A UBI will do the good things I claim only if it replaces all other transfer payments and the bureaucracies that oversee them. If the guaranteed income is an add-on to the existing system, it will be as destructive as its critics fear.
Relative to what I have suggested in the past, Murray proposes a higher UBI. From a budget standpoint, he does this by replacing Social Security.
As a lot of destruction must have a silver lining. These always assume administrative costs are orders of magnitude greater than what they are. Mostly he does it by cutting payments to the elderly by more than half. No less destructive, just destructive in a different manner, but they don’t work anyway, at least not yet.
You can phase it in. The private sector figured that out like 200 years ago.
If it is good, it will be good as an add on then. Phasing it in would be exactly what you would want to do but what he asserts would be destructive.
An add-on wouldn’t be a phase out of the alternatives. Are you arguing math or politics? We know the risk of all this is that it would just be another piece of trash thrown on top of the garbage heap, at least some of us know that. In another hundred years, maybe government will learn that you can allow new members to choose one or the other. And there are ways to even make the least extractive option more favorable. You don’t even have to resort to behavioral economics to get individuals to choose an option that is better for them in the long-run, but you could. This is kind of silly discussion. If you think that people just need more cash, then you are already arguing for reducing the other entitlements, or you’d be arguing to increase the entitlements.
“If it is good, it will be good as an add on then.”
This is false, btw, unless and only if your definition of “good” is “people get more cash.” But even then it can’t be strictly true, because what is the alternative for comparison? The cash has to come from somewhere, but nevermind that. Even if the money is from heaven, the other alternative is how to distribute it. That means the default comparison is to standard in-kind and managed distribution. So, defining it as good as an add-on says it is either preferable to doing it as in-kind transfers or we currently have the perfect amount of in-kind transfers right now. So, I think the only two choices is that UBI should phase out in-kind managed transfers, or you think that people should get more transfers no matter what form they take.
“…only if it replaces all other transfer payments and the bureaucracies that oversee them.” This will never happen under the current political system. The entire trajectory of government is ever greater tracking and control over every penny spent and every action taken. This is, in fact, why people enter government: they crave power and control over others. They, their unions, and the billionaire crony capitalists who benefit from leviathan government will send rioters right into the halls of congress, if the proposal gets so much as a public reading. The legislators will fear for their lives. Not going to happen.
Real estate prices make this impractical. On $10,000 a year, there’s literally not a single apartment (even a studio) in Silicon Valley that you could afford. Seniors or the disabled would have to group up with several other people to afford a place. Maybe five people on this income could afford a two bedroom apartment?
It’s either that, or move away from the coasts and big cities if you are on basic income.
The old idiom is, “beggars can’t be choosers.”
But that doesn’t work in a redistributive democracy. Especially if there are a lot of beggars. Then they do indeed have some ability to nudge their outcomes in the direction of choosiness.
Maybe a political axis could be defined along a spectrum of how choosy people think beggars are entitled to be.
That’s one of the strange aspects I suppose. The people most likely to use basic income to experiment in productive pursuits would also need to live in expensive areas to pursue them. $10,000 doesn’t make a Harvard grad any more likely to turn down BIGLAW for a startup.
$10,000 probably goes a long way on an Indian reservation, but it also seems to lead to lives of drunkenness and pathology.
UBI is the kind of idea that sounds great in theory, but it presupposes:
A) political tradeoffs that probably don’t exist (you aren’t getting rid of welfare in exchange for UBI)
B) That you have a population that for the most part wouldn’t degrade under such conditions (i.e. most of the bell curve would not fall under the heading, “idle hands are the devil’s plaything”)
So I guess I’m not against it but I also wouldn’t be excited if it were proposed. Kind of like how I’m not against healthcare reform, but once you get the healthcare reform ball rolling our system was probably only capable of the monstrosity of Obamacare.
IIRC, Sam Altman is supporting some UBI research in the Bay Area.
The trouble is emotional blackmail. Progressives never tolerate ‘deserved destitution’. Indeed, their weltanschauung narrative effectively rejects the very possibility of such a thing for most people (at the very least all ‘under-privileged’ people – most of the people who need and get the benefits at present), always diverting the ‘real’ blame to the ‘root causes’: dark forces of social oppression. These forces are also deemed responsible for the ‘failures’ of bureaucratic government programs, which makes it impossible to convince them that these programs are counterproductive wastes the elimination of which is clearly superior to the status quo. They’d rather ‘eradicate the hate’.
If you give poor people resources and free-ish choice over how to use those resources, some of them will certainly blow it on vices, get themselves into desperate situations, and really hurt themselves and probably other people too. And then they will need more help to avoid suffering and producing negative social externalities, and the progressives will label anyone who says “but they deserve it; they chose this,” as a heartless monster.
Even if restricted to ‘merit goods’, some are certain to simply be injudicious with regard to their expenditure choices, choosing to splurge instead of invest, say, in education credentials. And then the progressives will start going on about inequality and poverty traps and the need to intervene here too.
Murray writes:
That’s really wishful thinking. It won’t change the social framework at all. What’s his basis for even saying that? All the evidence of political experience points in the opposite direction.
What did people say to ‘Katrina victims’ who avoided paying the cheap flood insurance premiums all those years? It wasn’t, “too bad, you had your chance and you blew it.” That’s not how emotions like compassion and sympathy are generated. If the ‘social return’ to expressing those sentiments doesn’t change, neither can the politics related to them. The same split was in evidence during the whole ‘foreclosure vs. forgiveness’ argument cycle after the housing bust.
There is no limiting principle or logical limit to New Deal / Social Democracy-style ‘economic security’ when the tacit standard for quality of living is what is merely socially and politically acceptable at the moment. Just like when the government changed the definition of the poverty line from an absolute to a relative measure – semantically guaranteeing that “ye have the poor always with you”.
I’m guessing Murray’s assertion originates in a fallacy of projection. Conservatives and Libertarians are indeed reasonably comfortable with ‘tough love’ and favoring ‘moral hazard’ arguments and saying “serves you right” and “tough luck buddy, these are your just deserts.” Or even “just this once, and now you’ve got to submit to some paternalistic program to force you to mend your ways, or else you get cut off.” Progressives aren’t like that.
Probably you see the easy analogy with bail-outs, ‘too big to fail’, and the difficulty of making credible, ex-ante commitments to not intervene in some future exigency and let some individual or institution go under and suffer the consequences of their mistakes.
Cochrane grasps the problem too when he writes
Can’t you just hear the progressives saying those exact words. If you oppose Obamacare then you must favor letting people “die in the streets” and so forth.
The bottom line is that UBI (the version that is a replacement for the paternalistic, goods-and-services redistributive welfare state) is trying to treat the symptoms of disincentivation and bureaucratic inefficiency instead of curing the cultural and political disease that makes the interventions that generate those symptoms inevitable.
Murray is hoping it might be possible to use UBI to ‘bootstrap’ (or reincarnate) the social and cultural capital that would generate the values, norms, and attitudes needed to be firm with the feckless who cut through their own safety nets. That’s the only way we would avoid the harmful yet inevitable re-bureaucratization that would come from predictably yielding to the irresistible political temptation of taking from Peter to pay Paul – for patrons to redistribute economic surplus to clients – that is simply inherent in our system.
No such system could be stable against the effective formula and style of democratic political argumentation that has led us to the present state of affairs. The cultural work needs to be done first, and probably can’t be done so long as there is still surplus to redistribute, and sob-stories the opinion-makers can use to pulse the bleeding hearts in a democracy like ours.
It seems the easiest solution is to have a population tightly woven around a bell curve average of social behavior and productivity. Then hard luck cases, deserved and undeserved, would be relatively few compared to the general population and difficult to organize politically. Also, you would have common cultural tools to better manage hard luck cases.
If you have a lot of people on the hard luck side of the bell curve, and they have some feature that makes it easy to organize politically, it seems inevitable that you’ll be able to form a successful political coalition for gimmedats.
Trying to destroy people’s sympathy and compassion seems like a losing way to cope with such a demographic problem. For one, its likely to have downmarket effects on common everyday human interactions we find distasteful. People that can leave someone to die in the gutter can just as easily leave their spouse if they become sick. Or cheat someone in business deal if they think they can get away with it.
Part of living in a high trust culture, which has many benefits, is dealing with a few negatives of good intentions gone awry. Whether those negatives will outweigh the positives depends a great deal on the nature of the underlying population.
I have two different observations on this, all of which I think differ from anybody above (but I think most of those are sound too.)
1. The function of benefits-in-kind (food stamps, medicaide) is to MAKE VISIBLE PROBLEMS GO AWAY. The median voter who sees the whacked out drug head lying in the street, who spent his money on meth instead of food, does not actually care about him (in spite of what they say) They care only a little about his children. Rather, THEY WANT HIM THE F**** OFF THE STREET. And so benfits WILL be focused and controlled because to a large degree they are NOT ABOUT taking care of every person, they are about making visible problems GO AWAY. (If you doubt this, read about the current drama in Seattle over a homeless camp called “the jungle” – the progressives and various bleeding hearts want humane solutions, the voters who are about to lynch the mayor want the crime and public disorder it imposes nearby to stop. They want it to go away….)
2. I think that Murry (and perhaps others) have missed a key strategic fact. Over any reasonable near or middle term, the total dollars in large programs, and the per-capita spending in large programs in each state, really cannot change. In other words, a UBI scheme CANNOT COST LESS because entire segments of the economy in every state depend on spending by people on social security and medicare. Don’t think about the people those programs nominally serve, think about where they spend their SS dollars or medicare benefits. If you suddenly limit social security to $13,000 per year, do you really think that say WA state will remain solvent (when no old person can pay their property taxes anymore?) Do you really think you won’t have outright riots by SS receipients AND those they consume from?
The UBI arguments are too abstract, and too focused on individual persons getting the money – they miss the embedded assumptions in people’s lives, and above all the embedded flows that depend on the current system. Always remember that the big players (social security and medicare) are wealth transfers mostly from the young middle class mostly to the old middle class, and have relatively little to do with poverty abatement.
UBI addresses issues that society on the whole doesn’t actually view as problems….
A lot of the discussion against the UBI seems to be focused around its inability to mute the bad behavioral tendencies of those on the left tail of the behavioral distribution.
I think they’re probably right. A lot of those folks probably need enforced conscientiousness more than they need free money. And worse, there are probably a good portion of people who currently live on the economic fringe and do most of their work out of some fear of insolvency that’d fall prey to the vices of idleness that aren’t there when they have to scoot along to keep paying the bills.
I once had a girlfriend who had two kids before we met, was working two jobs, was pretty broke, and didn’t deal with stress very well. When she got bouts of anxiety she’d cut herself.
She was motivated to get out of the spot she was in, but behaviorally had average intelligence, poor social capital, and little impulse control. In theory she’s a person many would use as a mascot for the benefits of a UBI, but in practice I doubt it’d do much to change her plight. She’d be alleviated from the necessity of working two jobs, but I doubt she’d have the fortitude or the judgment to make the best decisions about what to do with her extra time and money, and her friends and family sure wouldn’t do her any favors either.
The results might be sad if you visited her 5 years after she got her UBI.
However, I think an underdiscussed benefit of a UBI is it’d allow a lot of capable people to sidestep the most pernicious effects of our bad institutions. I get the impression there are a lot of folks who are basically bright and put together who trod along various conventional paths that aren’t particularly well suited for them because it’s their best choice to get a decent payday.
They’re not too happy about the tradeoffs they’re making, but they trod along anyways because it’s too hard for them to change course without risking financial ruin. Imagine the 31 year old lawyer who did well in state school who now realizes her job is pointless and would rather take a chance to pursue some business idea if only she had the time/money to get it off the ground.
For those people I imagine the UBI would be very beneficial and over the course of 10 to 15 years the social surplus generated from people of that ilk re-deploying themselves towards higher risk/longer incubation that they wouldn’t be able to navigate to otherwise could be quite large.
So perhaps an irony of a UBI is that it wouldn’t do so much for the poor as it would for the middle and upper-middle-class.
If it is going to be politically impossible anyway to replace everything with a UBI (we may want to start by calling it something not so reminiscent of a UTI), then why don’t we start with an opening offer to replace everything with nothing?
What change(s) might we see in the the national character of the United States, that is, in its social, moral, and political norms, if every person over “x” age looks to the federal government for some level of income?
Codevilla has an interesting look at the effects of different regimes on a country’s cultural environment in his book, The Character of Nations.
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“The UBI is to be financed by getting rid of Social Security, Medicare, Medicaid, food stamps, Supplemental Security Income, housing subsidies, welfare for single women…”
All those things can add up to $60K/year for a “poor” person — why would they or their patrons sign-up for such a drastic cut in benefits?