When reforms like a universal basic income are proposed, the right claims they’re crazy. Milton Friedman disagrees!
Monday, Jan 6, 2014
Jesse Myerson has a piece at Rolling Stone detailing five economic reforms he believes Millennials should be fighting for. His proposed reforms are a job guarantee, a universal basic income, a land value tax, a sovereign wealth fund, and state banks. I do not generally care for framing that talks about what Millennials should be fighting for because it does not really make any sense, but the five reforms he lists are basically doable and have been written about here and elsewhere before.
Nonetheless, a massive conservative backlash ensued on Twitter in response to the piece. On some level, this kind of reaction is to be expected. Conservatives prefer our institutions as they exist and the way they distribute power, income, and wealth in society. But the conservative backlash did not center around how they just prefer another system. Instead, it was almost universally premised on the idea that these reforms are fundamentally impossible. This is a popular conservative rhetorical move because declaring impossible all of the things that are so much more appealing than what they have to offer is the only real way to advocate the terrible things they support.
Nonetheless, with the exception of Myerson’s call for a job guarantee, all of the other reforms he proposes—a universal basic income, a land value tax, a sovereign wealth fund, and public banks—are clearly possible because they already exist in the world.
Universal Basic Income
The U.S. already has a basic income system called Social Security. Every month, a check is sent to every qualifying elderly person in the country. The program pulled 22 million people out of poverty last year and overwhelmingly accounts for the 71 percent reduction in elderly poverty we have seen in this country since 1960. It is the most successful anti-poverty cash transfer program in the history of the country. There is no reason why you cannot, at least on some scale, replicate this program in the country as a whole. Just as the federal government can send checks to elderly people each month, it can send checks to everyone else each month.
I think Myerson may overstate how far we can actually push such a program when he suggests we could construct in a way that allows a lot of people to drop out of the formal labor force. Too big of a reduction in the size of the paid labor force would cause a UBI program to descend into a death spiral and unravel. But this a quibble about how big to make the UBI, not with the UBI itself. At some UBI benefit level, the program is entirely doable. To avoid pushing it too far and causing a labor supply death spiral, I have advocated starting such a program at a relatively modest benefit level and then building it up from there.
Although the ignorant but deep bench of conservate Twitter users reacted to this proposal as if it is some sort of manifestly absurd impossibility, conservative superstars Charles Murray, Milton Friedman, and F.A. Hayek have registered support for it in the past.