"To get rich, first build a road."
--Chinese proverb
Everybody's got to have something. Beto O'Rourke seems to be relying on the environmental vote by coming up with his own Green New Deal. Uncle Bernie wants Medicare for All. Elizabeth Warren wants to pay off your college loan with other people's money. And now this fellow Andrew Yang wants a Universal Basic Income for all Americans.
Andrew Yang? He's a entrepreneur and one of the many people running for the Democratic nomination for president. He hardly makes the news, or the polls, so he has to manufacture FLASHES for his campaign. As in flash in the pan.
This week he's made some minor waves by calling for a Universal Basic Income for everybody in the country. He'd cut checks for $1,000 a month for each American adult. Call it a grand scheme.
The idea isn't new. Some of your more leftist billionaires in Silicon Valley have mentioned some variety of a Universal Basic Income at various lectures/presentations/sermons. Lucky for the rest of us, a report on the concept of Universal Basic Incomes--called UBI for short--came out last week. It's remarkable. So let's remark.
First, a note about who put together this report: This wasn't some right-wing conservative tax dodge. It's an outfit called the New Economics Foundation in London, which, it says, aims to build "a new economy where people are really in control," as if people don't control all economies. And it proposes to work for "a new model of wealth creation, based on equality, diversity and economic stability."
The publisher of the report is Public Services International, a global trade union federation. In the foreword of the report, its authors say the "most basic principle" of a progressive tax and expenditure system is "from each according to their ability, to each according to their need." These people are not the Heritage Foundation.
Yet the report found that UBIs, found in several places around the globe, can't be counted on to reduce poverty or even be sustained.
From Finland to Alaska, from Kenya to India, there are places, states and counties that hand out cash to the citizenry. Alaska, you might remember, pays each person a yearly cut of its oil revenues. Google funds a charity that has experimented in cash payments in Kenya.
The report says money does indeed help somebody living a hand-to-mouth existence, as anybody might guess. But, as The Guardian put it, "nothing is revealed about [such a system's] longer-term viability, or how they could be scaled up to serve whole populations."
Some of our friends on the left like to point to countries like Finland when they talk about socialism. And how if Venezuela is a bad example, Finland may provide a good one. But from January 2017 to December 2018, that country funded a basic income trial, only to abandon it later.
According to The Guardian, "there is no evidence to suggest that a partial or conditional UBI scheme could do anything to mitigate, let alone reverse, current trends towards worsening poverty, inequality and labour insecurity. Costs may be offset by raising taxes or shifting expenditure from other kinds of public expenditure, but either way there are huge and risky trade-offs.
"Money spent on cash payments cannot be invested elsewhere. The more generous the payments, the wider the range of recipients, the longer the scheme continues, the less money will be left to build the structures and systems that are needed to realise UBI's progressive goals."
So Margaret Thatcher was right. Eventually you do run out of other people's money.
And if a government decides to grant a Universal Basic Income, the report says that could amount to 20-30 percent of GDP in most countries, crowding out tax money that could be used for, say, roads. Or bridges. Or health care for elderly or veterans. That is, real government work.
Of course, the report's authors have their own lists of what the government should be spending money on in absence of the UBI, but the point's not dulled: Universal Basic Income schemes don't work. What does work is something called the free market. And mankind's need not only to be rewarded for his labor, but to give himself meaning.
"Most men would feel insulted," said another famous friend of the left, "if it were proposed to employ them in throwing stones over a wall, and then throwing them back, merely that they might earn their wages." (Henry David Thoreau)
Most of us would call that common sense. But because it's not that common anymore, it's a good thing we have this new report.
Editorial on 05/07/2019