The case for a Universal Basic Income
carthago delenda est.
Civilization is experiencing a great convergence. Automation, globalization, rising economic inequality, protectionism, wage stagnation, political volatility and a rise in populism are all contributing to a changing world in ways that few could have predicted. Millions of people will be forced into financial unsustainability. Political instability will proliferate as economic anxiety results. Debt growth will exceed income growth as wages remain stagnant and countless jobs are rendered obsolete. In the end, the cause of forming a “more perfect Union” as embedded in the Constitution of the United States of America will be undermined once more as our domestic tranquility is tested by the seismic change of an unfolding new world.
It doesn’t have to be this way. We already know, according to a University of Oxford study, that 47 percent of American jobs are at risk of decimation because of automation. This includes factory workers, loan officers, receptionists and information clerks, paralegals and legal assistants, retail salespersons, taxi drivers and chauffeurs, fast food employees, truck drivers, security guards and more. Automation will supplant millions of jobs that have provided financial security to families and individuals alike. The notion of equal opportunity will be made nominal as inequality exacerbates at a time of deep national division.
Above all, the weakest and poorest of citizens will bear the brunt of of the economic and social tolls of new technologies while the wealthiest will continue their comfortable lifestyle free of the worries and concerns of the common man and woman. The Uber driver working a second job part-time who can no longer pay his tuition because of self-driving cars. The receptionist struggling to pay for her children’s textbooks replaced by an AI system. The young cashier at the local fast-food restaurant saving money for college. The middle class, already hurt by globalization gone awry and wages that never change, will only face more pain as the next wave of creative destruction changes the entire economy yet again. The cost of inaction has become too great to pay.
The solution to tomorrow’s predictable problems exists in an idea shared by great thinkers of the past and present including Thomas Paine, Friedrich Hayek, Milton Friedman, Martin Luther King Jr., Napoleon Bonaparte, Elon Musk, President Barack Obama and our own Duke University Professor Michael Munger: the Universal Basic Income (UBI). The UBI is a periodic entitlement payment funded through tax revenue that is not contingent on action or service by the recipient, other than obedience to the law. A UBI would substitute the status quo welfare state with a check and a signature at the bank. The UBI, an idea that generates support from both far-right libertarians and left-wing socialists, is a thoughtful policy option towards what will soon be one of our country’s biggest problems.
Structurally, a UBI will reduce the size of government, improve our status quo welfare system and ensure that our redistributive policies reflect our values of freedom, equality and individualism. Welfare programs at the federal, state and local level cost nearly $1 trillion dollars of government spending in total. The UBI would reduce administrative costs by abolishing each of the 126 federal welfare programs. Each separate set of rules, regulations and inefficient bureaucracies within each welfare program will be eliminated. Professor Matt Zwolinski of the University of San Diego argues, “It would also be good from the perspective of welfare beneficiaries. Actually getting signed up for all the various welfare benefits to which one is entitled is tremendously costly in terms of time, effort and skill at bureaucratic navigation.” Not only will our welfare state reduce the amount of money needed to oversee the welfare state while still increasing its efficiency, but it will also ease the process of acquiring a UBI from those who need it the most.
Morally, a UBI is superior to today’s welfare statism. The question isn’t whether this is an ideal option that will fix everything, but whether it is a relatively better option than doing nothing and leaving what we have in place remain. With a UBI, we should expect a more efficient bureaucracy, a reduction in waste, less rent-seeking and a higher degree of societal stability. The dynamics of a UBI are market friendly, too. As the Austrian economist Friedrich Hayek argued, the provision of services by the state distorts markets and stymies private competition. Accordingly, a UBI would get rid of conditional wealth distribution to all people. Concurrently, a UBI would also reflect our belief in liberty by removing paternalistic elements of the current welfare state by erasing the constraints on purchases dictated by food stamps and ending the condescending preconditions of drug tests and proving that you are looking for a job. The end to patronizing wealth redistribution will incentivize innovation and entrepreneurship as more people feel financially confident to venture on starting a new business. The transition from a coercive market to a free market where people can choose where to work will encourage employers to attract employees with higher pay and more flexible hours. The government has no right dictating how we should spend our money.
Hayek argued in the Constitution of Liberty that a basic income guarantee justifies liberty in our Republic as not only being subject to the absence of the initiation of force, but also free of being subject to the arbitrary will of another person. Our freedom will expand as people are able to leave abusive relationships that only survive because of financial support. Their economic agency will improve as people are able to end employment under authoritarian bosses when they have no savings. Women will achieve a new level of financial independence and autonomy in an environment where they are still shamefully treated as lesser than men. A UBI offers an outlet of escape for citizens who are systematically oppressed and marginalized by an unfair and rigged system that perpetuates economic, social and political inequality.
The future will require concerted multilateral efforts towards solving the world’s most pressing problems that lie ahead: climate change, failed nation-states, international terrorism, disease, nuclear proliferation and space colonization. The institutional instability engendered by further economic inequality will hinder efforts towards solving these monumental problems for both today’s people and future generations.
Political courage and cooperation will be necessary to preserve the hope of societal stability by preventing the carnage that developing economic storms threaten. Finland is already experimenting with a universal basic income. While rejected, Switzerland brought a basic guaranteed income to the national conversation with a referendum vote. The Canadian Province of Ontario’s basic income guarantee for seniors has reduced poverty rates among the elderly by 25 percent, increased longevity and food security, and allowed recipients to spend their money independently of government control. Alaska has a Permanent Fund Dividend that pays its citizens $1,184 each year that has led to lower economic inequality, high approval ratings and one of America’s highest rates of statewide well-being. North Carolina has a basic income guarantee for members of the Eastern Band of Cherokee Indians and has seen a decrease in crime, poverty, behavioral issues in children, the likelihood of developing psychiatric or substance problems and an increase in high school graduation rates among the Native American tribe.
Enough time has been wasted. It is time for the United States of America to lead the world by example once more with the implementation of a universal basic income before it is too late.
John Guarco is a Trinity senior. His column, "carthago delenda est.," usually runs on alternate Wednesdays.