Universal basic income (UBI), freedom dividends, permanent fund dividends, guaranteed income … these are all names that have been used over the past 200 years to describe the same essential policy proposition: to provide a permanent income to citizens from their government. This topic has received much renewed attention lately. Popular outlets such as the Wall Street Journal and the New York Times have been publishing pieces on it regularly; news programs on Fox, MSNBC, and CNN have covered it; and both popular books and many scholarly articles have been written about it.
In each of these discussions, the same fundamental questions are addressed: How much would UBI pay people? Will everyone qualify for UBI or only some people? How much will it cost? Will it replace existing welfare programs or supplement them? In other words, the practical aspects of putting in place such a policy has been where the emphasis has been laid.
What’s been missing is all such discussions is something more fundamental: what a universal basic income is and not merely how it would work. It seems obvious, but it’s not. And most of the information out there now is clearly an attempt to convince someone of the author’s already arrived-at political and economic position. Virtually nothing takes up the task of merely explaining, in plain language, what a universal basic income program actually is, what its merits or advantages are, what its drawbacks are, and its history. For instance, is this an idea whose time has come within our generous capitalist system or is it merely socialism under another name, as some have suggested? Thankfully, this growing need has been filled by Matt Zwolinski and Miranda Perry Fleischer in their new book, Universal Basic Income: What Everyone Needs to Know, published by the prestigious Oxford University Press.
The book is quite simply a tour de force. It’s clear, concise, and can easily be digested by anyone sufficiently curious: no academic background in economics, social science, or politics required. And despite being divided into 66 chapters (you read that right—66 chapters), each is on average only about three pages long, with one (chapter 54) being a single page in length. And each of these chapters is arranged into seven parts along easy-to-follow thematic lines.
When I received my copy to review, I scanned the TOC and was initially put off: “Chapters that are only one-to-five pages long? Surely, they can’t go into any depth or develop any substantive insights in so few pages!” I was wrong. Each chapter is not only concise but highly informative because it’s laser-focused. For example, if you want to know whether a universal basic income will cause inflation, you need only turn to chapter 55 for a discussion on that. Will children be eligible for UBI? Check out chapter 14 for the pros and cons of that idea. The organization of the book is, as it turns out, refreshing. You can sit down and enjoy an enlightening read cover to cover in one sitting, or you can squeeze in a few chapters between more mundane tasks. I was able to read two chapters at a doctor’s appointment.
Despite the quirky format, I’m now far more aware of the nuances to the various UBI policy proposals than I was before picking up the book. For example, the authors begin by noting, “a lot of confusion about the concept of a UBI results from people talking about it as though it was a single, precisely defined policy proposal. We think it’s more helpful to think of the UBI as a family of proposals” (emphasis original). They then list three common elements all UBI proposals share:
- They involve unrestricted cash transfers.
- These cash transfers are unconditional.
- They are universal, in that everyone qualifies.
It’s useful to discuss these in more detail. A UBI as an unrestricted cash transfer means that the government is simply transferring cash into the hands of every citizen—that’s it. If we compare this to the current welfare system, as the authors do, we can already see a stark difference. Consider electronic benefit transfers (EBTs). In the current system, the government decides 1) who is eligible to receive benefits, 2) how many dollars those people receive, and 3) what they’re allowed to purchase with those dollars. There is tremendous potential for cronyism at each of these steps. For example, did you know that you can buy iced coffee with EBTs but not hot coffee or cold chicken, and not hot, ready-to-eat roasted chicken? Where is the line between “cold” and “hot” anyway?
And consider Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) benefits: “For some items—such as yogurt, cereal, and pasta—only specific brands are eligible” (pg. 81).
The list of welfare programs is too long to go through exhaustively, but if you think through those three questions above for each one, you’ll quickly find that cronyism pervades our current welfare system to an alarming degree.
As an unconditional cash transfer, a UBI would reduce the scope for cronyism by eliminating the government’s ability to set criteria by which a person could receive aid. What does it mean to be “unemployed”? What does it mean to be “in need”? How much income is “enough,” and is it context specific? These are all questions that must be addressed through policy, and therefore by government, under our current welfare system. In a world where capricious policymakers can change the rules nearly on a whim, cronyism is almost inevitable. But by making the cash transfers unconditional, this possibility is completely mitigated.
Finally, consider the universality of a UBI. This is the one aspect that even the authors balk at. As they note on page 8: “A UBI that gave money to everybody would either be so expensive as to be unmanageable, or so small as to be practically useless to the people who need it most.” This is probably the weakest part of the book: the authors contend that universality is a central theme of all UBI proposals … but then write that “while most proponents of a UBI say that eligibility for the grant is not dependent on income or wealth, we’ll let you in on a little secret: nobody really means this” (emphasis original).
The authors go on to discuss several different means tests by which to limit benefits to certain individuals or households. These can be done on the front end, in the sense that the government only sends payment to, say, households below a certain income threshold. Or it can be done on the backend, where the government sends a check to everyone but then taxes it away from certain households—e.g., those above a certain income threshold. As the authors note, these are both “still universal in a sense. But also, sort of, not really” (emphasis original).
When cast in the light of “reducing cronyism,” I’m not sure whether the discussion in Universal Basic Income merely confirmed my previous beliefs that a UBI would not be helpful or if it changed my mind, in that now I think it would. In this way, the discussion throughout the book (especially part 3) reminds me of Dr. Michael Munger’s distinction between directionalism and destinationalism. As for reducing cronyism, it is clear to this author that a UBI that supplanted the current welfare system would be a move in the direction toward reduced government and cronyism and more liberty, even if it is not the ultimate destination that I and others might like to see. After all, wouldn’t a welfare system that was cheaper and more effective be preferred to our current expensive and ineffective system? When asked this way, the answer seems obvious. But is that a powerful enough argument to support such a policy? I’m not sure.
If asked whether I support a UBI now, I can’t give a soundbite answer, other than, “It depends.” This book deserves full credit for this, as it helped me develop a much greater understanding of both sides of the debate, especially compared to the clearly biased presentations (on both sides) that pervade the discourse on this topic.
The book, in fact, is a great exemplar of what both John Stuart Mill and Frédéric Bastiat have addressed in this regard. Mill writes in On Liberty:
He who knows only his own side of the case knows little of that. His reasons may be good, and no one may have been able to refute them. But if he is equally unable to refute the reasons on the opposite side, if he does not so much as know what they are, he has no ground for preferring either opinion. … Nor is it enough that he should hear the opinions of adversaries from his own teachers, presented as they state them, and accompanied by what they offer as refutations. He must be able to hear them from persons who actually believe them … he must know them in their most plausible and persuasive form.
In his book Economic Sophisms, Bastiat, writing perhaps more tidily, says, “The worst thing that can happen to a good cause is, not to be skillfully attacked, but to be ineptly defended.”
Regrettably, this sort of thinking seems to be nearly lost in today’s world of strict ideological division. Think back to the discussion surrounding the Affordable Care Act. Those who opposed it were vilified as not caring about poor people, of deliberately wanting to prevent people from receiving healthcare, and actively trying to increase the amount of real suffering that Americans experience. These accusations were clearly false but unfortunately passed for “discourse.”
It should be noted that Zwolinski and Fleischer do not hide their stance on a universal basic income. They state clearly in the book’s introduction that they “are on the record as supporting a UBI, all-things-considered.” But what follows is a comprehensive exploration of a universal basic income that both Mill and Bastiat would approve of and, dare I say, hold up as a paragon of what we should all aspire to do.
Some may quibble and accuse the book of insufficiently glossing over important topics. For example: Can all the concerns over the expense of a universal basic income really be addressed in a mere page and a half, as chapter 48 attempts, and with only one footnote directing the reader to a single law-review article? Probably not, at least if you don’t seek out that one article, which is itself 86 pages long and contains hundreds of citations. But if the book were to treat the questions in each chapter exhaustively, it would fail to achieve its goal, which is, in the authors’ words, to be as “useful and as flexible a resource as possible.”
In the end, Universal Basic Income provides a fair and balanced explanation of an important topic. It does so by using clear and concise language accessible to all in a way that is a joy to read. I sincerely hope this book finds a wide audience, as it will help anyone be better informed about this issue. But my hope goes deeper than that. I also hope that people see this book for what it is: a beautiful example of exactly what Mill and Bastiat challenge us to do. We must seek fair and honest understandings of not just our own positions but of those with whom we disagree. Doing so would not just be good for us as individuals—it would be good for our society.