The Corner

Economy & Business

UBI: I Like the Idea but I Can’t Fully Support It Either

In response to Top 10 Reasons to Come On Nr’S “Post-Election” Cruise

Both Michael Strain and Ian Murray have expressed their views about the Universal Basic Income. Like Ian, I like the idea of a UBI. Many libertarians do and have in the past. We shouldn’t forget that before Charles Murray wrote his great book In Our Hands where he argued for an unconditional $10,000 annual cash payment to all adult Americans, coupled with a repeal of all other welfare transfer programs — many libertarian giants such as as Milton Friedman, Friedrich Hayek, and even James Buchanan had praised the idea.

Indeed, in a world where government already redistributes income, with all of the inefficiency that comes with overlapping bureaucracies, and the inability to take care of those who are truly destitute, the idea of direct cash payments has an intuitive appeal because of its comparative simplicity and fairness. It is certainly preferable to the current system.

Welfare programs are demeaning by design, because they dictate to poor people what they must spend on food, housing, or health care, rather than letting them make those trade-offs themselves. The government even dictates what food poor people may or may not buy with food stamps. The libertarian interest in a basic income proceeds not simply — or even mostly — from the desire to make government smaller and more cost-efficient. It is unclear how much UBI does that. It stems from a belief that all individuals have the capacity to promote their own interests, and in fact are better able to make decisions about their lives than anyone else. And as Ian noted, we are right to trust them.

It also proceeds from the belief that people should refrain from telling others what to do and not to do with their lives and money as long as they don’t bother anyone else. In that sense, UBI offers a possibility that maybe just maybe, we could restrain people’s natural and annoying paternalistic instincts, since everyone is getting the same amount of money and everyone is getting something from everyone else.

I do agree with Michael and Ian that UBI takes money from some who work to redistribute to people who as a result will decide not to work or will decide to work less as a result. However, if we are going to have something resembling a welfare program, this is not as big a deal breaker to me as it is for Michael since this redistribution exists with most welfare programs, including with conservatives’ darling program the Earned Income Tax Credit. Don’t get me wrong, I don’t like it. But the real question is whether UBI is really worse than the current system taken as a whole (not UBI compared to EITC or UBI compared to the minimum wage).

But here is where my support ends. Without a strong guarantee that all anti-poverty measures would be terminated and that they won’t be able to be brought back to life later, I simply can’t support it. UBI schemes are expensive, which is okay if we decide that this is where we are going to spend money on welfare — but it is only okay if that’s where it ends. But it won’t. Politicians will always find ways to argue for targeted welfare programs: “Michael’s wife is healthy, I am not, it’s unfair, give me more,” or “it’s more expensive to live in San Francisco than in Sacramento, it’s unfair, give me more based on where I live,” or “I have children, she doesn’t, it’s unfair, give me more based on the number of kids I have.”

Any violation of the generality principle (i.e., a rule that applies to all in the same manner) negates the benefits of UBI, including its simplicity.

I will conclude by saying that even if we find ways to forever tie the hands of special interests and politicians, UBI is only an improvement over the current system. Let’s not lose sight of the fact that restoring civil society would go an even longer way to address many poverty issues that subsist today. As I wrote a few years ago on this issue:

But more importantly, as economists Peter Boettke of George Mason University and Adam G. Martin of Kings College in London remind us in a recent paper, libertarians shouldn’t forget that “the most robust protection against poverty comes from institutions that generate a harmony of interests rather than those that foment distributional conflicts.” A guaranteed income may or may not be an improvement over the current state of affairs, but a massive transfer and regulatory state harms the poor either way.

It means that reforming the welfare state should be paired with measures to free civil society from the constraints of government and special interests.

I recommend reading this piece if you are interested in civil society and why restoring it is important.

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

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