The Moneylender and his Wife by Quinten Massijs (detail)
This weekend, on the BART ride to San Francisco and on the walk to and from my destination there, I listened to this fascinating debate on Intelligence Squared U.S.: The Universal Basic Income Is The Safety Net Of The Future. (It’s also available as a podcast.) It was so thought-provoking that my walk turned into a rather long one, as I stopped every few blocks to sit down and scribble some notes in response to what I heard.
The debaters in favor of the motion are the libertarian political scientist Charles Murray, infamous in many circles for co-authoring The Bell Curve, and labor leader Andrew Stern. These two make surprising debate partners, but of course, that’s part of the fun!
The debaters against the motion are Jared Bernstein and Jason Furman, both economic advisors to the Obama administration, and both more on the liberal / progressive end of the economic spectrum, which also adds to the interesting contrasts between audience expectations and the arguments made.
Here’s the summary of the debate from the IQ2 website:
Imagine getting a check from the government every month. $600 guaranteed. It’s happening in Finland, where a pilot program is being launched to test what’s known as a “universal basic income.” As technology transforms the workplace, jobs and income will become less reliable. The idea is that a universal basic income could serve as a tool to combat poverty and uncertainty in a changing society, and provide a cushion that empowers workers, giving them latitude to take risks in the job market. But some argue a guaranteed income would take away the incentive to work, waste money on those who don’t need it, and come at the expense of effective programs like Social Security, Medicare and Medicaid. Is the universal basic income the safety net of the future?
I’ve written about basic income before in light of Thomas Paine’s case for a social welfare system, broadly distributed to the point that we’d call it basic income today, in his pamphlet Agrarian Justice of 1796. I’m broadly sympathetic to the case for basic income especially insofar as I’m convinced by two of his major arguments.
One, Paine argues that the right to private property is not an intrinsic right or derived from nature, or even from moral convictions about deservingness or our duties toward those less fortunate. Rather, property rights are artificial rights we’ve created for efficiency’s sake: it’s a way to incentivize people to be as productive as possible to the benefit of both individual and society. But whatever efficiencies property rights promote, Paine observes just as we observe now, they too often deprive people of the very thing they promise to provide. Economies based on property rights deny most people direct access to the world’s natural resources while sometimes failing to reward them proportionally.
This is true not only of those who produce the most necessary, useful goods and services such as growing and preparing food, building and maintaining our cities, towns, and homes, and caring for the disabled and sick; they are often the ones who receive the lowest wages. In the meantime, others who create such frivolous and even arguably harmful things as casinos, violent video games, and poor quality trinkets that become trash almost as soon as they’re made can often make money hand over fist. Some people are not able to make money even if they were willing: they may be disabled or aged, or the skilled work they’ve done all their lives becomes obsolete. Worst of all, those who raise children, care for the disabled and aged, and otherwise keep the home generally receive no pay, though their work benefits society most of all. The amount of money we can bring in generally determines the resources we have access to, so if we have no money, we have no property. Property rights, then, guarantee us the right to property without any consideration as to whether or not we actually end up be able to obtain or keep any. Therefore, Paine argues, we owe every person compensation for denying them their natural right to equal access to the world’s resources.
Two, Paine argues that a universal income is better than discretionary welfare, such as that based solely on need, because it prevents the inevitable jealousies and complaints of unfairness that can erode social cohesion and undermine mutual trust. If everyone starts out at the same basic level, we may not have all of the same chances in life just as we don’t now, advantages or disadvantages that we can’t do much about: we may have rich parents, poor parents, or none at all; we may be able-bodied or we may not; we may be beautiful, smart, or have other attributes that society rewards. But, we’ll all have the same basic chance that we can give one another: the freedom and well-being guaranteed by a basic level of economic security.
But back to the debate…. Why this digression, you might ask? I return to Paine because he makes the first sustained modern argument (that I’m aware of) in favor of a basic income and because his basic points, or closely related ones, are brought up throughout this debate. In the question and answer session, Andrew Stern refers to the way perceived unfairness, such as Paine discusses, has long politically undermined need-based programs, from publicly-funded unemployment benefits to health care insurance for those with low income. Stern also points out that many people already enjoy ‘undeserved’ basic income, such as those born to parents who can afford to provide it. If we have no problem with those people reaping the benefits of work they didn’t do, why not everyone? Charles Murray adds the element of personal responsibility to the question of perceived unfairness of needs-based welfare. If everyone were given the same basic level of resources, people could no longer justly claim victimhood for not having the same chances as everyone else. If we collectively provide the same benefits to everyone, we can hold people to a basic equal accountability for all who could work and contribute more than they do.
Murray, as you may guess from his emphasis on opportunities for traditional marriage and the preeminence of personal responsibility, is much more conservative than the other participants in the debate, and introduces a free market argument that many political conservatives might like just as well as pro-labor liberals and progressives. This argument is founded on the importance of competition in a well-functioning economy. To harness the benefits of competition, Murray proposes that if people have ‘walking – away’ money, employers will have to compete with one another for employees, and in doing so, they will have to innovate to make jobs appealing. Employers would have to offer good wages, provide a pleasant and safe working environment, and make the work seem meaningful and appreciated. This is a sort of competition that serves drives wages, standards, and productivity up, not sending wages and working conditions spiraling in the race to the bottom that so many unregulated job markets, mostly competing to lower prices, have exhibited throughout the history of capitalism.
Jared Bernstein repeats the argument throughout the debate, like a mantra, that a dollar given to someone that doesn’t need it is a dollar taken away from someone that does. Many in the audience seem to find this argument convincing, but I don’t, at least without much more justification than he provides. For one thing, neither Bernstein nor his debate partner Jason Furman addresses the vast expenditures of time and money of a bureaucracy required to administer large-scale need-based welfare. It’s expensive for government as well as for individuals, who are required to provide proofs of their need, which is multi-dimensional and subjective and therefore difficult and time-consuming to demonstrate. (Murray does address problems with this kind of bureaucracy, but he emphasizes its unpleasantness and the way it re-introduces a form of serfdom, creating a class of people whose freedom is limited by this system.) For another thing, neither Bernstein nor Furman directly addresses the fact that universal basic income would vastly expand the number of people with disposable income for the first time, much more vastly than needs-based programs do. Most of this money, in turn, would go straight back into the economy, rather than into the ever-inflating bank accounts of the ever-fewer, ever-wealthier wealthiest individuals who are now gobbling up an ever-larger share of the economic pie. Our targeted redistribution system has been entirely unable to resolve this inefficiency, and in fact, may exacerbate it.
The side arguing in favor of the motion, which, as I’ve already mentioned, I’m more sympathetic to for aforementioned reasons, does not, in the end, convince the audience. They’re handily defeated, as the side arguing against the motion not only convinces most of the undecided but also wins over some of the basic income supporters. I suspect that Murray hurts his side a bit by spending too much time on arguments that I think are beside the point, such as whether more people could afford to get married (it doesn’t have to be expensive!) and on very subtle, not-very-well expressed arguments that were lost among the rest. But I would like to hear another major debate in which basic income is supported by stronger arguments, more convincing answers to objections, and most of all, better evidence. As Stern points out, there are small-scale and short-term experiments in basic income happening all over, in Alaska, Finland, and Toronto, for example, but the results are not in yet. I agree that such a major social program should be rolled out with some caution, given the potential fallout from unforeseen as well as foreseen potential side effects. But perhaps smaller experiments can’t reveal the benefits that a complete reinvention of a large economy would reveal, especially if effectiveness is entirely a matter of scale. For example, such a well-balanced, sturdy, and beautifully functioning thing as a termite mound couldn’t happen without an incredibly large number of factors contributing, namely the weather, millions of termites, many square miles of dirt, and so on. If you took a small pile of dirt and a small number of termites, a well-functioning termite mound would not result.
Our American re-invention of government was another such experiment founded on the idea that people can govern themselves and on the ideal of universal human rights (the ideal, mind you, not yet the reality). Many societies before and for some time since had tried to correct abuses and oppressions with one reform here, one reform there, or with a wholesale chaotic and violent overthrow after societal cohesion had already collapsed through famine and extreme corruption (such as, famously, the French Revolution). But it took a large number of fair-minded people to come together and lay the foundation for an entirely new system of government based on the ideal that all human beings have the right to life, liberty, and the pursuit of happiness, or as John Locke originally formulated it, life, liberty, and property. Or in the case of universal basic income, to actual property.
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Sources and Inspiration:
“Labor Theory of Property.” Wikipedia, The Free Encyclopedia
Locke, John. Two Treatises of Government, 1689
Paine, Thomas. Agrarian Justice, 1796.
Paine, Thomas. The Rights of Man, 1791.
The Universal Basic Income Is The Safety Net Of The Future. Intelligence Squared U.S. Debate, March 22, 2017
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