The idea of a providing a universal basic income (UBI for short) for everyone is currently a “hot” topic in the media and elsewhere. It’s being touted as a possible way of solving the intractable old problem of global poverty and the menacing new problem of massive job losses, as more and more of the work that humans have traditionally done is being taken over by artificial intelligence, robotics, and automation. In fact, machines can often do a job better, and faster, and cheaper. So how does a growing army of unemployed workers, with ever-shrinking job opportunities, earn a living in the 21st century? How can they support themselves and their families?
The appealing idea of providing everyone with an automatic annual income is in fact very old. It has been espoused over the years by the likes of Thomas More, Thomas Paine, Martin Luther King, and the conservative economist Milton Friedman. In theory, this would eliminate the existing tangle of inadequate safety net programs and our vast welfare bureaucracy (even more layoffs!), with a simple, easily administered monthly check for everyone. And it would (supposedly) be free of the stigma of charity because everyone would be included.
It seems this idea has some “momentum” – as Peter S. Goodman puts it is a recent New York Times article on the subject. Enthusiastic backers in various countries – including the United States, Canada, the Netherlands, Spain, and Kenya — have undertaken privately financed, small-scale experiments. All it takes is money, so it seems.
For starters, no country could afford it for very long at an income level that would provide for even the bare minimum of subsistence. Goodman notes that in the U.S., for example, the price tag even for a $10,000 annual income for everyone (quite inadequate in high-cost areas of this country) would be $3 trillion a year (about one-sixth of our total GDP!).
A second objection, often brushed aside, is that most people do not want hand-outs. They want meaningful work – a living that is “earned.” A few of us would gladly choose a life devoted to surfing or landscape painting, but most of us are quite satisfied to treat these as hobbies and do something that is socially useful. A further objection is that it would be enormously wasteful of our financial resources, because it is not targeted to meeting basic needs but would also go into the pockets of many millions of our citizens with higher incomes, where the benefits would be marginal at best.
Perhaps the most serious shortcoming, however, is that it ignores the fact that the satisfaction of our basic needs depends upon a vast “infrastructure” of goods and services – fresh water systems, sewer systems, electrical power grids, mass transit systems, education systems, health care systems, not to mention policemen, firemen, our judicial system, and all the rest. These vital institutions could no longer be sustained by a vast army of people living in deep poverty and a shriveled tax base that has also lost the fortunate few at the top who are using tax havens to avoid paying taxes. As the saying goes, get real! Indeed, it would still require an expensive bureaucracy to ensure that recipients are not double-dipping, or collecting for long-dead relatives, or incarcerated.
A feasible alternative to this radical and ultimately unworkable idea is a very old idea that should be revived and seriously re-considered. In the original version of the landmark Employment Act of 1946, which codified a continuing Federal government responsibility “to foster and promote free competitive enterprise and the general welfare” and which (among other things) established the President’s Council of Economic Advisors, there was also a charge for the government to ensure “full employment.” Some of President Roosevelt’s, New Deal programs during the Great Depression in the 1930s – like the Works Progress Administration and the Civilian Conservation Corps – provided highly successful precedents for the idea of the government as a “last-resort” employer. However, a conservative majority in the Congress after the war opposed the idea, for various reasons. Many of those reasons were not valid even then, and they are even less valid now. Equally important, the societal benefits could be huge – in many different ways. (This is a subject for a future essay.)
Perhaps most important, a national employment program would conform to the fundamental fairness principle of reciprocity. Charity can be taken away at will; reciprocity honors our implicit social contract and is more binding. It is also far more likely to find a political sweet spot and a path forward in this divisive era.
