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A public policy blog from AEI
Cutting every citizen a monthly check, regardless of whether they work, is no longer as radical an idea as it once seemed. Some form of government-ensured universal basic income — or UBI, as it is more commonly known — is now embraced by some libertarians, futurists, and (of course) socialists. But that’s not to say UBI has grown uncontroversial. It has, however, grown more politically feasible, as the Overton window continues to widen.
To discuss UBI — it’s history, its track record, and its future — I was joined by Annie Lowrey, a contributing editor for The Atlantic magazine, a former economics writer for the New York Times, and author of the new book “Give People Money: How a Universal Basic Income Would End Poverty, Revolutionize Work, and Remake the World.”
What follows is a lightly-edited transcript of our conversation. You can download the episode by clicking the link above, and don’t forget to subscribe to my podcast on iTunes or Stitcher. Tell your friends, leave a review.
Before we get into all the different flavors and the details of a universal basic income, when did you become interested in it? It’s a very old idea, but it has sort of had a resurgence.
I had reported about conditional and unconditional cash transfers in the developing country context for a while. Dozens and dozens of lower-income countries have these, and so I was familiar with that and then I got interested mostly from the Swiss referendum.
They have almost like the California prop system where you can trigger an election on almost anything by collecting enough votes. They voted to basically institute a UBI in Switzerland; it didn’t pass but it didn’t do terribly either given what an extraordinarily radical idea it would be for them. It got about 25 or 30 percent of the vote.
And then it just started bubbling up everywhere. You have all these folks in Silicon Valley. Obviously you have Charles Murray and other libertarian thinkers who have been thinking about it for a long time. And then there’s this resurgence of interest in Europe. So all of those strands started coming together and I thought this is an idea big enough for a book.
Was there anything that made you think this is not only a big idea, it may actually be a good idea as well? They aren’t always the same thing.
Yeah, absolutely. If you read the book you see that I’m in many ways enamored by it and in many ways I’m not. It’s a blunt tool, it’s a big tool, and it gets to this question of what are you actually trying to do by arguing that you should implement it? It’s like a jungle gym: It lets you think about history, it lets you think about why we have what we have right now, it lets you think about radical feminist economics, it lets you think about work as a social structure.
So I liked that it has this philosophical and historical background, and even better lets you apply these principles and look at what we have. It’s just interesting. It’s a really deep idea, which is not always true of what we are talking about day-to-day.
There are many flavors of the universal basic income. Libertarians have a version. The left has a version. Briefly, what are all these different versions? And what are you advocating?
Just to pick up a thread that you mentioned, I do think that you gestured toward something really important, and I don’t know what I think about this but I think it’s interesting. You have the development of the modern welfare state that rises out of this transition from feudalism to mercantilism and then to capitalism. This happens in Europe, where you have all of these people who are dispossessed from their land that are then working as wage laborers. And all of a sudden a system needs to grow to help support them because a lot of them are unemployed. And so I think that there’s this argument that with AI and technology and globalization, we are moving to a new economic reality and we’ll need new social structures to support it.
The argument for UBI doesn’t depend on that, though, does it?
No, it’s just an argument that is made about it.
But that is what I think captures people — this idea that we’re seeing this big economic transformation. Because there are a few quotes in the book of people saying this is a big change, and if you’re going to have a big change, there must be a reason for the big change. And five people owning all the robots and the rest of us working for them, well that would be a big change. But your argument doesn’t require super-intelligent AI.
No. I don’t think we have any idea what AI is doing to the economy. So to your point, you have this libertarian/conservative argument that basically the government shouldn’t be trying to micromanage people’s lives. So in the SNAP program, or food stamps, currently in some states you can buy sweet potatoes but not white potatoes. So like let’s stop doing that. Let’s get rid of HHS and all these other huge departments and just give people money. This is Charles Murray’s argument. He’s been making it for 20 or 30 years.
Then you have the liberal argument, which is that our system right now is not redistributed enough. We have an alarming number of people in poverty given how wealthy the country is. So UBI might be something to create a true backstop, a true insurance and we’re going to say nobody is going to fall down below some level.
And then the third big argument comes from Silicon Valley, which is like, “we’re sorry we’re going to take all of your jobs. But instead of having your nice $65,000 a year job as a truck driver, you’ll have twelve thousand dollars a year thanks to the UBI, so you’ll be fine.” Which I think is an insane argument but is indeed the one that they’re making. You’ll have great video games you can make art or whatever it is.
And actually I would say that there is a fourth argument which is a related argument to the liberal argument: We should have an income guarantee. Richard Nixon actually was into this idea, that we can use the tax code to implement a negative income tax and eliminate poverty. It’s kind of a clean and easy solution. It costs something like 200 billion dollars a year currently, which is a lot of money, but it’s not trillions of dollars. It’s not a totally crazy amount of money. You could certainly finance it with small changes in the tax code or by reducing other programs.
Which is the good version that you like? I’m sure you’ve looked at these and you’ve come up with the ideal blend of all these things.
Ultimately I think that the fourth case is the most compelling. I think that we have alarming rates of child poverty in this country and we have not really taken the steps to ameliorate that. You and I could have an argument about how bad poverty really is, how many Americans are really living in cash poverty, how much the consumption among poor people has gone up even if in some cases their income mostly hasn’t — but I do think that there continues to be just an alarming amount of stress in some communities.
I like the idea that the United States would basically say, we’re not going to punish kids for the failings of their parents. We are going to go ahead and do this through either a universal cash grant for kids or a negative income tax, which is a pretty clean and straightforward way of doing that and I think would be a pretty good investment especially in young people.
Whenever there’s a really popular movie, they want to make a TV show out of it, but it’s not going to be as good. There was a great movie called “The Bodyguard” with Kevin Costner and Whitney Houston. But if you make a TV show out of it, you’re not getting Kevin Costner. Maybe if you’re lucky you get like a Mark Harmon; if you’re really not lucky, you’re probably getting David Hasselhoff.
So the version of UBI that I think really attracts people is the Silicon Valley version. It is beautiful, elegant — you would replace this morass of programs with just one check. What you’ve just described is the less sexy, less interesting, made-for-TV version.
Is that what we should be focusing on, and not use up a lot of bandwidth on this big idea? It wouldn’t make a particularly strong book — more like a policy paper — but is that really what we should be focusing on rather than the version of UBI which people start podcasts about?
The political economy question is a good one and the sexiness question is a good one, especially because I think Democrats are now in this place where they’re going to promise the moon. “We want to get rid of ICE. We want free college for everybody. We want Medicare for everybody. And we’re not going to talk about financing. We’re just going to do it.”
And I think that the core message there is a good one. It’s not saying we’re going to tinker around the edges of your problems in this triangulating, Clintonian way. We’re not going to say to you, “oh, don’t worry, NAFTA is going to be totally fine for you.” We’re going to say we’re going to do the big crazy stuff. We’re going to stop negotiating ourselves down before we’ve even started talking to Republicans.
I am more of a policy reporter. So inevitably I’m more attracted to policy — I’ll see something and think, wow, this is really good bang for the buck. This is a really smart idea and we could do this without really changing the tax code too much — and so I feel like I’m very over my skis thinking about these normative questions.
But maybe doing the big radical thing is what people are asking for right now, especially since we’re in this hyperpolarized partisan climate in which I do think to a certain extent people on both sides are promising the world.
Well, we have one side during the campaign not only promising the giant mega wall, but I think at one point a $13 trillion dollar infrastructure bill. So the other side must think, if they don’t care about realistic promises why am I talking about EITC expansions or some sort of a public-private partnership infrastructure bank?
I like that we can sit here and talk about what’s the biggest bang for the buck. There’s a way in which UBI boosters want to treat it like it is the Magic Bullet that solves all problems and I just don’t think that that’s true. If you have a UBI — and this is my issue with Charles Murray’s proposal — what happens to progressivity? What happens to redistribution? That’s a much less redistributive system, which is something I worry about — though I think that he sees that as an advantage of it.
But the nuts and bolts really matter. EITC expansions really matter. One other thing that has bothered me is when people say Bernie Sanders’ campaign promises all of this big stuff and does not worry too much about the policy details. And true, how the heck are you going to do some of this? I think that about the jobs guarantee — how would you actually do that? Lots of hand waving and nobody actually knows let alone where the money comes from.
But just saying, “We’re going to end poverty” — I think that’s kind of catchy. I think that’s a good thing. “We’re going to end poverty for kids.” Let’s just do that. Forget about explaining how you’re going to do that with negative income taxes and how they’re less complicated than they seem — let’s do that and have that moral goal.
This makes me think of the flat tax and the right. There was a point in the 90s where the era of big government was over. It was really a hot issue even on the left. I remember Dick Gephardt, a man of the unions and the left, had a flat tax plan. So everybody had it and it seemed like the magic cure and this again was a beautiful, elegant, simple idea.
But then you think, how does this actually work? Once it went through the meat grinder of reality people realized there would not be just one tax rate. People realized politicians would begin saying, “maybe there should be a surtax for the superrich, or here’s a new program and maybe there should be a tax devoted to it.”
To all the real UBI enthusiasts, isn’t that the exact same problem for people who want the purest UBI plan? It’s not going to stay simple. It’s going to go through the meat grinder of political reality. People are going to say, “Well, everybody shouldn’t get the same amount of money.” Or, “even if it’s means-tested, people with some disabilities should get more.” I don’t want to use the word fantastical, but it is a little bit like fantasy policy, right?
I’m a defender of means-testing. I think means-testing is really important and really good.
Under none of your scenarios would you want be cutting Bill Gates a check.
I think if you are cutting Bill Gates a check then you need to be doing other things to ensure progressivity. It is important to me and I think important to most people to say, let’s give the most help to the people that need the most help. UBI doesn’t naturally do that. That’s not an impossible problem to solve.
But there are different forms of simplicity to think about. There’s this progressive “do we want a means-test to give more help to people who need more help,” but then there’s also just programmatic simplicity. A lot of the issues that people have with our existing safety net programs are things like having to comply with a work requirement, which are often really hard and annoying to comply with.
For an upcoming story I was talking to a woman in Maine who’s a single mom. She was enrolled in TANF, which is our cash welfare program, through a community college program that would let her attend school as well as work while she was taking care of her kids. And the state of Maine required her to go to all of her professors after each class and to have them sign a sheet attesting that she had physically been there so that she could give that to the state so that she wouldn’t lose her TANF benefits. This was humiliating and annoying —
And perhaps secretly meant to deny her benefits.
Exactly. Complexity like making people pee in a cup, or having short re-enrollment periods so every six months you need to be talking to the government to make sure that you’re getting your benefits. In some states you have to call a 1-800 number that’s only open between nine and five to know how much more food stamps you have for the month — that kind of stuff is needless complexity. And in a lot of cases state governments are increasing that kind of complexity. We know that it leads people to drop out of programs. We know that it puts a disproportionate burden on people who might have language and literacy challenges.
There’s a really good argument that just getting rid of all of that stuff to make it so that you automatically get something if your income is low — I think that simplifying things is a really good thing and UBI is simple. It tells us we can just give people cash instead of having these complicated in-kind benefits and these programs can be way simpler than they are right now.
When you talk to people who are all-in proponents, is the goal to raise living standards at the bottom? Or is it more, “this is how I believe the world should work. People should have the right to a good living standard and the freedom to use their money as they want without working because they’re a human being.” How much does the UBI argument come down to this human right issue versus the more practical issue of, “I just think that in a wealthy country people should live better than they are now”?
Yeah, I do think that a lot of people make that second argument. They use this phrase: “fully-automated luxury communism.” Let the robots do the work, and let people do whatever they feel like. Why should people have to work so hard? This is absolutely an argument that people make.
Also, a UBI would provide people with a certain freedom of choice. If you have $1,000 a month or your family has $3,000 and your dad is dying, maybe you can decide to stay at home. Or you want to have another kid and so you decide to stay at home with the kid. Or you decide to do artistic work — you can do that now too. And so I think that that is one of these more profound arguments, that this is basically a government insurance system sort of like Social Security where the government says, we’re just not going to let you get that poor. But it also is providing you with more choice.
What do you believe people would do with that choice? Do you believe people would take up poetry, learn to play the cello, take coding classes — or do you believe their lives would just fall apart without work to structure themselves and help them find meaning?
I’m of two minds about this. I think it’s so fascinating because on the one hand people love working. Even really low-income people, single parents with kids, people with disabilities — they like working. They like the social structure that work gives you, and they like having some place to go during the day, and they like talking about their jobs.
It makes people feel good. There’s this amazing study that looked at older folks. When they stop describing themselves as unemployed and start describing themselves as retired, they get happier — so much happier that there’s actually a different level of cortisol in their blood. And so I don’t discount that; people want jobs, they don’t want handouts. And we have this whole culture that is really set up to venerate this fact and try to encourage and in some cases connect people with work.
And on the other hand, we have an economy that is really punishing to parents and other people who need to provide a lot of care work. We have an economy that doesn’t really compensate or even recognize a lot of work that is not paid. And we also have a lot of jobs that are just terribly compensated and degrading that people are just doing to keep their heads above water. I just don’t quite know how to balance these two things in my head.
The studies that you looked at, where do they come down and do you feel super confident in their conclusions?
At least right now, I think that what people want is to work but have better jobs — jobs with time off, health benefits, that would let them have a kid or adopt a kid, and that would let them take care of somebody if somebody was really sick. I think people want work. I don’t think they just want cash. And this is why the Silicon Valley version of this bothers me. If you take somebody and say, well robots are doing your job now, here’s a handout — I think I would be bereft. I don’t know what I would do.
That’s not a good trade-off. That’s terrible. I think that you would need to find some way to help those people transition into maybe different forms of work, but I think that people would still want to point to what they did.
I feel like you’re making a powerful case against UBI, at least on the version that lures people into this issue. And the conspiracy theory I hear is for all these people who like UBI on the left, including Annie Lowrey, it’s not about UBI. It’s just about conditioning us to accept more redistribution. They know that’s not going to happen, the politics are terrible, taxpayers are never going to go for it. No, what you Annie Lowrey are trying to do is expand people’s thinking, open the Overton window, and just get people to accept a lot more redistribution. Is that your plan?
I was having dinner with some friends of mine who true-blue libertarians — not conservatives, real libertarians. And I described UBI as a Trojan unicorn; this is just the way you condition people. And I’m not sure that’s wrong exactly.
I would say that I think many of UBI’s strongest boosters have the most delusional cases for it. It’s a tool and you can use it for all sorts of different ends. And I think it’s really worth thinking pretty deeply about how complicated people’s lives and motivations are and what kind of incentives you’re creating and structuring.
One thing I would note: In the experiments done by of all people Donald Rumsfeld and Dick Cheney, where they provided people with a negative income tax support that gave us a really good look at what people would do with this kind of money, people did stop working. So it’s not that nobody stops working, which is an argument that people make, but when you looked at who stopped working it tended to be students who stayed in school for longer, unemployed people who took longer in job search (though over a longer period of time it didn’t reduce unemployment levels), and then people doing caretaking.
But that’s a negative income tax, not a pure UBI?
Right. There was kind of a UBI experiment in Canada, and there’s suggestive evidence that would be true even in a UBI, although obviously there’s some amount of money where if you pay people enough they will just stop working and go to the beach, maybe while robots make them Pina coladas or something.
Joe Biden may run for president, and here’s what he said about UBI:
Americans don’t want a no-strings-attached check from the government like the universal basic income proposal pushed by some leaders in Silicon Valley. They want work that provides dignity and a sense of community as well as a good paycheck. To deliver that we need policies that support work and ensure workers can succeed in a changing economy.
That’s a pretty good summary, and I think that would resonate with a lot of voters.
So first of all, I kind of push back gently on his either-or. You can give people cash while also saying we want you to work. We want to support policies that are going to create jobs in places like Appalachia. We’re not saying that we’re buying into a vision of the economy in which like 10,000 people have jobs and they’re all multi-billionaires while the rest of you are all just eating Cheetos and playing video games because the robots that provide Pina coladas on the beach are too expensive for you to buy.
And what’s kind of crazy is that Barack Obama was speaking at Nelson Mandela’s 100th birthday and he kind of signed on to this sort of moony, future-focused vision where if we’re going to have more inequality and it’s going to be driven by AI and we’re going to see mass joblessness and these distributional concerns, maybe we do need it. So those two are at loggerheads, I guess.
Some people like this idea because they don’t like the paternalism of saying here’s your voucher for housing, this is for food, that type of thing. There are some studies showing that a large number of people if they got a check would use it for what they’re supposed to, but some portion of these people, and people with children, who we’ll feel more sympathy for, are going to blow this money. And those instances will be highlighted in the news. That to me seems like a very weak point for the “just give people money” argument: some people are going to misuse that money.
My question is always, so what? Say you’re getting food stamps and you’re getting cash and you have a kid. What the government is trying to do is ensure adequate consumption for your kid. We have so many studies on this showing that people who buy food with food stamps consume almost exactly the same type of food that everybody else does. The consumption of fast food is almost identical among really high-income people and low-income people because fast food is inexpensive and delicious.
I just don’t worry when we have study after study after study showing that when you give people cash their consumption of vice goods does not increase. What happens is they consume more, they don’t tend to change their basket of consumption.
And so yeah, some people are going to waste the money. I feel like we just need to say, okay cool, that’s fine.
But that would be used to completely undermine support. I mean just look at the immigration debate, when every crime committed by an immigrant is now being highlighted to say we should send them all back because they’re all criminals.
I do think that you can get around this. Where are the stories saying look how these people got a mortgage-interest deduction and look what they did? Look at this architectural monstrosity of a 3rd wing that’s built in a swamp. Nobody says this grandma got her Social Security and she used it on a fancy golf cart. Though for Social Security it’s because there’s this understandable but I think somewhat incorrect sense that the money is theirs and they paid it in, and then they got it back.
We judge poor people in a way we don’t judge people who are getting middle-class tax breaks. I have not seen a lot of stories saying this family got their EITC money and they wasted it at Atlantic City casinos. This is just for those social welfare programs that are super stigmatized, and so maybe that’s an argument for just getting rid of them. Have negative income taxes and the EITC: We don’t judge people for what they do with the cash they get through the tax code. We judge people who are getting these “hand out” programs through the welfare system.
Do you wish this book came out a year ago? We have very low employment, we don’t seem to have seen the impact of AI taking over the economy, you have the group of people who are really pushing it in Silicon Valley now held in somewhat low esteem — do you think there was UBI moment, but unfortunately it was just last year?
No. I think that this is coming and going but there’s just so much new interesting stuff. Chicago is looking at doing something with a UBI. Hawaii is looking at doing something with a UBI. You have these 2020 candidates who I think are looking at it and I just don’t think it’s going anywhere.
And I also think there are good policy fights to be had right now. They are smaller bore and they’re much more in the math and in the weeds, like pushing back against work requirements in Medicaid which are really poorly designed, that are going to make a huge difference in people’s lives.
Do you think there will be a 2020 candidate, I would assume a Democrat, who would actually push this idea?
I would not be surprised. It seems to me that Dems have really grasped onto the jobs guarantee, basically for the Biden reason, saying we think people want to work; we think that we need a backstop for these people.
My concern about that is all in terms of practicality. It’s really not clear how they’re going to create the jobs guarantee, but I do think that’s the reason they’ve sort of cottoned on to it.
Last question: Do you think a jobs guarantee is a thornier problem or a less thorny problem than a UBI?
I have some concerns about that. It’s just going to be really hard to do. You’re going to have to have a huge Department of Labor going around to find these jobs, and there are already so many great small initiatives that you could grow. And lot of these guaranteed jobs would be transitional jobs for the formerly incarcerated, but I feel like that’s going to be easy to attack politically: “Hey, you’re taking my tax dollars and instead of putting them in my schools, you’re giving them to some guy who committed armed robbery three times.”
It’s just logistically hard. So it just goes back to our earlier conversation about how maybe it’s just a moment for promising people the moon. But I do think that it’s going to be harder than people expect and there’s going to be a lot of failures.
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