Guaranteed Income, Reap Disaster (2016 Jul)

by Barry A. Liebling

Suppose the welfare state were radically changed. All of the familiar targeted programs would be done away with entirely. In a new edition of his book In Our Hands: A Plan to Replace the Welfare State conservative scholar Charles Murray advocates abolishing “Social Security, Medicare, Medicaid, food stamps, Supplemental Security Income, housing subsidies, welfare for single women and every other kind of welfare and social-services program, as well as agricultural subsidies and corporate welfare.” And in place of these programs Dr Murray – who summarizes his argument in a Wall Street Journal essay – would have the federal government give every adult citizen a $13,000 Universal Basic Income (UBI) – $3,000 of which would have to be spent on medical insurance with the remaining amount to be used as the recipient sees fit.

Dr Murray maintains that if his plan were enacted the consequences would on-balance be positive. The author envisions that a $13,000 stipend for everyone would encourage citizens to form voluntary associations where they would help one another independent of government directives. He envisions that some people would voluntarily leave the labor force and live entirely on their grant, but this would not be any worse than what happens in the current welfare system. Furthermore, he forecasts that there will be fewer jobs in the United States in the near future and asserts that guaranteeing everyone a Universal Basic Income is the appropriate government response.

Note well that any welfare state – including the present one and the alternative proposed by Charles Murray – is in opposition to a society where individual natural rights are recognized and respected. The core essence of a welfare state is to have a bureaucratic government elite plan and direct the lives of citizens. Funding for welfare systems is confiscated from members of society who are productive and are creating wealth. No welfare state survives when it runs out of other people’s money.

Would Murray’s plan make things better or worse for the cause of liberty? Consider three observations.

First, Dr Murray calculates that his replacement would be less costly than the current welfare system. He is surely mistaken. His reckoning is based on the premise that $13,000 per person is considerably less than what is spent today – and what will be spent in the near future under existing welfare programs. But he is assuming that once enacted the $13,000 will remain unchanged. On the contrary, in the real world there would be powerful forces to increase the stipend in perpetuity.

Consider what will happen when politicians campaign on the promise to raise the Universal Basic Income – say from $13,000 to $14,000. What proportion of voters will be willing to accept an additional $1,000 per year? You can bet it will be enough to elect the “generous candidate.” Of course, after recipients of the stipend get used to $14,000 – and sellers of goods and services scoop up the “free money” – it will become obvious that another increase is “really needed.” Once started the UBI will have nowhere to go but up.

Parenthetically, Dr Murray’s insistence that $3,000 be used to buy health insurance will guarantee that no policy will be available that costs less than that amount. Insurance companies will be eager to grab the government-sponsored prize.

Second, reflect on how the Universal Basic Income will affect personal autonomy. The old cliche that the government with the power to give also has the power to take away applies here. In the current system there are a myriad of government programs and the ordinary citizen is “nudged” by some of them – but typically not all of them. If all government handouts are consolidated in one place everyone has to contend with the state’s heavy visible hand. Dr Murray approvingly gives an example in his essay of a hypothetical father who is not adequately supporting his children. According to Murray, in his system, a judge could take away some of the father’s stipend and allocate it to child support.

But why stop with child support? In Dr Murray’s new welfare state there will undoubtedly be many things that citizens do that will not be to the liking of government officials. With a Universal Basic Income the government can always threaten to reduce or withhold your stipend if you are not behaving properly. And, of course, when bureaucrats decide that you should do more of something – like participate in community volunteering – they will be in the position to reward you with a little extra money when you comply.

The possibility of extra money opens up a number of options for power-hungry government planners. A major theme among leftists is that people should be treated differently according to their class membership, ethnicity, gender, and sexual orientation. “Oppressed groups” are supposed to get more to make up for historical disadvantages. “Oppressors” (think white males) should be penalized because they have benefitted from “unearned privilege.” If Murray’s Universal Basic Income goes into effect how will it be used as a tool by leftist “social planners” when they are in power? You can anticipate that political pressure groups will lobby and endlessly fight one another for larger shares of the UBI purse.

Third, notice where Dr Murray’s sympathies are directed. In his Universal Basic Income proposal (as with all welfare systems) there are three main players – the social planners, the welfare recipients, and the citizens who fund the welfare benefits via taxes. Of course, a given person can be in any or all of the categories. Murray’s scheme caters to the needs and preferences of the social planners. It is these anointed intellectuals who “know best” about what people should do and how they should behave. The core idea behind the UBI is to make the welfare state more efficient and effective. And if Dr Murray gets his way, he and his colleagues will have a new tool to steer society. Welfare recipients are the official beneficiaries the UBI, and to the extent that they are better off the planners will be pleased. But more important than having them prosper is the social planners’ yearning to boss people around. Notice how little consideration is expressed for the tax payers who will fund the UBI. Their burden is large today and certain to become more onerous when a greater share of their income is confiscated (in the name of social justice) to give every citizen a guaranteed income. Dr Murray seems to assume that they will continue to hand over their earned wealth – and refrain from rebelling. To social planners tax payers are worker bees to be used ruthlessly in bringing about the “greater good.”

Charles Murray’s proposal of a guaranteed income for everyone will make welfare even more odious. It should not get past the thought-experiment phase.

*** See other entries at in “Monthly Columns.” ***

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