Economy & Business

‘When All Men Are Paid for Existing’: Universal Basic Income Has Arrived

(Pixabay)
Such an expansion of the welfare state would have once kept conservatives awake at night.

Amid all the momentous events that have defined the coronavirus pandemic, the decision by both the Trump administration and, in near-unanimous votes, both houses of Congress to institute a “stimulus” program — an element of which amounts to a de facto universal basic income (UBI) — is perhaps the least appreciated.

Paying individuals a flat check of $1,200, is, effectively, a one-time UBI. Legislators are already considering a second round.

The long-term import of this is significant. At a time when the two parties can agree on almost nothing, they came together to support a policy that up until recently was restricted largely (but certainly not exclusively) to the Silicon Valley Left.

Watching this go through brought to mind Rudyard Kipling’s 1919 poem “The Gods of the Copybook Headings.” Kipling contrasts the Gods of the Marketplace, meaning the socially acceptable wishful thinking, with the Gods of the Copybook Headings, who remind us of the eternal truths we routinely abandon for a more fashionable pantheon. He concludes with these lines:

And that after this is accomplished, and the brave new world begins
When all men are paid for existing and no man must pay for his sins,
As surely as Water will wet us, as surely as Fire will burn,
The Gods of the Copybook Headings with terror and slaughter return!

Sound familiar? In a few short months, we went from UBI (the idea of giving almost every adult citizen a check) being an idea favored only at the margins to its being the official policy of a Republican administration backed by a Republican-controlled Senate.

The counterargument is clear. These are extreme times. This is not UBI but merely a temporary support measure for working families in exceptional circumstances. It is an argument that might have more force had not conservative political parties in the Western world found it so difficult to rein in an expanding welfare state that can no longer be afforded, something that became all too obvious in the battles over “austerity” after the European debt crisis.

Since America’s current “UBI” was promoted as an essential element in a stimulus program, it seems reasonable to assume that, whatever is being said to the contrary, it will be more difficult to end it until the economy gets strong enough to no longer need stimulus. The list of temporary spending programs instituted during a crisis but later discontinued is distressingly short.

Fearing the electoral consequences of challenging this regime, many conservative parties of the Western world seem to have given up on the task of decreasing the size of government. In the United Kingdom, Prime Minister Boris Johnson’s Conservative Party has made protecting the U.K.’s public health-care system one of the cornerstones of his government.

The Trump administration has signed relief plans totaling over $2 trillion, in an environment where were already spending $4.45 trillion a year. The small-government that once defined conservative politics appears to have fallen out of fashion.

“UBI” programs such as the individual $1,200 checks are simply the next step in the evolution of the welfare state. The preexisting welfare systems (whatever their faults) are designed to act as safety nets, but the checks in this case are universal — they go to people who haven’t fallen into the safety net as well as to those who have. It isn’t an unemployment benefit, federal jobs guarantee, work-for-welfare regime, or any other welfare system. Those at least maintain the pretense of encouraging the recipient to be self-reliant.

An expansion of the welfare state of the type represented by these checks would have once kept conservatives awake at night. But we’d put our emphasis on the “used to,” as conservative parties have been on their current path for years; it just took an excuse, provided now by the pandemic and accompanying shutdowns, to push them off the cliff. We might look back on the societal consequences of the pandemic not as revolutionary but as acceleratory.

Unfortunately, we have been doing the bidding of Kipling’s Gods of the Marketplace for quite some time now, by acting as though we can infinitely expand the federal government and suffer no consequences. Had the Western world not abused monetary and fiscal policy during our past crises and recoveries, we would have had more margin, more room for error in dealing with this one. But we treated peacetime like wartime, and now that a true war is here, we find our swords are dull.

The United States is straining against the limits of sound policy and relying on the credulity of bond investors after decades of growth of the federal government in a way and to a size that now threatens our fiscal stability. Even if this first draft of UBI does not last past the pandemic, the Trump administration has normalized the practice of giving every American a check solely for existing. Don’t be surprised if 2022 and 2024 feature politicians far more prominent than former Democratic presidential candidate Andrew Yang running campaigns on Universal Basic Income.

If a Republican president can do it, why not a Democratic one?

A pandemic should prompt some introspection, if nothing else. While it is far from clear how things will turn out and how severe the consequences of our policies will be, the coronavirus and its repercussions have demonstrated once again that we are not invincible. The laws of economics are not suspended just because there’s a crisis.

Jerry Bowyer is the president of Bowyer Research and editor of Townhall Finance. Charles Bowyer is a risk analyst for Bowyer Research and a writer for Townhall Finance.

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