Lunch Program? Medicaid? Energy Assistance? Lifeline land and mobile phone assistance? And what’s going on with those citizens who are under 18? They are presently welfare beneficiaries - whether their parent(s) qualify and how much they receive is largely determined by the number of children and their ages. Why does Yang omit them as beneficiaries of his half-cocked scheme? Because the benefits programmes will be re-purposed as ones for children.

    Further, exiting the benefits programmes to collect Yang dollars instead will be voluntary. This means funding still must be appropriated by Congress, employees kept on the employment rolls, and buildings kept open and operational to handle the decliners.

    This is Yang’s grand deceit and how the benefits programmes will live on.

    “But who wouldn’t want to collect $1000 instead of benefits?” some may ask. People receiving more than $1000 per month. That’s who.

    The below chart is from a study of single parent of two children living in Colorado. We see that until an income of about $27,000, the person is receiving benefits exceeding $12,000. I presume the person would opt out of Yang bucks to retain all his/her other benefits, unless these programmes become ones for children, which I expect they will be, that will allow the person to collect his/her $1000 per month whilst the children retain benefits.



    “First family” is one residing in Wisconsin, a single parent working part-time and attending technical college full-time, raising two children aged 3 and 7, and earning $10,000 a year.

    “Second family” is also a resident of Wisconsin, a married couple with two children aged 3 and 7, with one parent working part-time and attending technical college full-time, and a total income of $50,000.

    Moreover, other government agencies will have to be expanded. Enforcement of revenue collection from the new VAT or other tax will require more IRS agents. Items ordered from overseas shops will require declaration to and inspection by Customs agents. Because up to $800 of items may be imported tax-free each time by a consumer, very few Customs agents are employed to handle these types of parcels presently. To address consumers attempting to avoid VAT, many more Customs agents must be employed as well as inspection facilities expanded.

    For the sake of argument, let’s set aside the problem of paying for it.

    The mystery of the three-point-two trillion-dollar question will be put aside? Oh, how convenient.

    And while the arguments I’ve made here probably won’t flip an ardent conservative into a member of the Yang Gang, they should give us pause to engage with an idea about which we might at first be skeptical.

    Add to Yang’s deceit the author’s. Only an ardent conservative wouldn’t be flippable. It couldn’t be that people have sniffed out Yang’s BS already, could it?

    Now, if you want to eliminate government programmes genuinely and put that money in former recipients’ pockets to spend as they wish, a better choice, and the conservative one, is Friedman’s negative income tax. Of course, you’ll have to be at peace with some parents misusing their money and disregarding their parental responsibilities.

  2. I am curious as to why so many opinion writers on Quillette think we should fall in love with Yang’s proposal. Here is why I am not enamoured:

    1. Simple ideas are not necessarily profound. “Kill all white males” is a simple idea. It is not profound.
    2. Yang’s proposal is inhumane. He basically writes people off as an expense. It suffocates personal agency.
    3. It applies equal measure to unequal parts. Since the cheque goes to everyone over 18, it will often go to people who don’t need it. That’s a waste.
    4. It’s not set against a stable measure. The value of the dollar fluctuates. Is it a system that would work in a recession?
    5. It doesn’t negate the many costs a government would bear: medical facilities and services, for one, but also refuse collection, sanitation, schools etc.
    6. Some people would inevitably complain it is not enough, or argue the amount should increase. Some people have more kids than others, or more problems, or more sense of entitlement. People who rely solely on the welfare cheque have plenty of free time to riot if the mood strikes them.
    7. The plan could kill competition and progress. There is no sense in producing a product if most of a market can’t afford it. Much would be cheap, disposable crap.
      I could go on and on…
  3. The author could have put a better case had he actually gone to the trouble to look at the free-market economists who actually supported the idea (in the American context, what conservatism seeks to conserve includes a fair chunk of classical liberalism, including free markets and the rights enumerated in the Bill of Rights). Hayek argued that an unconditional universal basic income was the only state-sponsored poverty alleviation program that did not produce perverse incentives. Milton Friedman advocated the idea to Nixon, but we got the Earned Income Tax Credit as a poor substitute. And, most recently, the (much vilified on the Left) neo-conservative writer Charles Murray wrote a book laying out the benefits of replacing our current hydra of means-tested poverty alleviation schemes with a UBI similiar to Yang’s.

  4. For the sake of argument, let’s set aside the problem of paying for [Andrew Yang’s UBI].

    That’s the single most astounding proposition I’ve read in a Quillette article. My mind is literally boggled.

  5. Glenn Beck jumped on the UBI bandwagon some time ago, after he decided conversation and compromise with the Democrats is important, so of all Democratic ideas, UBI may be one of the more palatable ones to conservatives.

    However, my problems with it, and the arguments presented in this article, is that I don’t believe it will actually replace any government programs, just expand the number of people dependent on the government. As far as a means of letting people decide how best to spend their money, that isn’t an accurate description of UBI. That would be a tax cut. UBI is giving people other people’s money to spend.

    Finally, I don’t think it would really make any difference for people in the end. At first, it will increase people’s buying power, sure, but much like tuition, the knowledge that people can afford to pay more will mean prices will rise. I don’t see why giving everyone $1000 a month won’t just lead to inflation. Inevitably, $1000 will soon be decided to simply be insufficient, and like the minimum wage UBI will be perpetually revised upwards.

  6. While working for Social Services (aka the welfare department) we would have classes for the mostly single mother clientele showing the benefits of going to work. With a minimum wage job and deductions, plus government paid childcare, a client could at least double her net income. The client could have a newer car in the garage, a nicer house, savings in the bank, etc. so how successful were our efforts? In a good month, maybe 20% would accept a job, even if they quit after a few days. So 80% would prefer to live on the minuscule welfare payments rather than entering the work force. So now extend this to the general population, where you get a “freedom dividend.” How many people would say “I’m happy watching TV or playing video games all day, so why work? Meanwhile the taxpayers who are working keep getting a bigger tab for the privilege is watching others waste their lives.

  7. Most of the good arguments have already been made here. The notion that the welfare state would decline or be simplified by the addition of UBI is a classic case of “fool me once, shame on you, fool me for the ten-thousandth time, shame on me.”

    No other welfare will be cut, but also, the UBI will grow over time. Faster than you think. It’s basically the 16th Amendment all over again; floodgates will open.

    The not-yet-mentioned negative consequence is social pathology. None of the pathetic excuses for “studies” on UBI to-date have lasted nearly long enough to see the generational impact on entitlement mentality, but we’ve enough experience with human nature and other social welfare to know it will be bad.

    At the end of the day, all of the standard arguments against free lunches apply.

  8. The delusion of every Marxist is imagining that “capital” only means currency.

    Time is money. Time is our most finite resource. You can never earn more, and with every minute that passes, you have less. Many people who earn a fair bit of money don’t have the time to enjoy it. But give a person half as much money in exchange for ALL of his time? What a deal!

    There’s not a left-wing statistic in the world that doesn’t say that the person earning $40k/year from a full-time job isn’t better off than the person collecting $30k/year in benefits. But the latter is unquestionably enjoying life more, unless the former truly “loves his job”.

    Redistribution systems are redistributing from those who have less to those who have more.

  9. I’ve yet to find a compelling financial reason for a basic income to be universal. Why does the fella earning 50%, 100%, or even more than the median income (or some other baseline, for example the relative poverty line) also need an extra $12,000 per annum? I think the reason for universality is to transform the mindset of the people by making each person a welfare recipient - I think of it as Trojan Horse. Once the “we’re all benefits recipients” idea has taken hold, later the same old arguments about unfairness will be advanced to provide more for the poor. “It’s unfair that you earning $100k per annum receive $12k whilst I, a single mum of 4 earning $20k, also receives the same $12k,” “The cost of living in the San Francisco Bay area is far greater than Dubuque, Iowa. Unfair residents of both are paid the same UBI,” “Children are citizens too. Why no UBI for them (paid to their parents/guardians)?” and “Non-citizens are being forced to pay VAT and other taxes funding UBI but are not recipients.” Further, I’ve already found objections from the left that as a basic income, $12k per annum is not only not a living income, it’s not even a poverty income. They want three times more. The dissatisfaction and whingeing are endless. I’m sure UBI will become racialised, genderised, and whatever else-ised as well.

    Does a basic income, whether universal or means tested, have some merit? Let’s look at the Gini coefficients for no UBI, UBI, and means tested income. I’ll also establish two conditions for means tested income. Note: this a crude representation of our nation of two people and no other benefits have been considered.

    A’s income = $100k
    B’s income = $20k

    A’s income + $12k UBI = $112k
    B’s income + $12k UBI = $32k

    A’s income = $100k
    B’s income + $12k subsidy = $32k

    A’s income = $100k
    B’s income + $18k subsidy = $40k

    For fun, let’s also look at Gini when the recipient decides to cease working and merely subsist on his/her subsidy.
    A’s income = $100k
    B’s income is $0 + $12k subsidy = $12k

    As expected, inequality decreased most when means testing was applied. The question is: What is the intent of benefits programmes? Aren’t they to aid those in need?

    Personally, I’m not one who gets in a tizzy about income and wealth inequality in a wealthy and developed nation. However, given that many (loud) voices claim this is a concern (or this concern is over amplified by the media), it appears to me the negative income tax is the sounder method to address the concern, assuming it is one shared by the majority.

    Moving on. There are a few risks from UBI that aren’t addressed. First and foremost, UBI is not adding value to the economy. You’re not earning more money by increasing your productivity, taking on new valued-added tasks, working more hours or more efficiently, developing a new product or service, taking on risk to invest, etc. You get the money simply for existing. I’m sure you’re all wonderful people, but truth be told the dollar value I attach to you for simply being is precisely $0. No offense is intended. That same $0 is the value I assign to my being as well. Secondly, UBI will be paid to all regardless of the level of aggregate employment and economic growth or contraction. Will it be possible to reduce UBI payments to counter inflation? I think it’s very unlikely. Each adult has been promised $1000 per month (adjusted for inflation, I understand), and they expect it. This is unlike a dividend, which is a variable sum, determined when a company finalises its income statement.

    Yang mentions Alaska’s dividend as an inspiration, but its income is derived from the royalty fees and taxes paid to the state for the extraction of oil and the use of public land to accomplish this. When oil prices and the state’s revenue are high so too is the annual dividend; it declines when oil income declines. By collecting resource extraction fees, Alaska is not unusual - many states do so.

    Here are two tables and graphs documenting two states’ oil and gas revenues and where they go. If you read the linked document it provides a thorough explanation. Alaska’s state trust fund is what pays the residents’ dividend.


    Alaska is unusual in that the resource-derived income is great, the population small, and the voters elected politicians who decided to hand directly some of the earnings to the residents rather than spend it all on projects and retain as rainy-day savings.

    Both Alaskans and Californians earn from their ownership of resources, it’s just Alaska’s residents choose to collect a cash dividend too by forgoing other things. Once oil extraction ceases (for whatever reason), what do you think will happen to those dividends? Yes, the trust fund will last for a while, but naming it the permanent fund does not make it so. It’ll deplete unless replenished. This is why I think Yang calling his UBI scheme a dividend is a deception.

  10. The inequality that matters is an inequality of contribution to what the Left imagines is society’s pot of zero-sum wealth, not inequality of withdrawal. We already have lots of injustice in the fact that those who contribute much withdraw far less, while those who contribute little (or negative) withdraw far more than they’ve earned.

    The Left’s giant lie is in getting people to perceive that one’s production (perniciously named “income”) is one’s consumption. This is not remotely the case. The highly productive do not consume most of what they produce, but rather invest it. That wealth is efficiently allocated by virtue of being controlled by those who have proven competent in the earning of it. The alternative is cronyism, aka socialism, whereby control of wealth is determined by means other than merit.

    The notion that we “fix inequality” by reducing the incentive to work among those already doing little work is very wrong. These people are already not nearly equal; why should we make them even more so by teaching them to contribute nothing at all? They will become even more different from the productive class, with more resentment and social strife resulting.

  11. I agree with Stephanie. would simply be a greater amount of currency chasing the same amount of goods.

    We don’t have the money from taxes, so it will need to be borrowed/printed. This would be everyone in the country just charging an extra $1K per month on their credit cards. No wealth is created. Production is not increased. Result is just that USD will be worth less and less each month.

    It is one thing to redistribute actual wealth, aka Warren/Sanders.

    It is entirely another thing to simply print, aka Venezuela/Zimbabwe.

  12. Here in Oz, the government once introduced a first home buyers’ grant of $10,000. The idea was to help young people get onto the property ladder, especially in the fiendishly expensive Sydney market (think San Francisco and then add a bit more). Very soon afterwards it became apparent that the price of the sort of houses and flats that could be purchased by first homebuyers had all risen by about $10,000, as the market realised that many prospective purchasers would be able to get a government subsidy of that amount.
    I think the same would happen with the UBI

  13. It’s not even a con, it is a bloody pipe dream, it’s socialism on steroids.

    Unless Andrew Yang can match the performance of Moses & arrange for manna to fall from the heavens.

  14. “Very soon afterwards it became apparent that the price of the sort of houses and flats that could be purchased by first homebuyers had all risen by about $10,000, as the market realised that many prospective purchasers would be able to get a government subsidy of that amount.”

    People are willfully blind when it comes to basic economics. In the US, mortgage interest remains deductible as a sacred cow to “help” people afford higher mortgages. This rebates just gets baked into prices since people tend to buy as nice as they can borrow. Want to lower housing prices? Stop subsidizing mortgage payments.

    Want to slash the cost of college? Stop guaranteed student loans. I know, I know, will never happen.

  15. It doesn’t matter one iota to me whether Republicans (or Democrats) are “supposed to” back the UBI proposal. In America, “Independents” comprise some 40% of our population, and even in the case of people who are solidly one party or another, most but the most extreme will disagree with this or that aspect of their party line.

    I’m saying this because I find the entire premise of the article a giant straw man. Why UBI “ought” to appeal to conservatives–who cares? Let’s talk about the proposal itself.

    I think only someone who is utterly out of touch with the nature of humankind would think UBI is a good idea. And I should say I like Yang, as a person; I respect him as an aspiring politician. I just think this proposal is extraordinarily naive at the very best.

    If you work in an inner city as I do, you can’t avoid seeing how incredibly damaging it is to throw money at people with no strings attached, or to incentivize dependency. I cannot tell you how much corruption goes on, from parents faking their kids’ disabilities to get more SSRI money, to adults faking a disability for same, to adults deliberately working up to a point that their welfare payments stop, and not going over that amount. It’s human nature. If you reward negative behavior - in this case, the idea you can get something for doing nothing at all - you get more negative behavior. Ditto if you don’t penalize the negative behavior. It’s a basic principle in pretty much any human - and animal - behavior. Don’t reward the behavior you don’t want.

    If I don’t want my dog scratching my legs, I shouldn’t shower her with attention every time she does. If I want my adult kid out of the house, I shouldn’t provide them with free food, clothing, and shelter. If I want someone to work, I shouldn’t give them money to not work.

    And yet I see over and over bad parents and well-intentioned people proposing ideas that have a touching faith in the ideal human, who - in their fantasy - always wants to work hard and do their share. (These are no doubt the same people who think group projects with a single grade are a great idea in high school…) The idea is that if you just level the playing field, everyone will perform at their best; the only thing standing in their way is money and enlightenment. The idea is if I just explain to my dog that scratching me is really really bad, she won’t do it. If I explain to my kid I need to have him out of the house, he’ll go.

    UBI just isn’t supported by fact, experience, human nature, history, and any other metric. A substantial portion of the population will be totally happy to live on $12,000. You have a couple, and that allowance of $24000 becomes livable. (Only someone in the upper classes would think $24K is pocket change. It is a great deal of money for many people. Especially free money.)

    You think you won’t get a huge portion cashing the $12000 check and dealing drugs on the side? (What does this do to the price of street drugs by the way?) Or else working 10 hours a week to top if off—and then spending the remainder playing on smart phones, eating, sleeping, and getting into fights from boredom, social media rumor mongering, and a lack of purpose? Everything will be based on how to best maximize that free $12K. Meanwhile, a large subset of people will lose dignity and a sense of meaning, particularly men who take great pride supporting and protecting their families. Instead the government would treat them like 10 year olds getting an allowance, but not even like that, for a kid with an allowance can have it revoked for being a brat. Whereas here, no matter how awful you are, you get that money.

    When people justify UBI, they assert, without any sense of irony, that getting $1000/month will suddenly spur people to invest in poetry and the arts as they’ve always wanted to do but have had no time to. This reads like a warped liberal-intellectual fantasy that everyone would secretly like to be just like them. Um no.

    This is all leaving aside the damage it would do to the overall economy with a flush of tax money redistributed to people no matter how lazy or incompetent or corrupt they are, the inflation of some items, and the deflation of others.

    It’s a really bad idea all around. I think it stems from the idea that in the not too distant future, we may well be under employed due to a flush of robots, machines, and lack of skills. UBI is a an ostensible solution–pay people, let them work 20 hours in the crappy lower level jobs available, and they will use the extra cash to spend more on phones and tablets and computers, and overall being tapped in. This will fatten Silicon Valley and also make people more amenable to manipulation as they will lose their purpose and be utterly dependent on the hand that feeds them, aka the government, and be afraid or reluctant to make any waves against the status quo. I think that’s the idea, the longer game.

Continue the discussion in Quillette Circle

259 more replies

Participants

Comments have moved to our forum

275 Comments

  1. Pingback: Why UBI Ought to Appeal to Conservatives | 3 Quarks Daily

Comments are closed.