Analysis by Kyle A. Lohmeier
Driverless cars, “New Coke,” “smart guns,” dub-step, government, Caddy Shack II… the world is full of bad ideas that, for whatever reason, catch on for a while and gain traction – despite being utterly worthless. On Sunday, voters in Switzerland handily rejected a bad idea that makes all the aforementioned ones, save dub-step, seem reasonable: a Universal Basic Income.
Why this bit of utopian idiocy wasn’t an integral part of Bernie Sanders’ campaign, I will never know as UBI is basically welfare on steroids. The idea is to simply give every citizen of a country a guaranteed basic income that is just north of the poverty level – no questions asked.
While a full 77% of Swiss voters recognized the plan as idiotic, American radio talk show host Michael Medved was singing its praises on his show yesterday. Well, not so much the praises of the Swiss proposal, but of one teased last weekend by Charles Murray of the American Enterprise Institute in an op-ed in the Wall Street Journal. Murray first championed the UBI in a 2006 book and is preparing an updated version to be released later this month.
Murray, whom the Internet claims is a “libertarian,” and Medved apparently excuse the glaring philosophical problem with the entire idea of a UBI by saying it’s basically the same thing as Milton Friedman’s “Negative Income Tax” idea, proposed by the great Austrian School economist following World War II. And that may be, but both ignore Henry Hazlitt’s stinging criticism of “Friedman’s Mistake” which can be found at mises.org.
The fact that such an awful idea was once championed by someone who was typically full of good ideas is really of no importance. The fact I haven’t listened to “The X Factor” more than twice certainly doesn’t mean Iron Maiden sucks, obviously – it’s possible for smart, talented people to occasionally be wrong.
Medved, who declared he was “agnostic” on the idea of a UBI sounded more like a street corner preacher with a megaphone than someone uncommitted to a belief – going so far as to describe the UBI as a “libertarian paradise.” See what I mean about that poor word becoming abused into meaninglessness?
The inspiration behind that bit of effusiveness is Murray’s contention that the UBI would work, and wonderfully so, because it would totally eliminate and replace all other “entitlement programs,” and, mercifully, all the government jobs required to administrate them with their attendant massive overhead and inefficiency. Instead, every American would get about $10,000 per year in monthly installments. The actual handout is closer to $13,000 a year, but $3,000 is taken off the top to pay for universal health care – it’s a statist utopic two-fer!
So, every American over 21 years of age gets $10,000 per year for the rest of their lives even if they never leave mom’s basement. Those who do venture forth into the sunlight can earn up to $30,000 a year without losing a cent of their handout. After that, there’s a graduated scale of reimbursing the handout the more one earns, topping out at $60,000 per year of earned income, at which point the handout drops to $6,500 per year, but no lower, so as to compensate for the removal of Medicare and Social Security. Murray doesn’t detail in the WSJ piece how much income over $60,000 individuals would be able to keep after taxes, and that’s likely because it can’t be much as this scheme is fabulously expensive.
After laying out the basics of his plan, Murray has a moment of lucidity in the Wall Street Journal piece, before lapsing back into sheer madness.
“Finally, an acknowledgment: Yes, some people will idle away their lives under my UBI plan. But that is already a problem. As of 2015, the Current Population Survey tells us that 18% of unmarried males and 23% of unmarried women ages 25 through 54—people of prime working age—weren’t even in the labor force. Just about all of them were already living off other people’s money. The question isn’t whether a UBI will discourage work, but whether it will make the existing problem significantly worse,” Murray wrote in the Wall Street Journal.
He’s not wrong; plenty are living off the labor of the productive as it is. It does bear mentioning that the man is 73 years old and has been working for various research institutes since 1973, not long after returning from a six-year Peace Corps stint in Thailand. Goodness knows the man has led a far more interesting life than I have, and has likely forgotten more about the world and economics than I’ll have time to learn. However, I’m betting he hasn’t worked in a pizza shop in the last five years and hence doesn’t know the scale of the massive sense of entitlement found within the common Millennial.
Indeed, this past weekend, Murray unwittingly described the world’s largest participation trophy.
And that’s what a UBI is, a participation trophy. “Hey, you suck, but, you’re here. Have a piece of plastic covered in toxic Chinese gold-colored lead and cadmium bolted to a piece of faux marble. You’ve earned it.” Only now instead of a potentially carcinogenic trinket, the prize is $13,000 of other people’s hard-earned money.
Murray contends that his UBI plan would have actually been $200 billion cheaper in 2014 than the current system, and those “savings” balloon to a trillion by 2020.
Of course, common sense dictates that once the “to” side of the equation becomes way, way sexier than being on the “from” side, everyone will want to be on the “to” side, leaving no one left actually producing anything to be stolen. Murray dismisses this.
“Under the current system, taking a job makes you ineligible for many welfare benefits or makes them subject to extremely high marginal tax rates. Under my version of the UBI, taking a job is pure profit with no downside until you reach $30,000—at which point you’re bringing home way too much ($40,000 net) to be deterred from work by the imposition of a surtax,” Murray wrote.
I’m convinced Murray has never met a Millennial.
Reading on, however, it becomes apparent why Murray must downplay and minimize what will be millions of youngsters who will voluntarily never enter the labor force upon turning 21. He must, because he makes the dreaded rise of the machines a huge portion of his rationalization of this scheme of systematic institutionalized theft.
“Involuntary dropout from the labor force is another matter, which brings me to a key point: We are approaching a labor market in which entire trades and professions will be mere shadows of what they once were. I’m familiar with the retort: People have been worried about technology destroying jobs since the Luddites, and they have always been wrong. But the case for ‘this time is different’ has a lot going for it.
“When cars and trucks started to displace horse-drawn vehicles, it didn’t take much imagination to see that jobs for drivers would replace jobs lost for teamsters, and that car mechanics would be in demand even as jobs for stable boys vanished. It takes a better imagination than mine to come up with new blue-collar occupations that will replace more than a fraction of the jobs (now numbering 4 million) that taxi drivers and truck drivers will lose when driverless vehicles take over. Advances in 3-D printing and “contour craft” technology will put at risk the jobs of many of the 14 million people now employed in production and construction,” Murray wrote.
Yes, let’s nuke the economy and the basic morality of working for one’s own keep because taxi drivers might become obsolete some day when Google figures out how to make an automated car that doesn’t lose its digital mind upon encountering a pothole.
Never mind that the mere implementation of the UBI would immediately place out-of-work a hell of a lot of government employees who administer the current leviathan of a welfare state, as well as many of those private tax-preparers who live for late-March, early-April of each year to help Americans navigate the minefield that is an income tax filing.
Murray continues extolling the virtues of his plan in the WSJ piece, going on to claim that America under his UBI plan will experience a resurgence in charitable giving not seen since the dawn of the New Deal.
“The advent of the New Deal and then of President Lyndon Johnson’s Great Society displaced many of the most ambitious voluntary efforts to deal with the needs of the poor. It was a predictable response. Why continue to contribute to a private program to feed the hungry when the government is spending billions of dollars on food stamps and nutrition programs? Why continue the mutual insurance program of your fraternal organization once Social Security is installed? Voluntary organizations continued to thrive, but most of them turned to needs less subject to crowding out by the federal government,” Murray wrote.
Why then, does he suspect that Americans, aware that everyone is getting at least $10,000 and free healthcare just for sucking wind within the nation’s borders, will suddenly become more charitable? Knowing that everyone is “taken care of” by everyone else seems to me a lot more of a disincentive to charity than being aware that food stamp or WIC programs exist.
“Some people will still behave irresponsibly and be in need before that deposit arrives, but the UBI will radically change the social framework within which they seek help: Everybody will know that everybody else has an income stream. It will be possible to say to the irresponsible what can’t be said now: ‘We won’t let you starve before you get your next deposit, but it’s time for you to get your act together. Don’t try to tell us you’re helpless, because we know you aren’t.’,” Murray wrote.
I beg to differ. I have no problem telling someone capable of, but unwilling to provide for themselves to get their stuff together and be a man for once, and that’s all without giving them a dime of the money I earned. If I’m providing everyone with a living as it is and then someone has the gall to ask for more? I’m not sure I’d want to know what I’d say, but it wouldn’t be as polite as Murray’s chiding above, that much is certain.
“A UBI would present the most disadvantaged among us with an open road to the middle class if they put their minds to it. It would say to people who have never had reason to believe it before: ‘Your future is in your hands.’ And that would be the truth.’” Murray concluded.
What? That path is open to everyone in the United States right now; it just requires what it always has: hard work and determination. Here, it sounds like Murray is echoing Bernie Sanders’ sniveling refrain that the “system is rigged.” Coming from Sanders, such a sentiment is understandable; it’s just naked pandering to his whiny, entitled base. Coming from an economist, such a statement is unforgivable.
The entire notion of a UBI as a cure-all for the American economy is akin to thinking that Sudafed (the good stuff you have to sign for because the kids like to make meth out of it) cures the rhinovirus. It doesn’t. Sudafed masks the most obnoxious symptoms of a rhinovirus infection. Likewise, the UBI would mask the symptoms of an economy infected with too much corporatism, regulation and taxation by lessening the appearance of extreme poverty while doing nothing to deal with one of the most preventable causes thereof: the multitude of barriers government at all levels places between individuals and work.
What barriers? Well, if you’ve got some time to kill and feel like giving yourself a headache, just Google all the various licenses your home state offers. Well, “offers” is the wrong word, more like “requires before you can do business, by threat of force.”
For instance, here in Ohio one must have a license before they can engage in the profession of operating a second-hand clothing store, or repairing small appliances and/or electronic devices, or to be any sort of “peddler” or “transient merchant.” Because, we all know the harm and chaos that can be wrought by an unlicensed vendor of second-hand blue jeans, particularly if they peddle their wares on the road. And who knows? If I bring a broken toaster to an unlicensed small appliance repairman, he might take my money and still not fix it. Then what? The horror is too great to consider.
The problem we have in this country is an abundance of government. While Murray and Medved seem enamoured of the idea that the UBI would actually mean less government because of all the various programs it would replace, one still cannot arrive at less government by replacing a host of small government programs with one enormous one, however few people they think it would take to administrate it. At the end of the day, the UBI is still nothing more than a mechanism by which the government steals from the productive and gives to the unproductive. This is not just always wrong but is always a disincentive to productivity on both ends of the spectrum: the producer becomes disheartened, knowing that despite how hard he works, most of the fruits thereof will always be stolen and given to those who didn’t earn it; while the leech becomes justified in his existence of sloth, happy to trade a basement bedroom at mom’s and unlimited, uninterrupted Xbox and pot-smoking time for never having to go to work – even if it means a diet that is largely ramen noodles and store-brand cola.
The fundamental fatal flaw with this idea, just as it is with the Left’s incessant whining to raise the minimum wage, is that it tries to divorce currency from value, which cannot be done without disaster. Currency is nothing more than the language we use to describe the value of something, and a wage is then, by extension, the language used to describe the value of labor. Playing Xbox stoned in mom’s basement while courting type II diabetes doesn’t actually generate any value, and certainly doesn’t equate to production worth $10,000 per year. Likewise, even during the busiest lunch rush imaginable, a McDonald’s fry cook doesn’t generate $15 worth of value in an hour of work, which is why it is unconscionable to compensate such labor at that rate. Even if it’s not worth $15 an hour, that labor is at least productive, however, and the compensation for it is earned.
While Murray is correct in saying the unproductive live off of the useful now as it is under the current system, his contention that the solution is to justify and normalize such behavior is as wrong-headed as can be imagined. The solution to the problem of entitlement programs in the USA is simple: end them all and don’t replace them with anything.
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