One striking thing about guaranteeing a basic income is that it’s always had support both on the left and on the right—albeit for different reasons. Martin Luther King embraced the idea, but so did the right-wing economist Milton Friedman, while the Nixon Administration even tried to get a basic-income guarantee through Congress. These days, among younger thinkers on the left, the U.B.I. is seen as a means to ending poverty, combatting rising inequality, and liberating workers from the burden of crappy jobs. For thinkers on the right, the U.B.I. seems like a simpler, and more libertarian, alternative to the thicket of anti-poverty and social-welfare programs.
Pointer from Mark Thoma. A few thoughts of mine:
1. The apparent left-right consensus breaks down if in the last sentence the left is thinking that the word “alternative” should instead be “in addition to.”
2. There is a question of how to finance the UBI. For those on the right, the answer is by getting rid of the other programs. For those on the left, it may be less clear. See (1).
3. The existing approach to anti-poverty programs fits with what in my forthcoming book I describe as real-world economic policy: stimulate demand, restrict supply. Food stamps stimulate demand for food. Housing subsidies stimulate demand for housing. Student loan subsidies stimulate demand for accredited colleges. Medicaid stimulates demand for medical services.
A UBI would allow the recipients to decide on their own priorities. It thus lacks the base of support that the other programs have.
A few more thoughts on UBI:
1). The UBI will be good for improving mobility, but a negative for reducing inequality. I suspect it’d make the latter worse.
2). It might be a good idea for it not to be too basic. Ie, you’d want to have SOME sort of offsetting variable that introduces constraints on the payout. This is desirable for both fiscal and behavioral reasons.
3). The logic behind a UBI is probably sound, the politics most definitely is not, which might make the idea desirable, but unfeasible to implement.
Scott Sumner has said that UBI is impossible (thus not worth discussing) because either:
1. Replacing most of the existing system is obviously a political non-starter, or;
2. If on top of current system, it would cost way too much in new taxes, or;
3. If ‘cheaper’ it would accomplish too little to justify itself.
I tend to view the first reason as sufficient to arrive at the same conclusion.
What does making it more expensive “accomplish?”
There is something else to support Scott Sumner’s views:
“UBI” is not about “INCOME” it is about distribution of consumption power.
Income (going back to Stanley Surrey’s famous tax question – “Is it Income?”) has to be generated. The concept of UBI obviates the necessity for that generation – focusing on distribution and the effects of such distribution.
One problem with UBI that I’ve always anticipated, but never seen addressed, is: what happens to people who blow their UBI on drugs and alcohol?
Since UBI is unrestricted, and doesn’t solve the problem that some people are terrible decisionmakers, we’re still going to face the prospect of persons who will starve in the street without targeted governmental assistance. Perhaps some libertarians are willing to write off those persons as having had their chance, but do they actually expect the political resolve to tell those folks to bugger off?
Yeah. Let’s not even take the drugs and blow case. Unexpected medical expenses without insurance would do the trick. We all know how its going to go down when it happens, and it won’t be leaving people on the streets to die.
Charles Murray wanted $3,000 of UBI to be set aside for medical expenses, but that isn’t actually enough to purchase health insurance today.
UBI can replace predictable monthly government programs (EBT, section 8, maybe child care assistance or whatever), but it seems unlikely to replace actuarially predictable but individually unlikely expenses. I think you could make something of a case for “I blew my UBI for the month and now I can’t eat till next month” not getting a ton of sympathy, but not the medical example.
I think the primary thing UBI might be able to do is make the marginal tax rate on people in that $30,000-$50,000 limbo better.
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The biggest thing UBI won’t address is culture. You can actually get cheap rents in NYC or SF…if you live in the ghetto. Many of the problems the poor have are living around other poor people, because underclass isn’t just about money its a mode of behavior. If you give them all the same check they still have to live around one another, and middle class people just have to pay more money to price the underclass out of their neighborhoods.
I agree with both of the points listed here.
A UBI will be good for overall societal mobility but will amplify behavioral inequality and leave the inept in about the same spot as they were before.
It’s one of the reasons why you’d ideally want incorporate some element of uncertainty in its distribution to alleviate the incentive problem, but that’d be difficult to do politically.
As Matt Bruenig pointed out, there are also people on work income and on rent (capital) income who blow their money on drugs and alcohol. Yes, also often to the detriment of their dependents. If we want paternalism for transfer income recipients – don’t give them money without big strings attached, for their own good – why don’t we do it for the other sorts of income as well?
Surely your kids suffer just as much when you’re a meth addict, whether you got the money from welfare, rent, or working at the meat packing plant.
But I’m not too worried about it. We’re all descended from people who survived you know, universally terrible decision makers I think are much, much rarer than conditional terrible decision makers. And desperation something we know can make anyone a bad decision maker.
Alternative or in addition to can be misleading. If you are only redistributing what is currently paid to the poor upward, it would be devastating to the poor and meager upward, so even if you eliminated all other programs you would have to increase the size which would an addition, so it needn’t be all or nothing. If you favor a UBI, you should favor a more progressive income tax. If you don’t, you just want to cut benefits to the poor.
The minimum wage is a kind of exception of the usual polarity.
In terms of the market for labor, the progressives want to raise the price floor, enlarging supply, but suppressing demand even more.
Libertarians and some conservatives who want to eliminate the minimum are the ones who want to boost demand and slightly lower supply vs the status quo (and assuming no change to other immigration and welfare policies).