Economy, Regs, & Taxes

Something for Nothing

What is universal basic income?

Arnold Ahlert · Jun. 13, 2016

By now, most Americans are familiar with mainstreaming, as in the effort to promote certain agendas professed to be cutting edge. Two recent efforts have been the elevation of gender identity in lieu of biological and chromosomal reality, and the elimination of cash for “convenience” sake — as opposed to giving central banks the opportunity to impose negative interest rates with impunity. The latest effort to turn society upside down? A universal basic income (UBI) guaranteeing every American a lifetime stipend, whether they work or not.

American Enterprise Institute scholar Charles Murray is one of its chief champions, arguing that a UBI is the best way to cope with a “radically changing” job market, one in which “entire trades and professions will be mere shadows of what they once were,” he writes. “I’m familiar with the retort: People have been worried about technology destroying jobs since the Luddites, and they have always been wrong. But the case for ‘this time is different’ has a lot going for it,” he declares.

The difference to which he refers is the rise of robotics and artificial intelligence that will render human workers obsolete. Murray cites two possible levels of human job loss: a study by the Organization for Economic Cooperation and Development indicating 9% of American jobs are at risk, and one by two Oxford scholars who insist that a whopping 47% of American jobs might be lost to technological advances.

Murray includes two caveats in his scheme, the first of which is likely to resonate with those who despise fiscally irresponsible government. He asserts the success of UBI hinges on it completely replacing current transfer payments, and the bureaucracies that administer them. These transfer payments, he explains, include “Social Security, Medicare, Medicaid, food stamps, Supplemental Security Income, housing subsidies, welfare for single women and every other kind of welfare and social-services program, as well as agricultural subsidies and corporate welfare.”

Second, the UBI must contain key features. In Murray’s version they include an annual stipend of $13,000 beginning at age 21, $3,000 of which must be used to pay for health care, leaving people with $10,000 to use however they please. He also envisions a gradual lowering of that stipend once people earn $30,000 per year, with a bottom end total of $6,500 once someone reaches $60,000 of earned income. The total payment never goes any lower because people need to be compensated for losing social Security, Medicare and Medicaid.

Murray acknowledges the two proverbial elephants in the room, as in people idling away their lives, and the cost of the program. But he insists substantial numbers of Americans are already “living off other people’s money,” and that by 2020 his program would be nearly a trillion dollars cheaper than maintaining the status quo.

John Daniel Davidson further insists it would root corruption out of the system, breaking up “the special interests and government-backed cartels” that administer the current welfare regime. Entities with a vested interest in milking the system as much as possible.

Another ostensible upside cited by Murray and echoed by Fortune Magazine’s Kevin O'Marah is the idea that freeing people up from the vicissitudes associated with earning a living will engender an outpouring of volunteerism and social organizations, or as O'Marah contends, “the freedom to realize our personal best.”

Murray further envisions far-reaching social transformation engendered by the “known presence of an income stream” that would “paradoxically” impose personal responsibilities on people who currently avoid them due to a lack of money. They include men who currently abandon child support, single mothers forced to live at home to makes ends meet, or the unemployed guy living with his girlfriend who would now have to pay a portion of the rent or get the boot. “A UBI would present the most disadvantaged among us with an open road to the middle class if they put their minds to it,” Murray insists.

And therein lies the rub. Putting one’s mind to something is not, nor has it ever been, an innate part of human nature. As economist Thomas Sowell astutely notes, “[T]he massive expansion of the welfare state since the 1960s has been accompanied by a vast expansion in the amount of crime, violence, drug addiction, fatherless children and other signs of social degeneration.” He further explains that regardless of intentions, envy will never be alleviated. “If we are all ‘entitled’ to benefits, just by being present, why are some entitled to so little while others have so much?” he asks.

There are practical flaws as well. Switzerland just rejected a UBI by a 77% to 23% margin, because they feared their nation would become a magnet for immigrants.

Columnist Robert Tracinski illuminates additional flaws: “The central problem is not just the obvious: if income is separated from work, there is little or no incentive for anyone to do any work. It’s actually worse than that. The deeper problem is an actual punishment for working.” He brings a critical moral component to the table as well, noting the current welfare state, despite all its flawed mechanics, remains based on the idea that getting a government payout absent any quid pro quo “should be an exception, a response to some special emergency.”

Like our current welfare state, the fundamental misunderstanding that informs a UBI is the idea that the virtual elimination of such emergencies will engender a kind of moral renaissance where a majority of people will embrace their “better angels” and lead productive lives. Human nature itself suggests exactly the opposite: the overwhelming majority of people travel the so-called “path of least resistance.”

In other words, ambition, integrity and industriousness are not innate components of the human condition. They must be learned, and nothing informs learning quite like necessity. Necessity Plato dubbed the “mother of invention” more than two thousand years ago.

Nonetheless, the social engineers among us have convinced themselves human nature is infinitely pliable. The remarkable similarities found in the plethora of religious, philosophical and intellectual information spanning a millennia, and informing every culture the world has ever known, suggests otherwise.

A UBI is essentially something for nothing. As such it is completely antithetical to the development of one’s “personal best.”

“The track record of divorcing personal rewards from personal contributions hardly justifies more of the same, even when it is in a more sophisticated form,” Sowell warns. “Sophisticated social disaster is still disaster — and we already have too much of that.”

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