There has been a flurry of UBI discussion recently with articles on UBI in both the Wall Street Journal and the Economist. Interest in UBI has peaked because of the June 5th plebiscite in Switzerland to consider a UBI.
UBI is Universal Basic Income, payments from the government to every citizen (with some caveats) as a supplement to or a replacement of income from labor. The justification for this initiative as expressed by proponents of UBI is the coming employment debacle that will result from robots taking the jobs of decent hard-working blue-collar folks. The Wall Street Journal article (A Guaranteed Income for Every American, Charles Murray, June 3, 2016) stated that when cars and trucks replaced horse-drawn vehicles the jobs for teamsters were replaced by those for drivers of motor vehicles so employment was maintained even though the nature of the jobs had changed.. Wait a minute, I thought, although the humans got redeployed the horses were literally put out to pasture. This time it might be people (and not just the blue-collar workers) that will be put out to pasture. Mr. Murray asserted that a UBI would be necessary in a world where most of the GDP is produced by machines. He proceeded to explain the mechanics of how to implement a UBI in the US by having it replace the current welfare state with these direct payments.
Whereas the Murray article foresaw UBI replacing the welfare system and thereby reducing the role of government in the economy, the Economist article (Basically Flawed, print edition, June 4, 2016) saw UBI as layering onto the existing welfare system, greatly increasing the government’s role in the economy. The Economist also worried that UBI would create unbearable tension between those people who continued to work and those that chose to live off the dole funded by the taxes of those that continued to work (and the robots).
The practicality of implementing a UBI is, as explained by Mr. Murray, pretty straightforward. My concerns lie elsewhere. A Universal Basic Income, like many other well-intentioned government programs, is fraught with many unintended consequences, some positive and some very negative. These are in addition to the intended consequences, which usually turn out to be very different than the proponent’s expectations (see; Big Dig where costs were estimated to be $2.8 billion but were actually $14.8 billion).
A positive unintended result of a UBI under Mr. Murray’s proposal would be the elimination of the marriage penalty and work penalties of the current welfare system. Currently poor single women reap additional benefits from additional children while the income of a husband would cause a decrease in benefits. With a UBI, these incentives would be reversed which could result in the reduction in the number of fatherless boys that currently are the bane of poor and minority communities across this nation.
More importantly however, a UBI represents a profound change in the nature of the American Social Contract. The essence of American Social Contract is rooted in the personal liberty of each citizen. But freedom requires self-sufficiency. Dependents do not have full freedom of action but only that range of action permitted by their benefactors (Mr. Murray’s plan, for example, requires recipients to use the UBI to purchase health insurance whether they want to or not). A person dependent on the wages of others is not free. These dependents will become the vapid Eloi to the hard-working Morlocks (The Time Machine, H.G. Wells, 1895).
The Universal Basic Income will be viewed by it’s recipients as an entitlement and a right while the productive citizens will view it as an onerous tax. Welfare is, at least nominally, temporary assistance. The UBI is permanent. A UBI will create a permanent non-working class. Proponents will assert that this will free the poor non-workers to pursue their dreams without financial worries.
Good luck with that. UBI is just another way of saying “from each according to his ability, to each according to his needs”, the mantra of the Communist Party. This Communist mantra left Soviet citizens sullen and disheartened, turning to vodka to cure their dejection while the population dwindled.
The UBI dependent underclass will not use their financial freedom to pursue art, literature or poetry. They will fritter away this largesse just like they spend their welfare checks. They may not realize that they have lost their freedom because they will still live in America but they will feel in their souls the vacuous purposelessness of their lives. A UBI doesn’t free people, it writes them off. Here’s some money, now go away.
Free people do not need a handout from the government or from their fellow citizens who produced the wealth. Free people take responsibility for their lives. As daunting as the technological revolution faced by most workers will be and as plausible as the implementation of a Universal Basic Income may be, we must reject this concept as antithetical to the basic principles of America. This technological revolution is not the only danger we face. Forces are gathering that will challenge the very existence of America and Western Civilization. We may be facing a dark time ahead. If we ever needed to stand by our principles, now is the time.
(The Swiss rejected the UBI 77% to 23%. Good for them!)