Left- and right-leaning thinkers and groups have touted the benefits of basic income. But that doesn’t mean they agree on a policy.
Old ideas for new problems
In 1969 President Richard Nixon, with the help of his chief Urban Affairs Advisor Daniel Patrick Moynihan, sought a creative way to reform welfare. They developed the Family Assistance Plan, which provided an income floor of $1,600 (about $11,000 in today’s dollars) to all poor or unemployed families of four, regardless of working status. While the Nixon administration called the scheme a “negative income tax” a la Milton Friedman rather than a guaranteed or basic income, the principle was the same. Though the proposal died in the Senate, this episode represents the first serious foray to explore the idea of income floors in American politics (outside of Thomas Paine).
With the rise of artificial intelligence, automation, and other job-eliminating technologies, concern for the future of work and the economy touches almost every policy discussion. Mark Zuckerberg and other Silicon Valley entrepreneurs have increasingly proposed basic income as a potential solution to the changing economy. Basic income policies are income guarantees made by the government to its citizens, sometimes regardless of a person’s working status or wealth. In anticipating further economic disruption, the Silicon Valley elite have reason to find a way to assuage the concerns of those whose jobs their tech is taking.
The concept is also being explored in the international development space. GiveDirectly (a nonprofit strongly funded by Silicon Valley) has run basic income experiments in a small village in Kenya. Some argue that cash transfers are the fastest way to alleviate poverty. Economic journalist Annie Lowrey, author of Give People Money: How a Universal Basic Income Would End Poverty, Revolutionize Work, and Remake the World, notes that the global poverty gap is estimated by Brookings at $66 billion dollars, which is roughly equivalent to what Americans spent on lottery tickets last year. How successful could a basic income scheme be in covering that gap? Independent studies are ongoing, and it will be some time before we know anything definitively. In the meantime, debate will continue, though the proponents and opponents of basic income may not line up as you expect.
Strange bedfellows?
Left- and right-leaning thinkers and groups have touted the benefits of basic income. American Enterprise Institute fellow Charles Murray has backed a universal basic income program that replaces welfare programs. The libertarian Cato Institute has also shown support for discussion around the idea.
Libertarian and conservative arguments follow three main forms. First, a guaranteed income could become cost-saving for the government if it was implemented along with the elimination of other welfare programs like TANF or SNAP. Second, the cash nature of the benefit does not limit uses, and people prefer cash to in-kind contributions, allowing utility maximization that classical economists adore. Third, universal basic income would require less government oversight and fewer administrative costs by its universal nature.
On the other side of the aisle, left-leaning cities like Chicago are considering a basic income experiment of their own. Andrew Yang, an early 2020 Democratic Presidential candidate, has made universal basic income a main policy issue for his campaign. The more liberal proposals paint basic income as a mechanism to augment the social safety net, not replace it. Left-leaning proponents of basic income also argue on equality grounds, as such a policy would necessarily call for at least some increased taxation to be feasible (likely through a value-added tax).
Both sides have offered critiques as well. On the right, concerns focus on funding and work incentives. Michael Tanner of the Cato Institute estimates that at a $12,316 level of basic income, such an effort would cost $4.4 trillion, more than the current size of the entire federal budget. He notes in his paper on the topic “even if the guaranteed national income replaced every existing anti-poverty program, we would still be some $3.4 trillion short.” Funding is a valid concern, and could also be a crucial factor in shaping any basic income proposal. Any proposed government welfare program, especially one without any work requirements, will receive criticism for perverse incentives.
The left fears that basic income would not go far enough or be oversold as the solution to a changing economy, particularly for varieties that are billed as replacements to the social safety net. On the far left, there is also some wariness of the capitalistic nature of such a proposal, arguing that basic income spends time “fixing” capitalism, rather than dismantling it. Alyssa Battistoni of Dissent Magazine notes that the very need for a basic income is evidence against capitalism’s effectiveness: “capitalism’s inability to provide a means of making a decent living for the over 7 billion people currently alive is one of its most glaring defects — and one of the most significant opportunities for the left to offer an alternative.” Basically, there is a concern that basic income doesn’t go far enough, and should only be seen as a start in the reform of our economic system.
First mover advantages
To many, the question with basic income is not so much “if?” but “when?” In a time of polarization and partisan contempt, whichever side or major party becomes the champion of basic income will have the power to shape the details and public perceptions. If the GOP or other groups on the right bring it into their platform, people will perceive the basic concept as a wide-sweeping welfare reform. All other forms of welfare would likely be eliminated in such a proposal. On the other hand, if it becomes a feature of the left’s platform or the platform of a major candidate, there would likely be widespread comparisons to socialism and calls of big government intervention. Such a program’s success on a national scale, the specifics of the program, and the broader public perception will depend on who is proposing it.
Similar solutions to different problems
As experiments like those in Kenya, Finland, Canada, Oakland, California, and others continue and research results accumulate, we will learn more about what a basic income scheme could look like in the United States. We will also learn more about what an effective basic income scheme entails and have better models for a national scheme. For now, the theoretical conversation around universal basic income lacks specificity with so many variables to consider. While Charles Murray and Andrew Yang agree on calling an income floor policy “basic income,” that is about as far as any agreement goes. The problems they are seeking to solve, the mechanisms by which to solve them, and the people who are served all differ greatly. Declarations that basic income is a “policy idea both sides can agree on” are misleading. As long as the two sides use the same terminology to talk about different understandings of how to reshape welfare policy, those claims will continue. In the meantime, we should temper our expectations of cooperation on basic income.
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Photo by Nic McPhee via Flickr.
Erich is an MPP student from Pittsburgh, Pennsylvania. His policy interests include economic policy and political strategy. With GPPR, Erich is a senior podcast editor.