The Ripon Forum

Volume 52, No. 2

April 2018

If You Like Big Government, You’ll Love the UBI

By on April 24, 2018

by AARON M. RENN

It’s practically a truism that something that sounds too good to be true probably is. That goes double for the idea of providing people with a universal basic income (UBI).  Talk about big government: almost by definition, a UBI would vastly increase taxes and government spending because it would require an enormous redistribution of income.

For example, one proposal, by Philippe Van Parijs and Yannick Vanderborght in their book Basic Income, would consume about 25% of the GDP.  That’s more than the entire federal budget today.[1]  UBI is often touted as a replacement for various welfare programs.  But that doesn’t include things such as government-provided health care and various other benefits. Depending on how it’s structured, UBI could be a floor rather than a ceiling on government benefits.

As with all big government, the risks of UBI have as much to do with freedom as finances. While it might seem like the federal government would simply be a pass- through entity for UBI, having a significant chunk of every American’s income coming in the form of a government check introduces enormous potential for tyrannical government abuse.  As Hayek famously pointed out in The Road to Serfdom, if the government controls how you get a living, they control you period.

Almost by definition, a UBI would vastly increase taxes and government spending because it would require an enormous redistribution of income.

Consider the obvious threat to free expression. We have a constitutional right to free speech. Yet on college campuses today, including public colleges, agitators routinely – and, too often, successfully – attempt to prevent conservative speakers from having a platform to speak. They often explicitly argue that “hate speech” – meaning any speech they disagree with – is not entitled to free speech protection or that it even constitutes violence. It takes no imagination at all to see that these same groups would fight to strip people with the wrong sorts of politics of their UBI benefits.

Just as colleges are staffed with administrators amenable to the desires of student protestors, so, too, is the federal bureaucracy. All they would need to do is create an “extremism” exception, then apply it to an ever greater range of opinions they don’t like. Traditionally this was not a problem, which is why it has not come up for programs like Social Security. But the no-platforming movement is just getting started, and is already having success in the commercial world outside of academia. It’s a risk we shouldn’t take.

Silicon Valley disrupters and leftist utopians are the biggest backer of UBI. Yet their track records of unintended consequences speak to the risk of a radical social change like UBI. For example, Facebook’s Mark Zuckerberg is a proponent of UBI, but his own company became a platform for Russian propaganda and improperly shared your private information with outside marketing firms, among other abuses. Why would providing people with a UBI also not have many negative unforeseen consequences? And Zuckerberg’s failed $100 million schools experiment in Newark is another reason to think he’s not a great person to be taking policy advice from. What’s more, Silicon Valley firms are already among those aggressively banning people from their platforms over politics, highlighting again the risk to freedom posed by UBI.

There are also reasons to believe that UBI could actually be counter-productive towards its stated aims. Some American Indian tribes already have a de facto UBI – as high as $100,000 per year – from the distribution of casino gambling proceeds. The Economist magazine looked at this and found “as payment grows, more Native Americans have stopped working and fallen into a drug and alcohol abuse lifestyle that has carried them back into poverty.”

And once a UBI is established, no matter how big a failure it might prove to be, reforming or eliminating it would be essentially impossible politically.

And once a UBI is established, no matter how big a failure it might prove to be, reforming or eliminating it would be essentially impossible politically. Already today, every proposed rollback of some social benefit — no matter how modest — is greeted with hysterics.  With every single American collecting a UBI, there doesn’t appear to be any way to ever undo it, even if it turned out to be catastrophic. Unlike with a Silicon Valley startup, there’s no ready way to “pivot” from a failed UBI.

A UBI would also trigger mass migrations from countries where incomes are lower than any American UBI amount. Even some of the biggest UBI boosters like Van Parijs and Vanderborght admit that a restrictionist immigration policy would be required, and that undocumented migrants must be excluded from UBI benefits. Given the commitment to a de facto open borders policy by political elites of both parties, this makes UBI a non-starter in the U.S., unless Americans want to step up to pay the freight for anyone in the world who wants a slice of the action.

In short, it shouldn’t be a surprise that the UBI is backed by people who have mottos like “move fast and break things” and a dubious commitment to political freedom. America should stay far away from their UBI scheme.

Aaron M. Renn is a Senior Fellow at the Manhattan Institute for Policy Research.

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[1] See: https://fred.stlouisfed.org/series/FYONGDA188S

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