The UBI debate: criticism and analysis

Interestingly and somewhat unexpectedly, a lot of pundits and bloggers on the ‘right’ are embracing the idea of a UBI. However, many of thee arguments, for either side, have flaws. From Zeroth Position Agreeing With Statists For The Wrong Reasons: Universal Basic Income:

One criticism of welfare programs is that they are dysgenic; they subsidize the survival and reproduction of the unfit at the expense of their Darwinian betters. But any effort to combat dysgenics must begin with figuring out who the dysgenic people are. UBI does this in a way that no other welfare program does. It gives equal amounts of money to people, and the spending habits of the recipients can be studied. The overall process is the closest thing to a controlled experiment that can be performed in economics. The results will show who is beyond help due to poor decision-making, such as spending their entire basic income payment on vices. From there, the least intelligent members of a society can be dealt with through a variety of means.

There is an inverse relationship between fertility and wealth. It’s not uncommon for welfare recipients to have many kids. This suggests, in accordance with the Darwinian definition of fitness, that these low-IQ people are more ‘fit’ than high-IQ people, due to this artificial environment, among other factors. This is a major problem facing society, due to both the prorogation of deleterious genes and fiscal burden. Even low-IQ people are smart enough to figure out that they can sell their food stamps for alcohol and drugs, and then get their caloric fill at local churches and shelters. Zero says “from there, the least intelligent members of a society can be dealt with through a variety of means,” but I am not confident this will happen. A UBI will not change anything if existing support systems–be it welfare or charity–continue to exist. Welfare or UBI contingent upon birth control could work (of course, this will never happen).

Furthermore, attempting to reduce spending on welfare programs, as libertarians would advise, is politically impossible in a democracy. Such efforts will only get one branded evil, selfish, heartless, racist, sexist, and all the rest of the Great Progressive Litany Of Not An Argument.

Clinton in 1996 passed welfare reform, so it’s not like welfare cannot be repealed. If a UBI causes significant economic problems such as high inflation, I cannot see why Congress would not act out of self-preservation and out of their own personal financial interests to repeal it. As TARP showed, which was very unpopular but still passed (263–171 in the House, and signed into law by George W. Bush), economic expediency takes precedence over political popularity.

Given economic realities, it is far more practical for UBI to replace some or all of current welfare spending.[13] Again, repealing welfare without replacing it is a political non-starter, so it is necessary to consider replacement. UBI is not means-tested or contingent upon any factors which must be examined, so the need for a bloated welfare administration is eliminated.[14] Lisa Westerveld, a councilor for the city of Nijmegen, Netherlands, estimates that £15 million of their £88 million annual welfare budget could be saved by implementing UBI there.[15] It is important to remember that welfare does not solely consist of handouts, but also of make-work programs and bloated bureaucracies that introduce artificial inefficiency to the state apparatus and the broader economy. Cutting these programs and government jobs should be a welcome development to any libertarian.

Except that the UBI, in and of itself, would be a massive bureaucracy program…possibly the biggest ever. The Social Security Administration employs 60,000 people (by comparison, the FBI employs 34,000 people) and has 60 million recipients. A UBI for every American over the age of 18 would have as many as 240 million recipients. A lot of people, especially the poor, do not have bank accounts. Having to coordinate payments for as many as 240 million Americans of all walks of life, every month, is a massive undertaking. Zero attributes Social Security’s administrative bloat to means testing, but only 17% of Social Security claims are for disability.

And it’s unlikely the the UBI will replace existing welfare programs, the reason being: people who abuse their UBI will not be allowed to starve. Second, if someone knows they are going to get both welfare and a UBI, the rational choice is to use the UBI for things not covered by welfare and other forms of public assistance.

Another effect of providing free money unconditionally is that people will have less need to work for a living. Less work means less tax revenue, which in turn means less funding for government programs.[16] This is good because it will force formerly public projects to be created and maintained privately, thus subjecting them to market accountability. Alternatively, the state may run larger deficits or inflate its currency, but these measures will eventually cause it to cut spending out of necessity when interest rates rise and creditors become nervous about a sovereign default. Meanwhile, once people have a basic subsistence without work, many unskilled jobs that are ripe for automation would have to be automated quickly, as businesses and governments would no longer be able to find workers to fill those jobs. This would greatly increase efficiency.

But those who are most inclined to quit their jobs due to a UBI are in the bottom two quintiles and already have a negative effective tax rate.

Right-wing parties could therefore expect a boost at the polls if they embrace UBI.

This assumption is unsupported by reality. The ‘right’ is opposed to hand-outs, out of principle.

But this provides an opportunity for people to buy precious metals and cryptocurrencies as a hedge against inflation.

There is no guarantee gold will work as a hedge. It could work if the CPI exceeds the federal funds rate, which means the fed is “behind the curve” in tackling inflation, but often it’s the other way around. Gold is a good hedge for foreigners, but not nearly as good for Americans, due to Americans’ wealth being denominated in US dollars. If there is high inflation, rental real estate and stocks are better than gold, because revenues from rent and dividends will increase accordingly, as well as the property itself, but gold does not generate dividends or income.

If mothers are at home raising their children, then children will receive better care than they would from strangers. Money saved on childcare could be kept within the family to provide for the children or help the family unit in other ways, while those providing childcare would be freed up to do something more directly productive. Renewed dependence on male breadwinners to provide for the family beyond the level that UBI allows would strengthen family cohesion and lessen divorce rates.

Agree. This is one of the best argument so far I have seen for the UBI.

Finally, and perhaps most importantly, UBI could fuel a surge of anti-establishment activism. Many people who work in menial, low-paying jobs with little hope of advancement would prefer to be professional political activists, and UBI would allow them to do this. Those with careers who fear losing them if they speak out of turn would also have a fallback strategy, if a less luxurious one. This surge would primarily be libertarian and rightist, as leftists have an entrenched establishment to protect their activists from the harms that other activists suffer. UBI would not solve the problems of deplatforming or anarcho-tyranny, but it may make them so onerous that they can no longer go unsolved, which is the general objective of a bootlegger political strategy.

I hear this augment a lot that the UBI will encourage right-wing activism by providing a financial cushion in case one loses their job for politically incorrect speech. A $12,000/year UBI is the poverty line for a single-person household, which represents a major downgrade in living. Unless you’re content with living out of a van, that does not seem like an attractive trade-off. You cannot raise a family off that.

I don’t understand all this UBI hype, especially given that likelihood of Yang’s UBI being ratified in its current $1,000/month form are close to zero, and much worse than the odds of Trump’s wall being built, which was already a long-shot. It’s similar to libertarianism in that it generates a ton of debate and discussion despite the zero-percent likelihood of libertarianism ever being adopted. Worse still, the UBI will not cut welfare spending unless it is in lieu of welfare, which I don’t see happening. If the UBI begins to have serious economic consequences, Congress will vote to scrap it. It will not encourage right-wing dissent, because the amount of money is simply not big enough.

However, Yang’s UBI could have the positive benefit of allowing mothers to raise their children instead of relying on daycare, because a two-parent $24,000/year UBI is about equal to a single low-paying second or part-time job. It may also be a positive in that people who have low preference for work will just exit the labor force, which benefits those who value work more, which could be better for productivity. Someone who earns minimum wage and hates his job would just exist the labor force to live off the UBI, and be replaced by someone who has a higher preference for work.