Sunday, September 22, 2019

Adventures in Late-Stage Capitalism #7: Universal Basic Income and Americans: Irreconcilable Differences

America's economy is grounded upon the idea that everyone who isn't disabled or independently wealthy will work at a full-time job for 45 to 50 years. Some folks have argued for a long time that it doesn't have to be that way; if we were to shift away from capitalism, we could all work less or retire earlier. Or maybe we could even distribute resources in a way that would allow people to live above the poverty line without having a job at all, if that's their thing.

As architect and visionary Buckminster Fuller said in 1970:

"We should do away with the absolutely specious notion that everybody has to earn a living. It is a fact today that one in ten thousand of us can make a technological breakthrough capable of supporting all the rest. The youth of today are absolutely right in recognizing this nonsense of earning a living. We keep inventing jobs because of this false idea that everybody has to be employed at some kind of drudgery because, according to Malthusian Darwinian theory he must justify his right to exist. So we have inspectors of inspectors and people making instruments for inspectors to inspect inspectors. The true business of people should be to go back to school and think about whatever it was they were thinking about before somebody came along and told them they had to earn a living."

OK, let's stop right there. This is a not a blog written to answer the question, "Is a socialist utopia viable?" I don't have time to write that. Like most Americans, I have to work for a living. But as I discussed in my last post, artificial intelligence is rapidly delivering an economy where it will be very difficult to create useful jobs for every able-bodied, not-already-wealthy adult. The solution, according to some, is basic universal income (UBI). Whether UBI is workable in the United States is debatable.

If you're interested in UBI, I recommend visiting Andrew Yang's campaign site. Yang, a Democrat seeking the Presidential nomination, has created a very detailed Q & A on the subject. He'd grant $1,000 per month to every adult American, in addition to single-payer healthcare (free to the poor) while continuing social security and veterans benefits. UBI would however replace disability payments and welfare such as food stamps.

So, according to Yang, how would we come up with the money? In short:
* Corporations and wealthy individuals would start paying a lot more in taxes.
* All that money in the hands of consumers would grow the economy.
* A healthier society less prone to incarceration and homelessness would mean less tax money targeted to those problems.

For the record, I think this program is workable and in general a good idea. But I see two big problems with ever getting UBI implemented. The first problem is: your puritanical, pull-yourself-up-by-your-own-bootstraps American is not going to get behind a welfare program like this, and big business and the wealthy will fight paying for it tooth and nail. Andrew Yang's UBI program, combined with single payer healthcare isn't really very different with the New Frontier/Great Society programs created to fight the "War on Poverty" of the 1960s. Those programs worked - Under Presidents Kennedy and Johnson, the poverty rate fell from 23% to 12%. Unfortunately, a great many Americans hated those programs. Personally, I've had any number of conversation about politics that began with someone indignantly asking, "What about all these people on welfare?" Ronald Reagan based much of his first Presidential campaign on the idea that people on welfare were robbing everyone else, and even Democrat Bill Clinton was adamant about "ending welfare as we know it."

Second, UBI is easily perverted into a libertarian dream of destroying public services. As Daron Acemoglu of Marketwatch.com pointed out recently:

"Sacrificing all other social programs for the sake of a UBI is a terrible idea. Such programs exist to address specific problems, such as the vulnerability of the elderly, children, and disabled people. Imagine living in a society where children still go hungry, and where those with severe health conditions are deprived of adequate care, because all the tax revenue has gone to sending monthly checks to every citizen, millionaires and billionaires included."

Actually, we don't have to imagine such a society. The state of Alaska has already perverted the idea of UBI in exactly the way described by Acemoglu. Alaska has had for decades a Permanent Dividend Fund, which makes annual cash payments derived from oil revenue to every Alaskan. Republican Governor Mike Dunleavy ran for office on a platform of raising these payments from $1,600 to $3,000. Unfortunately, those increased payments now necessitate devastating cuts in state spending. From Josh Axelrod of National Public Radio:

"The University of Alaska System is bracing for a 41% cut in funding it receives from the state, after Gov. Mike Dunleavy vetoed a $130 million line item in the state's budget.

The announcement came last Friday, three days before the fiscal year began on July 1. Dunleavy vetoed roughly $400 million in items in the budget, with education receiving the largest cut.

The university system will lose $130 million from the veto — on top of an additional $5 million previously agreed upon by legislators. The governor's 182 line-item cuts also included Medicaid, senior benefit payments and homelessness services.

University President James Johnsen says he was caught by surprise."

""I'm not arguing against the [Permanent Fund] dividend necessarily, but if we didn't have it we would actually have a budget surplus this year," Johnsen says. "But given that 37% of the state's budget is proposed to go to $3,000 checks to every Alaskan – that's what creates this this fiscal challenge.""

To summarize, we live in a country where the President of the United States has recently issued an executive order demanding that federal agencies review their welfare policies and find ways to crack down on the lazy and indolent. A country that elects a President like that is not going to warm up to the idea of universal basic income any time soon. So what will Republicans do when artificial intelligence means jobs are no longer available? In my estimation, they'll do the same thing they're doing in addressing climate change, Americans with no health insurance, ballooning budget deficits and every other problem faced by this country: Republicans will do nothing at all.



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