Sunday, July 22, 2018

Universal Basic Income: a Terrible Idea

It's difficult to understand how a guaranteed income "provided by the government" (that is, taken from taxpayers who earned it) could be promoted as a "libertarian" solution to the expanding welfare state, but apparently it is.  Just as an example, Cato Institute's Michael Tanner finds Universal Basic Income (UBI) an intriguing idea.  Intellectual Takeout's Andrew Berryhill notes some recent experimenting with UBI in California and summarizes some recent arguments pro and con.

Many people, including Hillary Clinton and Mark Zuckerberg, have endorsed UBI.  But the "libertarian" arguments for UBI are what are intriguing.  The gist of this "libertarian"argument is that the UBI would replace the rest of the welfare state.  It would be less expensive to administer and be less distortionary, having fewer perverse incentive effects.  And the welfare state hasn't ended poverty, so maybe this would work.  (These are from Tanner's piece.)  Prof. Michael Munger of Duke University proposes it as the solution to  economic dislocation and -- tellingly -- compares it to Otto von Bismarck's welfare state, which Munger seems to think was a great success.

A number of people claiming to be libertarians have either endorsed UBI, e.g. Munger, or, like Tanner, suggested we contemplate it.  Berryhill takes no discernable position and simply reports, concluding his piece, "what do you think?"

OK, here's what I think.  This is a terrible idea, it's anti-libertarian and would have catastrophic moral and economic effects if adopted.  Here's why:

1. The argument that this could replace the many welfare programs and streamline the welfare state is one of the stupidest arguments I've ever heard. "We libertarians will agree to UBI and in return you agree there won't be anything more." There is no way such a deal could be enforced, and it would not be. The welfare state would expand. Anyone who disagrees is welcome to explain how once a national UBI was put in place, future politicians could be prevented from introducing more welfare programs. And since with a UBI most people would become accustomed to the false idea that it's a proper role of govt to provide everyone with income, it's hard to imagine what arguments could be used against such expansion.

2. If we were to have a UBI, how much should it be? Like minimum wage, it "obviously" would have to be high enough to allow people to live in dignity, right?  I'd suggest about $55,000 per person (roughly the US per capita GDP) should be fair, right? Why should some have so much when many others have so little? (I hasten to remind readers I believe the UBI should be zero, but once one agrees to UBI, I have no idea how to argue against making it ever bigger.)

3. The UBI would not end poverty.  People are not poor because they don't have enough money -- "not enough money" is just the definition of "poor," not the cause.  People are poor because they are unproductive and don't care for themselves, and in most cases, I think, this is because they won't care for themselves.  But whether they cannot or will not, handouts stolen from others do not solve the problem, and only reinforce it.  Teach a man to fish, and he can take care of himself.  Give a man a fish, and you turn him into a hopeless dependent.

4. Relatedly, guaranteeing people an income just for existing would reward indolence.  "You can spend your day taking drugs, watching TV, playing video games -- don't worry, the state is taking care of you."  We'd get more helplessness, not less.  What a great way to build a strong society of free, self-reliant people.  Much as I despise socialist Alexandria Ocasio-Cortez, her proposal for "guaranteed jobs" makes more sense. It's a terrible proposal too, but at least it would not subsidize and reward people for being irresponsible, since they'd at least have to go through the motions of working.  (Incidentally, John Stuart Mill argued that "severe and irksome labor" should be the price for accepting welfare for an able-bodied adult.  How bizarre that Comrade Ocasio-Cortez should be closer to the classical liberal position than a Cato senior fellow is.)

5.  Suppose we do get a UBI.  Recall that Cato-ites and many other contemporary libertarians (including Munger) also promote open borders.  If we tax productive people so we can pay unproductive people to hang around, what kind of people will we attract?  A UBI combined with open immigration would be fiscal suicide.  (I note that UBI advocates like to cite Milton Friedman and his negative income tax idea in support.  I never hear them favorably noting his point that free immigration is utterly incompatible with the welfare state.)  Of course, once one accepts the UBI logic, there's no apparent reason why the UBI shouldn't be truly universal and apply to everyone in the world.  Why should something so "arbitrary" as national borders matter?

6. Why aren't libertarians championing abolition of the welfare state, instead of trying to make it better? As long as we have a welfare state, we'll have a massive government that controls people by manipulating their livelihoods.  To be blunt, if you are in favor of the welfare state, you are not a libertarian.  These two things aren't compatible.

Berryhill notes that Chris Hughes (of Facebook), Mark Zuckerberg, and Elon Musk are promoting UBI and helping finance the California experiment.  Musk is practically a recipient of a personal UBI himself, given his government subsidies.  But if these billionaires want to spend their own money on this, that's fine. I do not want to be taxed to pay for their "bright" idea.  The UBI is a terrible idea that is devoid of principle and ignores morality, incentives, and economics.

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