Hey Basic Income Fans, Please Never Repeat This Canard
The other day, I was surfing through my Twitter feed when Kate McFarland's tweet promoting Joel Dodge's new post "The Progressive Case Against A Universal Basic Income" came up. Kate is a supporter of basic income, the idea that folks should receive money with no strings attached (meaning no "means testing") from the government. She writes for the Basic Income Earth Network, and she's really good about re-posting the works of critics of basic income because how else are basic income supporters to debate them? So I read Dodge's piece, and afterward, I realized that I have a tiny request for basic income supporters. Maybe all of us across the political spectrum can agree on adopting my suggestion while debating the pros and cons of basic income.
First, let me address the strengths of Dodge's piece, which is about how progressives don't really like the basic income system that conservatives would like to implement. In his piece, Dodge does a great job of fleshing out the debate between two camps. In the progressive camp are the Center for Budget and Policy Priorities and its director Robert Greenstein. In the conservative camp are the American Enterprise Institute and social scientist Charles Murray. (Dodge also places Jason Furman, President Obama’s chief economic adviser, in the progressive camp as well.) Oddly enough, the conservative Murray is strongly in favor of some kind of basic income scheme, while the progressives seem to not want basic income at all, favoring strengthening the welfare system the United States currently has instead. If progressives did favor it, they would certainly wish for basic income to be an addition to the overall welfare bureacracy, Dodge noted.
But, the progressives' argument in favor of the current welfare system and the conservatives' argument in favor of dismantling this system is based on a canard, and the canard is this: "Giving everybody a basic income floor through cash transfers is too gosh darn expensive. Plus, it would even more expensive on top of all the benefits the current welfare system already distributes." On one level, I must admit that to implement basic income in one swoop would be expensive. On another level, it's most certainly possible to give every American a basic income floor. The right knows this, and the left knows this. The right knows this because they often repeat that the United States is the greatest country in the world. The left knows this because they often repeat that the United States is the richest country in the world. So, how can the greatest, richest country in the world allow poverty to run rampant inside its borders?
To answer this question, I turn to political economist and historian Gar Alperovitz. He noted that the US economy produces enough wealth for every America citizen to receive $55,000-ish (in 2015 dollars) [Source]. Of course, if wages had followed productivity gains since the 1970s, working Americans would be taking home six figures a year today. Alas, this is not the case. Now we're talking about a shrinking middle class and the angst of millenials. When it comes to addressing economic inequality and abolishing poverty, I strongly agree with Alperovitz in that we Americans don't really have an economic problem. We have a political problem.
A number of basic income supporters I follow promote a basic income floor for American citizens starting at roughly $20,000. Murray suggests a basic income starting at $10,000 with no additional welfare benefits. Dodge seems to believe that granting children a basic income allowance first before opening the program for adults is the more prudent way to begin its implementation nationwide. That may be true; however, if basic income supporters continue to repeat the canard that the United States doesn't have the money to finance a basic income program, then forget about it. Truth is that not only do we have the money to finance a ginormous basic income program in the United States, but the American economy also produces enough wealth to grant its citizens up to roughly $55,000 each today, if evenly distributed.
The real problem with implementing a basic income program in the United States is purely political. For basic income supporters like former SEIU president Andy Stern, basic income will come fairly soon. So it's not a question of "if," but "when" it comes, how should the basic income floor be financed? Some sort of scheme that raising taxes seems like a non-starter now because the political landscape is so bleak. That said, we may not need to raise taxes and/or gut the entire welfare system. Why not? Because there are more than the progressive and conservative camps looking at basic income. There's a another way.
This other camp includes those who think that the state should collect rents on common assets with which to finance a basic income floor for all. Prof. Guy Standing, Karl Widerquist, and Peter Barnes fall into this camp. The financial device they favor is the sovereign wealth fund, like the Alaska Permanent Fund (APF). Alaska uses the APF to distribute grants in the form of dividends to its residents each year from rents collected on the state's oil leases. Using this method, no new taxes are raised. The income is merely derived from rents on collectively-owned resources. One could also have a fund owned and administered by the government that is directly invested in huge basket of stocks and bonds to achieve the same desired effect.
In closing, instead of regurgitating that old canard, repeat after me: "We can afford basic income because our economy is so productive and awash with wealth already." Also, let's remember that we can finance basic income without raising taxes if we decide that the government should invest in the market and distribute dividends to its citizens through sovereign wealth funds. In the end, it's a political choice. That means in order to see their dreams come true, basic income supporters at some point will have to: