I’m about half an hour into Joe Rogan’s podcast with Andrew Yang, an American presidential hopeful who’s main platform is a universal basic income (UBI). I find discussions of a UBI to be useful and sometimes fun in philosophical terms, but as a policy idea it suffers from fatal flaws which ought to be obvious but for some apparently aren’t. The ZMan points out one, which concerns price inflation:
Imagine the government decides to help BMW sell more cars, so they offer every citizen $5000 if they spend it on a BMW, rather than some other car. BMW is now facing a wave of people coming into American dealerships toting a $5,000 check payable to BMW. The logical thing for BMW to do is raise the price of their low end models by $5000. That way, they don’t increase production costs, but they increase the profit per car. In effect, the floor for entry level buyers was just raised by $5000 by the government.
There’s a pretty good real world example of this. The government decided to do something to help working class people get into college. Since many need remedial help, before taking on college work, the scheme was to offer a subsidy to be used for community colleges. The students would use the money to prep for college then head off to a four year university, presumably using loans and aid at that level. The result, however, was the community colleges just raised their tuition by about 65% of the subsidy.
But I don’t think even economic arguments do the most damage to the idea of a universal basic income. UBI comes from the libertarian fringe of politics and they have a habit of falling into the same trap they frequently accuse communists of: they ignore human nature. The reason welfare programs came into existence a few generations ago is people decided it was immoral for someone to be left to starve or die through illness or bad luck. The reason there are giant, all-encompassing welfare states today is people now think it immoral for anyone to suffer the consequences of their bone-headed actions. Proponents of a UBI think we’re still in some bygone era, rather than an age where couples with no job pump out seven children each and suffer no social opprobrium, even as they moan their taxpayer-funded house is too small.
The idea behind a UBI is it would partially replace other forms of welfare, but the reality is this money would disappear from the hands of the feckless quicker than #MeToo campaigners at the mention of Monica Lewinsky. They’d then be worse off than before and the same people who declared their situation intolerable and campaigned for the original welfare programs would pick right up where they left off. The idea that the society which constructed today’s welfare state would ignore the plight of some idiot who blew his UBI on crack and step over him while he starved in the gutter is ludicrous; the original payments would be restored, and the UBI a handy bonus for professional grifters who fancy a new set of alloys for their E36 M3s.
The fact this doesn’t get acknowledged by proponents of the UBI makes me wonder if they know much about the societies they claim to inhabit. The best that can be said is this makes them indistinguishable from most other politicians.