Here in the United States and indeed through almost all of the Westernized world, we have a concept called the welfare state. It has existed in various forms and functionalities for many centuries. It is also the quintessential example of bureaucratic inefficiency in everything that it touches. It is directly responsible for our massive tax burden, most of our unseemly and harmful regulations, and is degrading in it’s paternalistic approach to the value of our lives and dignity. It is primarily comprised of the hundreds of government programs that give cash hand outs or cash like benefits to people who jump through the right hoops or meet the right check marks to qualify.
This is only the current iteration. Going back to the American Revolution and even for a while before, some people were debating an idea that has come to be known as a “UBI.” This stands for Universal Basic Income. This is the idea that government can eliminate poverty by simply giving every citizen a certain amount of money without condition that would keep them above the objective poverty line. This idea was tried and ultimately rejected in it’s various forms during this time.
This was for a while the death of welfare. It would return though, in America with the government administration of veteran’s benefits after the civil war. Also in Prussia and the unification of Germany, where many of the modern welfare state type programs would be pioneered. Now after almost two hundred years of experimenting with these mainland European theories of welfare and poverty reduction we are starting to see the debate surrounding a UBI resurface around the world.
This brings me to Mr. Zuckerberg and Mr. Murray. One is the founder of Facebook and a tech mogul. The other is a renowned and somewhat infamous scholar with the AEI among other affiliations. They each have supported the concept of moving welfare in the direction of a UBI and I think it would be useful to talk about their very distinct approaches and methodologies. Then maybe a little commentary of my own on the prospective impact on a UBI.
First let us think about Mr. Zuckerberg’s proposal. You may or may not have heard that he has been touring “fly-over” country this year trying to break out of his bubble. First of all this is exactly the kind of condescending nonsense I despise, but I digress. During this trip he has been talking about job loss and automation with people. He and other tech types like Elon Musk, are convinced the UBI will become necessary as robots and AI technology cause a second even more ground breaking industrial revolution. In Alaska they have something called the permanent fund. This is a reinvestment of state-owned oil money in the markets to create a rainy day resource for future generations of Alaskans. Not a bad idea, on top of which all citizens who qualify receive a dividend from this fun each year. The past few it has been over one thousand dollars and has begun trending towards two thousand dollars per year.
Mr. Murray on the other hand has proposed the (classical) liberalization of welfare in a white paper that was reorganized into a book. The name of the book is “in our hands.” His plan is to scrap all line item welfare programs that practice individual level wealth transfer. Then having done that, redistribute all that tax revenue instead as a condition free wire transfer to all citizens over twenty one with a bank account. He proposed plenty of further subtleties to it, but that is his proposal in broad strokes.
Which plan is preferable? Both have benefits and draw backs. Alaska’s model is not bad at a state level. It is self funded through market investment, which I think is a huge plus. However the capital for it comes from a state corporation that manages a very abundant natural resource. I see this as a huge problem for the same reason that any and all central planning is a problem. Any state sanctioned monopoly or near monopoly is hugely inefficient and susceptible to corruption, that is just settled science. On the other hand, Mr. Murray’s proposal is funded through already existing income and payroll taxes. I am of the opinion that these tax are functionally identical to government slavery, as they represent our hourly wages and salaries being directly taken without consent by the government.
So there are huge problems with both ideas to fund them. Let’s instead look at results. I don’t think the Zuckerberg/Alaska model scales up efficiently. There are plenty of expoitable resources but putting such large sectors under direct government control is an absurd idea. The amount however isnt much and would need to be used to supplement existing welfare, which would only make the system more complex and burdensome. It would get out of control fast. The Murray plan however doesn’t need new revenue or scaling, it is all already there in the federal budget. As requirement for it, that it would also end the traditional welfare state the efficiency/administration problem is solved in a way that libertarians like myself can be quite satisfied with.
Which ever path we end up taking, the need is clear. If the results of robotic and computer automation are even half as dire as predicted it will be absolutely necessary. By instituting it however we can also give ourselves one of the greatest gifts conceivable. This will be the necessary true income floor to then launch and pursue any educational or creative project we desire. This will give us the ability to create and learn like we haven’t had since the days of direct patronage. If you want to paint you will have the economic freedom to do so. If you want to sing, you will have the economic freedom to do so. If you want to read, study, and learn the rest of your life you will not have to fear poverty as you expand your library. The economy will be entirely based on the free pursuit of our creative and intellectual pleasures, and that could only ever be a net good.