UBI
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https://www.ft.com/content/a831ae0a-68d9-11e8-aee1-39f3459514fd
In her 2017 campaign memoir What Happened Hillary Clinton revealed that she flirted with, but ultimately rejected, running on a universal basic income (UBI) policy: an unconditional payment by government to every citizen. “Besides cash in people’s pockets, it would also be a way of making every American feel more connected to our country and to one another — part of something bigger than ourselves,” she wrote. “Unfortunately, we couldn’t make the numbers work.” That one of the most centrist US politicians of recent decades suggests she regrets hesitating (she wonders what would have happened if she had “thrown caution to the wind”) reveals much about how this voguish, radical concept has mesmerised policymakers and influential figures of all persuasions — from Facebook chief executive Mark Zuckerberg to Black Lives Matter campaigners, Scotland’s first minister Nicola Sturgeon and former US Democratic presidential candidate Bernie Sanders. Clinton’s flirtation with UBI, which would be paid regardless of whether citizens are in work, to spend on what they like and set at a level that means their basic needs would be covered, sprang from the success of a very limited form of the policy operating since 1982 in Alaska, financed by oil revenues. Versions of the idea are being tried in parts of Finland and planned for Scotland. Its supporters say UBI is a big idea whose time has come. It is an appealingly crisp, radical concept that cuts through the bureaucracy, ethics and looming robot apocalypse of our time to deliver an end to poverty, the monotony of bad jobs, the inequities of the gig economy and all their associated ills at a single stroke. But to its critics, UBI is a quixotic and unworkable way of paying people to do nothing. In Give People Money: How a Universal Basic Income Would End Poverty, Revolutionise Work, and Remake the World, economics journalist Annie Lowrey plunges headlong into these complexities. She emerges firmly in favour of UBI. As Lowrey says, UBI is such a “mind-bending policy” that it merits careful and clear-eyed consideration. Seminal ideas often follow crises: Roosevelt’s New Deal programme of public works was a response to the Great Depression of the 1930s; Britain’s welfare state followed the second world war. The financial crisis of 2007-08 has yet to bring its own form of radical reconstruction. Lowrey is certainly diligent. She travels to Kenya, where a plucky US non-profit called Give Directly, set up by Harvard University and Massachusetts Institute of Technology graduates, is conducting a UBI experiment by giving villagers previously living on 60 cents a day substantial, unconditional payments via mobile phones. She visits rural India, where she “embeds” herself with researchers who are trying to establish whether UBI stands a chance of living up to its promise, versus the variable results of government subsistence programmes. She visits Maine to meet Americans locked in poverty and homelessness because they fall outside the current welfare system. She gazes across the demilitarised zone between North and South Korea, where she ponders the “stark” contrast between poverty and wealth. It is, she concludes, visible evidence of the “profound life-and-death power of our choices when it comes to government policy”. All these trips lead her to the same conclusion: UBI is workable — we just have to want it badly enough. An Oklahoma family in 1938 during America’s Great Depression © Getty Lowrey is honest, too, about the objections — chiefly moral ones: Americans, she notes, abhor programmes they see as allowing people a free ride, like food stamps and welfare. So do many Europeans. Work is a virtue embedded in tax structures. UBI would be unpopular, both among those resentful that their taxes were being passed to layabouts and recipients who would rather take the dignity of work. Recommended FT Podcast Business Book podcast: radical ideas for the future But she also correctly identifies what makes UBI so romantically appealing to its cheerleaders, from the far-left to Silicon Valley’s libertarians: “It contains within it the principles of universality, unconditionality, inclusion and simplicity, and it insists that every person is deserving of participation in the economy, freedom of choice and a life without deprivation.” Less romantically, another objection is that UBI is expensive — many say unaffordable. And where Lowrey is less convincing — almost breezy — is on the hard costs. Providing, say, $1,000 a month to every American, she says, would mean spending an additional $3.9tn a year. If fully financed with taxation, it would mean heavy tax rises for high and middle-income earners, which she dismisses as unthinkable. Poverty in Portland, Maine, in 2017 © AP But the problem is moot, she says, because the $2.7tn the US government spends on programmes such as Medicaid and Medicare benefits for veterans could be trimmed as UBI would be paid in lieu of benefits and people would have the means to pay for more themselves. Food stamps and welfare programmes could be eliminated. Other suggestions for covering the cost of UBI include taxes on carbon, financial transactions, inheritance and even on robots. Where Lowrey is less convincing is on the hard costs of a UBI And, as she points out, people would have the means to spend more on goods and services that would ultimately contribute to prosperity. In the Kenyan project, many villagers chose to spend their UBI on income-generating assets such as livestock and motorbikes. The obvious problem is that many people — particularly disabled, ill, young and old people — have more complicated, and more expensive, needs than others. That is why welfare systems are complex. As Lowery envisages it, UBI would dole out the same cash to a disabled veteran as it would to billionaire Warren Buffett. Breezier suggestions to make up the shortfall include slashing the defence budget, “particularly if the next war were fought with hackers rather than tanks”. Perhaps losing patience with numbers, she concludes UBI is “more a matter of will than mathematics” and that if they wanted to, governments could simply put up with a deficit as a price worth paying. The way things are, she decides, is the way we choose for them to be. Like UBI, the book is ambitious, and it presents a strong case for cash aid. At the heart of Lowrey’s argument is the notion that poverty can be reframed. It is a seductive idea, but just like Clinton’s campaign, it lacks conviction on the data. Give People Money: The Simple Idea to Solve Inequality and Revolutionise Our Lives, by Annie Lowrey,
https://www.ft.com/content/a831ae0a-68d9-11e8-aee1-39f3459514fd
In her 2017 campaign memoir What Happened Hillary Clinton revealed that she flirted with, but ultimately rejected, running on a universal basic income (UBI) policy: an unconditional payment by government to every citizen. “Besides cash in people’s pockets, it would also be a way of making every American feel more connected to our country and to one another — part of something bigger than ourselves,” she wrote. “Unfortunately, we couldn’t make the numbers work.” That one of the most centrist US politicians of recent decades suggests she regrets hesitating (she wonders what would have happened if she had “thrown caution to the wind”) reveals much about how this voguish, radical concept has mesmerised policymakers and influential figures of all persuasions — from Facebook chief executive Mark Zuckerberg to Black Lives Matter campaigners, Scotland’s first minister Nicola Sturgeon and former US Democratic presidential candidate Bernie Sanders. Clinton’s flirtation with UBI, which would be paid regardless of whether citizens are in work, to spend on what they like and set at a level that means their basic needs would be covered, sprang from the success of a very limited form of the policy operating since 1982 in Alaska, financed by oil revenues. Versions of the idea are being tried in parts of Finland and planned for Scotland. Its supporters say UBI is a big idea whose time has come. It is an appealingly crisp, radical concept that cuts through the bureaucracy, ethics and looming robot apocalypse of our time to deliver an end to poverty, the monotony of bad jobs, the inequities of the gig economy and all their associated ills at a single stroke. But to its critics, UBI is a quixotic and unworkable way of paying people to do nothing. In Give People Money: How a Universal Basic Income Would End Poverty, Revolutionise Work, and Remake the World, economics journalist Annie Lowrey plunges headlong into these complexities. She emerges firmly in favour of UBI. As Lowrey says, UBI is such a “mind-bending policy” that it merits careful and clear-eyed consideration. Seminal ideas often follow crises: Roosevelt’s New Deal programme of public works was a response to the Great Depression of the 1930s; Britain’s welfare state followed the second world war. The financial crisis of 2007-08 has yet to bring its own form of radical reconstruction. Lowrey is certainly diligent. She travels to Kenya, where a plucky US non-profit called Give Directly, set up by Harvard University and Massachusetts Institute of Technology graduates, is conducting a UBI experiment by giving villagers previously living on 60 cents a day substantial, unconditional payments via mobile phones. She visits rural India, where she “embeds” herself with researchers who are trying to establish whether UBI stands a chance of living up to its promise, versus the variable results of government subsistence programmes. She visits Maine to meet Americans locked in poverty and homelessness because they fall outside the current welfare system. She gazes across the demilitarised zone between North and South Korea, where she ponders the “stark” contrast between poverty and wealth. It is, she concludes, visible evidence of the “profound life-and-death power of our choices when it comes to government policy”. All these trips lead her to the same conclusion: UBI is workable — we just have to want it badly enough. An Oklahoma family in 1938 during America’s Great Depression © Getty Lowrey is honest, too, about the objections — chiefly moral ones: Americans, she notes, abhor programmes they see as allowing people a free ride, like food stamps and welfare. So do many Europeans. Work is a virtue embedded in tax structures. UBI would be unpopular, both among those resentful that their taxes were being passed to layabouts and recipients who would rather take the dignity of work. Recommended FT Podcast Business Book podcast: radical ideas for the future But she also correctly identifies what makes UBI so romantically appealing to its cheerleaders, from the far-left to Silicon Valley’s libertarians: “It contains within it the principles of universality, unconditionality, inclusion and simplicity, and it insists that every person is deserving of participation in the economy, freedom of choice and a life without deprivation.” Less romantically, another objection is that UBI is expensive — many say unaffordable. And where Lowrey is less convincing — almost breezy — is on the hard costs. Providing, say, $1,000 a month to every American, she says, would mean spending an additional $3.9tn a year. If fully financed with taxation, it would mean heavy tax rises for high and middle-income earners, which she dismisses as unthinkable. Poverty in Portland, Maine, in 2017 © AP But the problem is moot, she says, because the $2.7tn the US government spends on programmes such as Medicaid and Medicare benefits for veterans could be trimmed as UBI would be paid in lieu of benefits and people would have the means to pay for more themselves. Food stamps and welfare programmes could be eliminated. Other suggestions for covering the cost of UBI include taxes on carbon, financial transactions, inheritance and even on robots. Where Lowrey is less convincing is on the hard costs of a UBI And, as she points out, people would have the means to spend more on goods and services that would ultimately contribute to prosperity. In the Kenyan project, many villagers chose to spend their UBI on income-generating assets such as livestock and motorbikes. The obvious problem is that many people — particularly disabled, ill, young and old people — have more complicated, and more expensive, needs than others. That is why welfare systems are complex. As Lowery envisages it, UBI would dole out the same cash to a disabled veteran as it would to billionaire Warren Buffett. Breezier suggestions to make up the shortfall include slashing the defence budget, “particularly if the next war were fought with hackers rather than tanks”. Perhaps losing patience with numbers, she concludes UBI is “more a matter of will than mathematics” and that if they wanted to, governments could simply put up with a deficit as a price worth paying. The way things are, she decides, is the way we choose for them to be. Like UBI, the book is ambitious, and it presents a strong case for cash aid. At the heart of Lowrey’s argument is the notion that poverty can be reframed. It is a seductive idea, but just like Clinton’s campaign, it lacks conviction on the data. Give People Money: The Simple Idea to Solve Inequality and Revolutionise Our Lives, by Annie Lowrey,
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