NPR recently reported on a fascinating project in Kenya.
The project was one of a number of pilots around the world in which citizens were given no-strings cash. In this case, an unanticipated result was that infants born to people who received the payments were nearly half as likely to die as infants born to people who got no cash. The payments cut mortality in children under 5 by about 45%, on par with interventions like vaccines and anti-malarials.
As long-time readers of this blog know, I support replacing our fragmented and inadequate social safety net with a Universal Basic Income (UBI). It won’t happen in my lifetime, if ever, but it’s on my list of “when this MAGA nightmare is over…'”
As I’ve previously argued, policies to help less fortunate citizens can be delivered in ways that stoke resentments, or in ways that encourage national cohesion. Consider public attitudes toward means tested welfare programs, and contrast those attitudes with the overwhelming majorities that approve of Social Security and Medicare–universal programs.
What if the United States embraced a new social contract, beginning with the premise that all citizens are valued members of the American polity, and that membership has its privileges?
In my imagined “Brave New World,” government would create an environment within which humans could flourish, an environment within which members would be guaranteed a basic livelihood, a substantive, excellent education, and an equal place at the civic table. In return, members (aka citizens) would pay their “dues:” taxes, a stint of public/civic service, and the consistent discharge of civic duties like voting and jury service.
A UBI would require significant changes to the deep-seated cultural assumptions on which our current economy rests, but if the various pilot projects have demonstrated anything, it is that a UBI and a single-payer health program would ease economic insecurities, reduce the gap between rich and poor, restore workers’ bargaining power and (not so incidentally) rescue market capitalism from its descent into corporatism and plutocracy.
America currently has a patchwork of state and federal programs, with bureaucratic barriers and means tests that are expensive to administer and that operate to exclude most of the working poor. Those who do get welfare are routinely stigmatized by moralizing lawmakers pursuing punitive measures aimed at imagined “takers” and “Welfare Queens.” Current anti-poverty policies have not made an appreciable impact on poverty, but they have grown the bureaucracy and contributed significantly to stereotyping and socio-economic polarization.
As Andy Stern, former President of the Service Employee’s International Union has argued,
“A basic income is simple to administer, treats all people equally, rewards hard work and entrepreneurship, and trusts the poor to make their own decisions about what to do with their money. Because it only offers a floor, people are encouraged to make additional income through their own efforts… Welfare, on the other hand, discourages people from working because, if your income increases, you lose benefits,”
With a UBI, in contrast to welfare, there’s no phase-out, no marriage penalties, no people falsifying information–and no costly bureaucracy.
Support for the concept isn’t limited to liberals. Milton Friedman famously proposed a “negative income tax,” and F.A. Hayek, the libertarian economist, wrote “There is no reason why in a free society government should not assure to all, protection against severe deprivation in the form of an assured minimum income, or a floor below which nobody need descend.” In 2016, Samuel Hammond of the libertarian Niskanen Center, noted the “ideal” features of a UBI: its unconditional structure avoids creating poverty traps; it sets a minimum income floor, raising worker bargaining power without wage or price controls; it decouples benefits from a particular workplace or jurisdiction; since it’s cash, it respects a diversity of needs and values; and it simplifies and streamlines a complex web of bureaucracy, eliminating rent seeking and other sources of inefficiency.
Hammond’s point about worker bargaining power is especially important. In today’s work environment, characterized by dramatically-diminished unions and the growth of the “gig economy,” wages have been effectively stagnant for years, despite significant growth in productivity. With a UBI and single payer health coverage, workers would have the freedom to leave abusive employers, unsafe work conditions, and uncompetitive pay scales. A UBI wouldn’t level the playing field, but it would dramatically reduce the tilt. And if the robots do come—if the predictions of jobs that will be lost to AI and automation are even close to accurate—a UBI could act as a national safety-net, helping the country avoid massive civil turmoil.
There have been several pilot projects to assess the pros and cons of UBIs, and the results have been uniformly positive. Counter-intuitive as it seems, a significant body of research supports the importance of a robust social safety net to market economies. As Will Wilkinson of the libertarian Niskanen Center, has written:
“A sound and generous system of social insurance offers a certain peace of mind that makes the very real risks of increased economic dynamism seem tolerable to the democratic public, opening up the political possibility of stabilizing a big-government welfare state with growth-promoting economic liberalization.”
As Wilkinson has convincingly argued, today’s left fails to appreciate the role of capitalism and markets in producing abundance, and the right refuses to acknowledge the indispensable role safety nets play in placating the human, deeply-seated distaste for feelings of uncertainty and insecurity.
If we were a country that truly valued all citizens, these would be compelling arguments. It’s on my list for “after,” assuming we make it through these depressing times…
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