a labor market in which workers can support strong families and communities is the central determinant of long-term prosperity and should be the central focus of public policy.
In other words, instead of counting GDP, we should be counting workers with enough income to support families. He goes on to say
if the Working Hypothesis is correct, a basic income would be entirely unresponsive to the nation’s challenges; indeed, the idea represents an explosive charge planted directly at the weakest points in society’s foundation. It would make work optional and render self-reliance moot; consumption would become an entitlement officially disconnected from production. A community in which people capable of making positive contributions are not expected to do so is unlikely to be one that thrives on any dimension in which productive contributions are needed.
Yuval Levin cites this paragraph and praises the book.
But Cass is wrong on the economics. If you object to policies that make earning a living unrewarding, then you should object to the policies we have now and appreciate that a universal basic income would be a huge improvement.
Cass uses rhetoric to make the universal basic income sound anti-work. But it is not. It would be much more pro-work than our patchwork of means-tested programs whose phase-outs create implicit tax rates that average 80 percent on earned income for the bottom fifth of earners.
Apparently, more people need to get up to speed on the basic economics of the UBI.
UBI is unworkable as a uniform amount across the U.S., since cost of living varies so much. An amount that makes you comfortable in Alabama isn’t enough to rent a phone booth in California.
Also, if you are folding medical care into this amount, a UBI that pays for a healthy young person isn’t going to pay the insurance of disabled or elderly people. Increase the UBI to the level that supports the elderly, and you really are removing any incentive to work for young people.
If the dole were $3000 a month, why wouldn’t a group of twenty-somethings rent a beach house together and party, party, party?
“An amount that makes you comfortable in Alabama isn’t enough to rent a phone booth in California.”
Could that end up being somewhat of a feature of the program? It would create an incentive for some people to move to lower cost places and spread the population out a bit more.
(although a counter to that is it would likely be generally less productive people moving to lower cost places, not sure what the overall effect would be)
I agree UBI is unworkable, but disagree with Michael G above on some details. That the number is set nationally and does not take into account cost of living in different locals is a plus, as it would encourage an outflow of poor from overcrowded areas and increase the population of declining rural areas. The UBI is unworkable as society would never accept it as a substitute for all the means tested programs that now exist, so it would be in addition to not in place of those programs. And to not discourage work it would have to be given to all, including the rich. Michael G point about medical care is valid, as medical care would clearly have to be outside of UBI.
People say things like “well, living in California is a luxury good.” But do they really want to push all the poor (and elderly) out of the state? Do they really think if they all moved to Kansas or someplace, that it wouldn’t turn into a dump, with high crime and no hope of improvement? A UBI that forces people to move is going to create an American apartheid.
Don’t prices already do that? Indeed, isn’t that the point?
Is living in California a right?
Do we really want a UBI that “forces” (incentivizes) people to move from low-cost locations to high-cost ones, if we get the COLA formula wrong?
The goods that are making family formation unaffordable are the same ones that have been growing faster than CPI for decades: real estate (near good jobs), education (including real estate in “good” school districts), and healthcare. Most of these are zero sum goods. In fact they all have in common that they represent either the labor or proximity to high IQ people (and sometimes lack of proximity to low IQ people).
I don’t see UBI solving the problem of this inherent scarcity. So at best, assuming it was remotely affordable, all it could pay for is for relatively healthy people to do one of two things: crowd into cities and live several to a room in urban ghettos (call this the NAM model) or go out to rural areas without jobs and become permanent dole recipients (drink yourself to death on the reservation, become addicted to opioids in some dead coal town). That isn’t human flourishing.
I’m not sure local provisioning of supplemental welfare (which would be necessary since I doubt affordable UBI would cover healthcare, daycare, or education) is a solution. What we find is the NAM model…where a group of poor voters try to gain overwhelming numbers in whatever productive urban HUB they can find and then suck it as dry as the economic surplus coming from some productive sector (tech, finance, etc) will allow. Most of it coming in the form of expensive services in the sectors mentioned above. So you end up with really high GDP, but also high taxes and high rent such that it becomes impossible for the high IQ people keeping it going to form families affordably. That’s an unsustaintable IQ shredder.
Here are my predictions.
1) UBI will only ever be in addition to current welfare, meaning that if successful libertarians will end up playing the role of dupes that get nothing in return.
2) It won’t make family formation in the productive parts of our country affordable.
3) It may help contribute to Indian reservation style dissipation of those that try to turn it into a “lifestyle” by becoming totally cut off from society.
The article gets to something far more important. What is the purpose of our society? I can only speak for myself, but its something along the lines of “familism”. The purpose is to have a largely middle class first world society centered around families with a TFR or 2.X that can flourish on traditional American Dream lines. Materially, but also socially and spiritually.
There are other goals (like being able to advance human accomplishment more generally and bringing out the talents of our best citizens to push humanity forward), but the most important peg is sustainable family formation (which should make the second income optional while still achieving the main goals).
That means getting those out of control zero sum sectors under control. We can’t UBI our way out of it. Too often libertarians (including Arnold) seem to think a life of getting high and playing video games, or rat racing in some urban environment to accomplish nothing lasting in the world before dying childless, are examples of proper human flourishing (cause like they “choose” it). This is where we part ways. If that is your idea of human flourishing and a good society is that, maybe playing welfare state games might optimize for a generation or two. I don’t really know. I don’t really care. It’s a fundamental difference of opinion on the point of human existance.
It is impolite to introduce an acronym, e.g., NAM, without mentioning what it means.
I believe it stands for non-asian minority.
I would be interested in hearing UBI proponents make the case for why it’s better than boosting the EITC, all things considered.
The UBI is probably more appealing as a Big Swing, but I think the technicalities of it are damning, as pointed out by commenters above.
Boosting the EITC seems like it gives you most of the benefits of a UBI, but it does away with the swath of hurdles it’d have to overcome to work as intended.
The issue of replacing vs. complimenting existing programs goes away. It’s politically expedient since it’s an existing program that’s already popular. It strikes a workable compromise between compassion and bad incentives. It costs less money.
On a somewhat similar note, the idea of a UBI might be more feasible if it were re-positioned as a social dividend that re-distributes a fixed proportion of societal surplus, as opposed to a one-size-fits-all minimum income. You still get the benefits of universalism and an enhanced safety net, but the program wouldn’t have to deal with the additional weight of providing enough money to keep everyone out of poverty. A dividend program would also have an easier time of maintaining actuarial equivalence, since it’d be framed as redistributing X% of GDP, whatever that number may be, as opposed to everyone receiving X amount of money, which adjusts itself whatever the perceived poverty line is.
Being for UBI is like voting for Libertarian candidates. Both are examples of counterproductive, wishful thinking.
I vote Libertarian not because I think it’s worthwhile, but because I can’t stand to vote for the other parties. And in California, there’s no choice anyway.
Of course, after the way Gary Johnson botched the 2016 election, I couldn’t vote for him either. I left it blank.
But it is not. It would be much more pro-work than our patchwork of means-tested programs whose phase-outs create implicit tax rates that average 80 percent on earned income for the bottom fifth of earners.
The high-implicit tax rates created by phase-outs are, indeed, anti-work. They should be addressed. But that doesn’t mean a UBI wouldn’t also be anti-work. A UBI is universal — it doesn’t matter if you’re wealthy, able-bodied, and not looking for work, you still qualify. And even if the UBI is low, it provides 100% leisure time that can be used for home-production and off-the-books work. It would also encourage staying in (or relocating to) areas where the cost of living is extremely low (often precisely *because* those areas afford few work opportunities).
The point is, one should not just look at MTRs.
As a thought experiment, imagine that one faced 95% marginal income taxes, but without working, one goes homeless or even starves to death. Well, one still works.
On the other hand, imagine being a trust fund kid and getting perpetual allowances of $1M a year, but facing 0% income tax on any additional work. A typical person still doesn’t work.
Then again, there are plenty of high-income people who face nearly confiscatory levels of marginal income taxes who still work insane hours for intangible forms of compensation such as social status within their milieu.
So we see that the issue of marginal utility of wages under a variety of scenarios is a highly personalized question, and we have to be very clear about what we are trying to achieve for which people, and what the typical profile and responses of those people will likely be.
My own guess is that the typical marginal person loosely attached to the labor force and living off safety net programs, and who one may be trying to coax back into employment through some policy adjustment, would not be much influenced even via much lower MTRs, and that if they received simple UBI checks instead of in-kind benefits or vouchers for merit goods, they would squander that money on vice.
So, to summarize your “guess”, you feel that people on social safety net programs are typically uninterested in rational incentives to work, and if they are presented with any unencumbered money, they will likely spend it on cigarettes, weed, cheap vodka and possibly crack?
Can we get a moral superiority triangle going here? We just need one more person…
If only we had generations of experience with any actual, real-life examples of civilizational degeneracy and what happens to people’s work ethics and consumption choices and overall levels of social – and moral capital for their whole communities – when they get lots of government subsidy without having to work for it.
Oh wait! We have those trust-fund kids, or those oil-rich Arab countries that are basically full of trust-fund kids and cheap foreign labor treated like dirt. We have public housing projects and ghettos and “tragic dirt” neighborhoods, or dismal Indian Reservations, or the meth-and-opioid-and-disability-check-wastelands of Appalachia.
Recent UBI experiments (and there are ones going back decades, e.g., Mincome), such as the ones in Canada and Finland give us little reason to be any more optimistic.
Basically, human nature means that, as with the dole, UBI turns most of society into a Theodore Dalrymple book nightmare. It’s naive and utopian to believe otherwise.
I mean, if you’re cool with that in a non-judgmental judgmentalism kind of way, ok I guess. But I’m pretty sure you wouldn’t want to live there.
I will grant that social safety net decisions are difficult and dangerous, but you are arguing from cartoonish stereotypes.
You just argued that MTR’s don’t influence the behavior of people on social safety net programs much, but now you argue that transfer programs have perverse incentives. Do people on social safety net programs respond to incentives or don’t they? Make up your mind.
If society were ordered exactly the way you wanted it, there would still be people with problems, and some places where more of those people lived. There are a variety of reasons someone might need help. Everyone in trouble isn’t pathetic.
Countries that are stingier with transfer payments aren’t generally getting better results. Its a little more complicated than that.
I think as others have said, if you are going to bother providing help, it might as well be done intelligently and provide for a gradual path to climb out. Some will take that way out and some won’t.
We can’t expect these programs to solve human weakness, only help at the margins and deal with what’s left rationally.
I think Cass’s first quote is the essence of “sustainable patterns of specialization and trade” considering the nature of men and women. We need organic, predictable, low population growth from men and women getting together to form families, that’s what will create the stable foundation that will support whatever the next great innovation may be.
Put simply, the stable nuclear family with 2.X TFR is the only “sustainable pattern of specialization and trade” that makes one damn difference in the long run. Anything that fails to accomplish that is not worth considering.
I feel like this post is basically saying
“A well implemented UBI would be better than the current, poorly implemented, programs”.
One constant I see in all the discussion of the lower class is the use of “High school diploma or less” (HSD) as the relevant independent variable. Suicide is up among those with HSD; people with HSD make only 40% more than the poverty line now, as opposed to people with HSD before making 300%; the working class, defined as those with HSB if I am recalling Murray correctly, have only half of households with at least 1 full time worker.
What surprises me is how much people focus on the welfare state, which has probably caused lots of problems, but not on primary and secondary schools. We effectively define the group of people with deep social problems to be HSD, but then look everywhere else for ways to solve their problems. Perhaps the real problem is that the first 18 years of most people’s socialization is spent in comparatively awful institutions that neither educate nor train people on how to be productive.
Admittedly, the terrible state of public education is sort of a hobby horse of mine, so I might be subconsciously attributing all problems to it. The welfare state definitely did a lot of damage itself. It is quite clear to me, however, that incoming college freshmen do not have the skills one would expect a reasonably well educated 14 year old could muster. The PA Amish only go to their schools until 8th grade, after which they successfully run small businesses; I would not have any optimism of the chances of even the top 25% of high school students accomplishing the same feat.
If 8th grade students knew what they were learning would be used next year to run a business, I strongly suspect that they would learn an awful lot of it. But what they are expected to learn are academic subjects which elicit the classic, “When am I ever going to use this?”
I think Arnold and Oren Cass are talking at two slightly different groups. Imagine that the bands of poor to rich people are like:
|– Group A –|– Group B –|– Group C –| …
Group A is the current group “stuck” in poverty by the high marginal tax rates of current programs. The wall between Group A and B. Group B is what we call the “working poor”.
I believe Cass is saying that a UBI would have detrimental effects on Group B, while having minimal effect on Group A. While Arnold is saying that a UBI would make it easier for Group A to climb up.
Arnold feels that a UBI would remove the wall between A and B. Cass says that even with the wall gone, Group A would not bother to cross it, and a lot of Group B would fall down into A.
That’s a good way to put it. And my view is that Cass would have the better of the argument, had it made it that way. The example of welfare reform demonstrates why this is true.
When the work requirements of early welfare reform were proposed, the progressive media and academic experts were nearly unanimous in their alarmist predictions of millions of people who “couldn’t” work basically being forced only the streets to starve to death.
And then the reform was enacted and the sky didn’t fall. Almost all those previously unemployed people who suddenly now had to get jobs went out and got themselves jobs (regardless of whatever the effective MTRs were). Because they had to: the alternative was much worse.
Now, as a thought experiment, just run this process in reverse (which is the equivalent of running it in the original instance, which led to all the social problems and community pathologies that created the need for reform in the first place). That is, people with jobs got easy welfare money and dropped out of those jobs in favor of, ahem, ‘leisure’.
Whether or not having a productive, disciplining occupation is part of one’s “vision of life properly lived”, as anyone with experience managing kids or people who are not all self-motivated intellectuals and occasionally have nothing to do will tell you, idle hands really are the devil’s workshop.
For some people the problem is making them work. For other people it’s making work pay. For yet other people, when it turns out to be wasteful or have anti-social consequences, the problem is working too much.
Without recognizing that people are vastly different and treating them accordingly, there is just no good way to accomplish any major improvement by tweaking tax rates or the form in which the dole is paid out.
It seems to me that Oren Cass is jumping on the “Toward a New Conservatism” bandwagon, and his particular prescription is a kind of past-due updating of “Reform Conservatism” as per Douthat and Salam’s Grand New Party, but much more willing to intervene than with just some tax credit subsidies: Republicans as Neo-Reformicons.
To actually work politically it would need to be a little more ruthlessly clientalist in terms of sending benefits exclusively to Republican voters, but he shows some sign of understanding the insight about ‘strategic electorate shaping’ by which the use of state power and money to nudge towards or enable certain life path scenarios (for instance, single vs. married with children) creates personal and political interests that tend to influence ideological and political views and create loyal voters for one side or the other.
If, for example, there’s a huge ‘marriage gap’, and married women tend to vote GOP twice as often as single ones, and there is pent up demand for marriage, if only the government would make life just a little easier in certain ways, then the right targeted interventions can make more Republicans, which sets up the clientalist positive feedback cycle of political power -> provision of targeted, life-changing support to marginal types -> more loyal voters -> political power. If the life-changing is actually positive, and you don’t do more harm than good in providing it, then you end up doing both good and well.
Now, it’s possible to be completely cynical and say the kind of life circumstances one should encourage should be only those that help one’s party get elected, but usually intellectuals have try to build a coherent narrative about what the overall goal should be and it’s impossible to do that without settling on some vision of ‘the good’ or what it means for a life to be well-lived. Conservatives in particular find it hard to resist coming up with visions that help everybody, even those who won’t vote for them. Libertarians may be more comfortable with a “laissez faire / light touch and let the chips fall where they may according to the aggregation of individual choices” vision-free approach, but as usual that’s never a very popular message at the voting booth.
And what Cass and his competitors (and his predecessors) seem to be honing in on is a vision which I’ve called “A decent life for decent people”, that is, intervening to make 1950s-style family formation and the associated lifestyle more feasible, affordable, and common, in an effort to mitigate the fallout of the gradual economic transformation which has been occurring over the last half century, and the general collapse in social capital in the portion of the lower half of the distribution which has some potential of being salvaged from the underclass, mostly the virtuous ‘working poor’ proletariat and petite bourgeois strata.
Overall I think his economic diagnosis is, if not entirely fault, erroneous in parts and thus importantly incomplete. He is dismissive of the severity of the problems posed by automation and centralization, relying on historical argument, but “this time is different.”
He glorifies labor (the “production” which should be connected to consumption) a bit too much as if everybody desires and derives motivating satisfaction and rewarding fulfillment from work, but that’s just not the case. Instead, the need to work to consume, for more people. is a good in and of itself because it provides the disciplining incentives necessary to prevent personal degradation and civilizational degeneracy.
He’s right that while lots of things have gotten cheaper and better, other key goods and services (those Neo-Ricardian sectors) have had prices inflated to suck up all that extra surplus and more, diminishing welfare in a way that is hard to capture with ordinary economic statistics.
He is generally correct about the insanity of our higher education policy and system, but does not quite go full Caplan with the analysis and implications. He doesn’t mention Hansonian Medicine at all, though that is a key issue as well. In that article he doesn’t get much into why the rent is too high where the good jobs are, or what to do about it (if anything). Mostly he focuses on shoring up the labor market and ensuring that work pays.
He mentions the problem of “men being less attractive as marriage prospects”, but he stops well short of getting into the ugly realities of what would be necessary to make them attractive enough again to be marriageable in a social structure and legal system completely transformed by a progressive feminism that abhors bond-strengthening dependencies.
At any rate, the vision of Cass’s version of A New Conservatism is pretty clear. What’s not clear is whether his recommendations on how to get from here to there would actually stand any chance of working.