5 Bad Progressive Takes on Universal Basic Income

1. Cherry-picking bad people who like some version of UBI

When those with a history of bad ideas propose something, it’s reasonable to assume their new idea is also bad. In a pinch, the messenger of an idea serves as an analytical shortcut.

So when bad idea havers—Charles Murray, Milton Freedom, Nixon, Generic Rich Tech Bros—endorse a form of universal basic income, it’s fair to wonder if UBI might also be bad.

But what if a concept endorsed by bad idea havers is also endorsed by good idea havers? Suddenly the messenger shortcut is no longer useful.

In the case of UBI, you can find support among the AFL-CIO’s Chief Economist Dr. William Springs, the United Kingdom Trades Union, Margaret Mead, Henry George, John Kenneth Galbraith, Bertrand Russell, Thomas Paine, Virginia Woolf, Martin Luther King Jr., and the Movement for Black Lives. These people tend to have good ideas, they support UBI, so ... ?

A full and fair account of supporters and opposers would probably reflect well on UBI, but the time needed to do such an account is better spent analyzing the concept itself.

2. Misdiagnosing who’s in poverty and in the labor market

One of the upshots of giving all citizens a basic income is that those in need of money...get more money. If lawmakers set the UBI payment high enough, all citizens would be guaranteed enough money to be officially above the poverty line, whatever happens.

Some progressive critics often respond: this is the wrong way to lift people out of poverty. Better, they argue, to lift people by helping them get to work in the labor market. Better still, that work should come with union contracts, minimum wages, and federal job guarantees.

These are all great ideas (maybe not the federal job guarantee). Anchoring an entire political economy around the needs of workers is critical to the health of any society. But all of us, at some points in our lives, shouldn’t or can’t participate in the labor market. Children, students, people with disabilities, retirees, and family caregivers make up about a half of society at any given time. Few of them should or can work, much less for the time needed to earn above-poverty wages. Indeed, at any given time, only about half of the population of rich countries are working:

(Graph from Matt Bruenig at People’s Policy Project

Ignoring these non-workers’ position in the economy causes analytical blind spots. Linking the financial fate of everyone to the labor market results in bad policies that categorize millions as second-class citizens, and leaving them and their dependents at risk from financial shocks.

Valorizing the role of work can also lead to logical contradictions. Take the common claim that working for wages in the market economy gives individuals meaning to their lives. Now take the common fear that by giving people a fat UBI check, people will stop working. Taken together, that leads to the following logic: ‘Work gives people critical value that can’t be measured with money, which is why most people will stop working with a UBI check.’ This logic makes one wonder: if work has this intrinsic value to people, why would they volunteer to stop?

In fact, most available evidence suggests that UBI doesn’t reduce the propensity to work.

3. Forgetting the financing half of the UBI equation

From a public accounting perspective, implementing a universal basic income above the poverty line would be expensive. To start, the government would have to do some combination of raising taxes or buying up shares of profitable financial assets. Whether you think this is a feature or a bug of UBI says a lot about how you view the political economy, but it’s one half of what makes up UBI, so forgetting it when analyzing the merits of UBI is an error.

For example, a common anti-UBI critique from self-identified progressives targets the concept’s very universality. That is, ‘why should Bill Gates get a UBI check?’

Such a critique only lands when dodging the financing part. Funding a UBI program would require a lot of money, and who owns most of the money in America? The uber-wealthy! While Bill Gates would receive a UBI check, his taxes would go up much more, leaving him—on net—much poorer. Or if the UBI revenue doesn’t just come from taxes, but also from a social wealth fund, then Bill Gates’ claims on future stock dividends would go down much more than he’d receive from future UBI checks.

This is the same logic for why universal public education or universal retirement insurance (SS+Medicare) programs avoid attacks as giveaways to the rich: the revenue taken to fund universal programs mean that—overall—universality outperforms means-testing in reducing inequality.

If you’re concerned about the massive and growing levels of economic and political inequality in the US, then the expensive price of UBI serves a critical function of leveling the economy. Simply put, the universal tax-and-transfer nature of UBI would lead to a drastic redistribution of income from the few to the many.

4. Lacking a political economy perspective

Typically, public policy debates focus entirely on economic outcomes or entirely on political possibilities (or sneakily switch between economic or political concerns when needed). These perspectives miss that public policy structures all of society, and therefore should be analyzed from this structural lens.

When viewed this way, UBI has many appealing qualities beyond just efficiently enriching the needy. 

First, and as stated earlier, raising the funds needed for UBI would help empty the bank accounts of the mega-rich, who as a class drain from society. This upper class lays claim to most of the country’s income and wealth, with no moral justification for such claims. They use that money to give their friends and family unfair advantages when competing over society’s scarce resources, entrenching their privileged position and acting as gatekeepers to much of a country’s goods.

They further use that money to influence politicians and regulators, enriching and protecting their class even more (see: 2017 GOP tax cuts and all of human history). With their control of corporate boards and overall power in society, they buy out potential competition, capture productivity gains from workers, and shift the environmental costs of their enterprise onto the rest of us.

Taxing some of their money and taking control over some of their assets to fund a UBI would leave them much poorer and weaker, though still rich. Their quality of life would simply be closer to everyone else’s. All of which is necessary to heal the society they plundered. It's also probably healthy for their souls.

UBI also transfers bargaining power from bosses to workers. Basic income does so by acting as the world’s greatest strike fund, guaranteeing all workers that no matter the consequences from standing up to their bosses, they can always rely on a UBI payment. Bosses using implicit and explicit threats to stop workers from organizing is one of their core tactics in exploiting workers. A society where bosses are no longer the only reliable source for income (and health insurance) is a society where workers can have the secure foundation needed to truly bargain with management.

Finally, the long term public support of any policy proposal matters for its overall efficacy. Compared to means-testing, universal social programs are easier to sell, to design, and to implement. By their nature, they cover a much broader portion of society. These features of universality lead to more efficient performance and more robust public support. For example, Obamacare's shaky design leaves it vulnerable to political, legal, legislative, and regulatory attacks. Medicare, by contrast, sits on a much more stable base. Simply put, universal programs are a much stronger foundation for society than a patchwork of means-tested, public-private plans.

5. False choices and impossible standards

Debates about public policy often resemble March Madness-style brackets, where one policy idea is pitted against another. UBI vs. a federal job guarantee is a popular example (among the types of people who debate these sorts of things—i.e. very cool people). Stick around long enough and you’re likely to come across a claim that instead of doing UBI, we should provide social housing, improve our existing social programs, or that we should instead focus on ending capitalism.

Comparing and contrasting different policy ideas isn’t a bad thing. Such exercises can illuminate the goals, mechanics, faults, and possibilities of a policy, and how a policy might mesh with a larger political agenda. Beyond that however, there’s no reason to force a zero-sum choice between UBI and any other idea.

UBI, like other policy concepts, exists in various forms. To simplify, think of policies existing along a 2D spectrum, where at one end are broad policy concepts and at the other end are specific pieces of legislation. Somewhere in the middle of the spectrum are policy ideas within campaign platforms. For example, there’s “universal health care” and H.R. 676 in the U.S. House of Representatives. They both represent the policy idea of universal health care, but one is a broad principle and the other is actual legislation that can be voted on and converted into law.

When working with specific legislation, policy ideas often do compete in a zero-sum contest against other ideas. Legislators have to decide which ideas should go first in the process, get the most attention, and need the most help. There’s limited time, energy, and “political capital” for moving bills through the legislative process and into law. Such limits, even though they’re not immutable laws of physics, do constrain possibilities and force hard choices. Just think of all the problems a responsible political party in power would need to focus on: climate change, health care, poverty, worker rights, women’s rights, immigration rights, civil rights, family care, housing, and on and on and on. It’s a long list and prioritizing it matters.

In the case of UBI, a low slot on that list of policy priorities doesn’t mean UBI is a bad idea. And prioritizing policies is only needed in specific situations like legislative planning, not bigger debates about principles and goals. By limiting the debate to imaginary choices, critics dodge having to engage much of the substantive arguments from UBI supporters.

A similar limiting tactic is to construct UBI into a specific form to prove it’s bad. For example, some progressives argue we shouldn’t pursue UBI because it would dismantle the existing welfare state, which is good and whose existence wrests on a history of hard-fought battles. But only one form of UBI aims to dismantle the welfare state and reduce welfare assistance to its minimal, cheapest form—the libertarian UBI.

Another way to dismiss UBI is to deal only with its final, maximalist form—as proof of its political infeasibility. So—the argument goes—progressive shouldn’t pursue UBI because such a change is far too radical for our work-loving and work-dependent culture. In other words, the path to UBI is a dead-end.

But UBI, if thought of as a broader policy concept rather than a specific piece of legislation, can exist in an incremental form, slowly and possibly never reaching its idealized form. If UBI makes sense, but can’t happen all at once, then a legislative strategy of expanding Social Security insurance, reforming the Earned-Income Tax Credit, and enacting a universal child allowance also makes sense. That is, deciding to go down the path of UBI will do tremendous good even if we never get to the destination. But the case needs to be made that it's a path worth traveling.

What all this means is that UBI can be a good idea while being of lesser priority than other progressive policy goals. UBI can be a good idea while requiring an incremental, piecemeal approach that approximates and never fully reaches its ideal form. UBI can be a good idea without being able to solve all problems in society. In short, policy concepts aren’t in zero-sum competition with one another, no policy is omnipotent, and in the hands of bad actors, all sensible ideas can be transmuted for nefarious goals.


The Limits of Keynesian Capitalism

A favorite writer of mine, John Aziz (@azizonomics), said he believed in “luxury robot Keynesian capitalism” as a response to me saying I believe in “luxury robot communism.” Compared to the status quo, luxury robot Keynesian capitalism sounds great. But can we do better? (Let’s focus on the “Keynesian capitalism” part, as the “luxury robot” part doesn’t need a defense.)

Keynesian capitalism vs. non-Keynesian capitalism

As I understand it, Keynesianism is a form of capitalism where the government acts as the economic manager, deploying fiscal and monetary policy to smooth the boom-n-bust cycle. Mismanaged business cycles, over the long run, lead to a poorer, less efficient economy—and a lot of human suffering.

In Keynesianism, the government’s main role as economic managers is balancing the aggregate amount of demand over time. Too little demand leads to less spending which leads to less income for others, which in turn amplifies the problem of deficient demand. Without the government giving money to those in need, demand craters and can fall to a “liquidity trap” and endless depression. Similarly, too much demand can lead to runaway inflation, wrecking budgets and plans to invest for families, businesses, and banks.

For the most part, capital owners support policy that promotes low and stable inflation. That’s because such policies require government spending, and the money supply, to grow slowly—if at all. Combined, both policies benefit those that own lots of money and especially those who lend out their money in exchange for getting paid interest. 

So when demand and inflation get too high, such as the 1970s, capitalists support the government’s fixes of macroeconomic problems.

But what about when demand drops too low? In such times, Keynesianism promotes policies that—if successful—increase inflation: balloon the supply of money and the amount of spending. A welfare regime helps as “automatic stabilizers”: when a mass of workers lose their jobs and risk throwing the economy into a tailspin, they can instead receive welfare (say, unemployment insurance) and continue spending money on stuff that others take as income. 

Overall—sounds great! A capitalist economy constrained and guided by a government to repress its most damaging traits. Why would we need something more?

The answer is power and the way it’s distributed in capitalist countries.

Free markets are always threatened by owners of capital

I earlier mentioned capital owners support one half of Keynesianism—the half used when demand gets too high. While they favor this half, they fight the other half—the one used when demand dips too low.

High taxes must exist to build up a robust welfare state, which must exist to automatically stabilize the economy. Aggressive monetary policy and jobs programs create and match work for workers, but such policies inflate away future debt payments to lenders and weaken bargaining power for managers and owners, at the same time their taxes are high. As such, these policies become targets.

Capital owners have a rap sheet where they undermine government regimes that have progressive taxes, pro-worker labor market programs, and a monetary policy where employment and prices are mandated as equal goals.
source: data from Piketty, Saez, Zucman (2016); Graph from Matt Bruenig

Capitalists also tend to be a small bunch (see graph above). Their ownership begets disproportionate power, which they wield to mold markets and government. Capitalists use their resources to buy and block competitors, giving them enough leverage to set prices and wages. They can push politicians around to favorably tilt the economy, including by undermining Keynesian policies. They can threaten to “Go Galt” and exit the economy until they get what they seek. In fact, this describes well the trends since the 1970s:

source: data from Piketty 2014; Graph from New Yorker

The way out requires disempowering capital owners to the point where their share of power equals their share of the population—at which point the ownership of capital becomes democratized. I.e. not capitalism. 

Democratization of capital for the win

Once capital becomes democratically owned, its profits can be universally distributed—building a foundation of health care, family care, housing, food, education, and basic income. Such a regime—combined with other civil, political, and economic rights—would maximize everyone’s freedom to the participate on fair terms in markets, politics, and society. 



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