Universal Basic Income: Good or Bad for Freedom?
The Universal Basic Income (UBI) takes many shapes and forms, but basically it is an economic scheme where every citizen would be guaranteed a certain wage even if they aren’t working. Some models call for this to be in addition to current welfare programs and others look to replace those programs out right. From a libertarian perspective, there are positive and negative aspects of a UBI.
On the positive side, a UBI is better for giving individuals more control over their own lives and getting bureaucrats out of the way. Instead of using the current welfare program to dole out certain benefits and the ensuing bureaucratic infrastructure required to run these programs, people would simply receive a check and they can use it to buy what they need. This satisfies one of five core principles of Operation Libertas, Individual Responsibility. In this sense, a UBI moves the needle closer to freedom and is more liberating than our current welfare structure. However, it is a very small step in the direction of freedom and will have unintended consequences for the most well intentioned bureaucrat and terrible consequences for bureaucrats and politicians who would exploit the increased political power.
Unfortunately, the negatives are plenty. A UBI does not meet the principles of non-aggression, free markets, limited government, or voluntary charity. The people calling for a UBI typically work in industries that are heavily automated or are invested in automation. They are pushing this agenda for two reasons. First, its good for public relations. Second, they want to use the government to protect their industry and investments.
Proponents of a UBI are looking down the road and realizing that people are going to be upset about technologies that replace humans and the investors want to protect their investment. So they are working the PR angle to tell people, “Hey, automation is coming and we want to protect you when the robots steal your jobs.” This sounds well intentioned. But then I think about how tractors made life easier for people on the farm. For thousands of years, the majority of the world’s population worked in agriculture. But then the tractor destroyed a lot of these jobs and now the majority of Americans work outside of the agricultural sector. People didn’t stop working. They found new jobs and activities and were freed up to do even more productive activities that have led to the explosion of wealth around the world. Therefore, replacing humans with machines will not mean less opportunities for people.
The second reason these industries are pushing for a UBI is to use government to protect their industry. Currently, it is much cheaper for a company to hire employees than it is to make their entire assembly line automated. Robotic technology and automation are expensive. If you’re trying to sell expensive automated technology you need to find a way to make labor more expensive so your industry has a competitive advantage. As an example, lets say that the minimum Universal Basic Income is $3,000 per month. You will get paid $3,000 every month under this system for doing nothing. Would you then go to work full time for $4,000 a month? You would now be working 40 hour weeks for an extra $1,000. You’re probably not taking that deal. So what would it take to get you to go to work? Maybe $5,000-$6,000 a month will do it. Simply because you have told people they will make a basic level of income no matter what, the cost of labor will skyrocket.
Free market factors will still be used to identify what is most cost effective between the more expensive labor and the now relatively cheaper cost of automation. The only problem is, this isn’t a free market. Under this example the government has dictated the price of inactivity, de-incentivizing work, and thus making it more expensive to hire people. Now those investors of automation have manipulated the system to give their product a comparative advantage. These people aren’t stupid. They are thinking and planning long term.
As briefly mentioned earlier, the most revolutionary technology in history was arguably the tractor. This technology destroyed jobs that an overwhelming majority of the world population had held for thousands of years. But instead of everyone losing their jobs and having nothing to do, completely new industries were formed and there has been an explosion of wealth and an increase in the standard of living for people all across the world. Imagine if 126 years ago, after the invention of the tractor, people who worked on the farm were told they would be paid to compensate for their loss of a job. Who would have been left to create all the amazing technologies we have developed since then?
Job destruction is one of the most powerful forces leading to the spread of wealth and increasing standards of living. This sounds counter-intuitive, but it reminds me of the prevalent industries in Iraq and Syria during my time in those countries. There were a lot of farmers, herders, and cement block factories. Those are the jobs you get when you protect industries and don’t allow for job destruction. Compare that to the slightly more liberal Turkish regime where I saw major factories all over the place. Even moving slightly closer to liberalization can have a significant impact. That is why I am much more optimistic about the future of jobs than the pro-UBI crowd would have us believe.
There are too many negative aspects of a Universal Basic Income system which move the political needle away from liberty to make up for a couple points that look positive on face value. We need to keep focused on the UBP (Universal Basic Principles) of non-aggression, free markets, limited government, personal responsibility, and voluntary charity.
