There is no better example of the folly of the elites than the current fashion for a universal basic income among both liberals and libertarians. Instead of trying to figure out something hard, like how to build an economy that provides adequate work for everyone, the idea is to do something easy, like give them checks.
To which I reply, better to do something easy than something stupid. And if you assign the task “build an economy that provides adequate work for everyone” to technocrats and politicians, they will come back with something stupid.
Leave the hard work of actually creating jobs to entrepreneurs. I do not promise that they will “provide adequate work for everyone,” but they will tend to create patterns of sustainable specialization and trade. As for government policy, my first thought on jobs policy is always to reduce the payroll tax and to de-link health insurance from employment.
“As for government policy, my first thought on jobs policy is always to reduce the payroll tax and to de-link health insurance from employment.”
That sounds pretty hard to do, given the special interests that favor at least the second one.
“Leave the hard work of actually creating jobs to entrepreneurs.”
Those greedy bastards who are destroying the planet? I think we’re disincentivising them right out of the system. All the better to sell the government solution as the only choice we have.
The middle ground position is to subsidize employees indirectly by subsidizing employers and entrepreneurs directly. The private sector figures out the ‘how’, and competes to try and discover how to do it as efficiently as possible, and the government just pays the bill (which is pretty much the way everything is going these days). Highly Regulated, but Competitive-Market-Outsourced Socialism.
Meanwhile the employed neither perceive themselves to be on welfare, nor do they suffer from that stigma (which is currently the case with EITC).
But lowering the payroll tax and decoupling health care from employment are also, effectively, similar employment subsidies compared to the baseline scenario. Again, entrepreneurs figure it out, government pays the bill.
No. As Arnold points out the technocrats and politicians arrange for payments **through** governmental sources from US.; not the U.S. .
Leave the hard work of actually creating jobs to entrepreneurs.
Because entrepreneurs primary goal is make money not create jobs and we living in a world of over-supply of labor.
This is the primary reason the birth rate is dropping and economically needs to drop.
Bingo. All these employers that must provide health care, etc. etc., don’t know how to do it. They just out-source it, unless they are big enough to have a special department for it. Either way, it’s an inefficient way to do things compared to the government collecting a tax and then just offering bids to get the policy implemented.
“reduce the payroll tax and to de-link health insurance from employment”
That’s generally my first idea too, but especially with the second the devil is always with the details.
One of the things I like about the basic minimum income is that it’s the exact sort of policy lever a government ought to try and pull.
Governments have a comparative advantage in collecting money, cutting checks and enforcing rules. Arguing for improved government policy in one of these areas strikes me as reasonable because it’s within the jurisdiction of something they do well.
“Building an economy” is the exact sort of thing elected elites ought to stay away from since it requires more local knowledge than they’ll ever possess.
It’s nice to see the stance put so plainly, because that does seem to be the tradeoff involved with a universal basic income versus a dense regulatory state.
It seems practically impossible to “build an economy that provides adequate work for everyone”, especially if “adequate” means that you can pay for your own health care. Has it ever happened in history before? I am not aware of it.
Aside from that, it seems economically inefficient to force individual businesses to take on welfare functions. Any time you force an employer to provide some benefit to an employee, it seems inevitably less efficient than if you taxed the employer and then provided the benefit through some public bureacracy.
The worst, though, is that any benefits program is only going to benefit people who are actually employed. I suppose this gets back to the beginning, though: how exactly is it supposed to be possible to employ everyone? Many people have no skills and have severe health problems, and many people will decline any honest work anyway.
The defacto plan of the elites for the economically dislocated is food stamps and Oxycontin. The right wing version comes with, “you shoulda got married” and the left wing version comes with “you should hate the other side’s billionaires”.
Libertarians ought to about clearing away the obstructions to revving up the creative side of creative destruction, but that might threaten their status, so it’s off the table, so they are merging into their role as the libertine left …
+1
Nice turn of phrase, but I think about that stuff all the time and don’t know any libertarians concerned about their status. Maybe Tyler Cowen, but that is a stretch of the concept. Some people have to keep their job. Are you dumb enough to share your extreme political opinions at work? What is Will Wilkinson’s “status?” At best maybe you refer to the guys playing the game to be subversive.
Seriously, who are you talking about? Because I must be missing an entire swath of the sub-population.
I feel like I’ve said “when in a quasi-depression, and your main secular and cyclical problem is the marginal cost of labor, your key legacy legislative push shouldn’t be to ignore the economy and make the main problem even worse forever” until I’m blue in the face. My status is about to kick in any second now!
Some deeply troubling thoughts….
In a very deep sense, being freely paid to do work in some kind of labor market, is one of the strongest ways in which the political economy says “we value you”.
(Raising children in a sound household surely has similar rewards.)
Any payment or in-kind distribution that isn’t of that form, won’t convey that message.
Being unemployed, especially when total unemployment is pretty low, is basically a very strong message of the form “you are so useless we literally don’t know what to do with you”.
Another deep issue is the idea that “society values all of its members” – at least the one who aren’t felons. There are long term genetic reasons for this to be good policy. And it’s probably close to reality in highly homogenous societies.
It seems very clear to me it’s not true for the US as a whole or Europe as a whole. Would anybody in CA actually care if all the unemployed or soon-to-be-unemployed coal miners in WV simply disappeared? What percentage of the population as a whole would actually know or care if the members of various under-classes simply disappeared?
If every “street person” in Seattle metro simply died over the next year, what fraction of the population would actually (a) notice and (b) care or be alarmed? For sure there be would lots of random noise from both the left and the right, but would the majority of the population pay any real attention?
My fear of this thankfully unlikely counterfactual is that it would reveal “no, actually, nobody cared or even really noticed.”
There is of course huge precedent for exactly that….
1) People care about people they see as being part of their in-group. It’s a sliding scale, you care more about your family then WV coal miners. More about WV coal miners then random people on the streets of Calcutta.
What bothers me is people who have very narrow in-groups, and use false altruism for far away others to justify not giving a shit about relatively closely related people. Far from being more expansive universalists, in general such people tend to be intensely narcissistic egoists with very narrow moral spheres. The rest is propoganda.
2) All charity has natural limits. We give free college to Native Americans and not Blacks. This has nothing to do with the relative reperations in either case. It’s driven purely by the fact that as a much smaller part of the population we can afford it for Native Americans but couldn’t afford it for blacks.
It’s similar with WV coal miners vs the whole third world. You can imagine developing a society that integrates the lower portion of the white bell curve reasonably well. You can’t imagine one that integrates a few billion NAMs.
Arnold mocks McCardle for not wanting to do something “easy.” Meanwhile, Arnold wants to multiply the problem McCardle is pointing to – too little productive, remunerative work for the population we have now – by inundating the country with millions more unskilled, third-world immigrants. Thanks for the insight, Arnold.
As the kids used to say, slow your roll. What Arnold talks about is removing inefficient programs and replacing them with more efficient ones, the exact same thing Mcardle is suggesting , in this case of the mish mash of welfare, a version of a single handout, but less risky than giving the elites something complicated.
I’m just asking, given the problem we have with having more people than we can provide with useful work, why should we – as Arnold seems to believe – import millions more unneeded, unskilled immigrants? For that matter, why do we import STEM workers when our own STEM graduates have trouble finding work? If the government should do “easy” things, why not start by cutting immigration going forward (those who are already here are another matter)?
“Instead of trying to figure out something hard, like how to build an economy that provides adequate work for everyone, …”
This annoys the hell out of me. Just like the prez candidates that stand at a podium and shout, ” I know how to create jobs! So vote for me!”
The government doesn’t “build” an economy. It simply needs to install a few regulatory guardrails alongside the entrepreneurial & business highways and then get out of the way & let those folks drive on: researching, developing, commercializing, marketing and selling things people want.
The economy would heal itself if there weren’t presently so many impediments to doing so.
The following comment appears under McArdle’s article of 28 March:
“. . . build [construct?] an economy . . .”
Is that anymore feasible than designing a society (social order)?
Surely that is not the right phrase.
Or, is it to be a “Tower of Babel” approach?
Despite views as scholarly as Schumpeter and Lippmann, the “economy” is not to be conformed to achieve social order objectives. Both a society and its economy are shaped by the same factors and forces, though sometimes (usually?) in differing time spectra.
What forms a society and its economy are the relationships within it.
Devolutions to “Administration” of conduct can not create true relationships any more that they can artificially create life; but, they [do] destroy relationships and the conditions for their formation, just as death and disability can be delivered.
The now broadly required intermediations of an Administrative State for the formation of, and interactions in, relationships have become more and more officious intermeddling with people working for and with one another.
While it will not end all the problems of “cycles,” reducing the Administrative State is essential if people are to work for and with one another in ways that will open the development of the economy.
I agree with McArdle that the “universal basic income” idea is motivated by contempt. Silicon Valley types (and I used to work there) can’t imagine that your average high school graduate has anything at all to contribute. So just pay them off and let them move to Kansas or someplace they can afford.
But I disagree that its possible for the government to find work for everyone. Deregulating might help, but as software and robotics continue to advance, this problem will only get worse. Massive immigration won’t help either. There is already an oversupply of poorly-educated low-skilled people.
We’re already seeing a reaction — $15 minimum wage, anti-trade sentiment on both left and right, and radical candidates like Sanders and Trump. We’d better start seriously thinking about what we do if robots really do kill the rest of the low-skilled jobs.
All those “solutions” increase the cost of low-skilled labor. So, the betting man’s response to robots would be counter-productive reactions, and thus, bet on even more robots.
So, the answer to your hypothetical is… security robots.
I’m not sure I can buy a keep the elites off the streets strategy. I’m not even sure they are all that elite.
I listen to (read) Larry Summers. And he is like their top-of-the-line. Everybody always cheers him, but I’m always like “that must be so smart i don’t even get it, because…tt honestly sounds kind of dumb.” That is why I come here (and places like Bloomberg View) and I suspect why we don’t see a lot if Summers quotes in places not so interested in intellectual theater.
It is actually a little scary. Is the purpose of the elite simply to limit the number of “elites”? What happens, when the jig is up?
What about moving the paperwork, regulation, taxation, mandates, etc. for new hires and employees employed for less than, say, a year or six or three months as close to zero as possible? Not counting equal protection for health and safety of course, and various other details. But those things shouldn’t have much marginal cost. Hazing, in fact, can be viewed as having to artificially increase the marginal cost of new hires. How much economic “hazing” is there embedded in the current law?