Great article.
Michael Haupt

What are the alternatives?

In six words: Universal Basic Income (UBI) and Single Payer.

Single Payer we all know. Americans pay double on health care what anyone else in the world pays. With Single Payer you pay less insurance premiums and more taxes. Health care costs are reduced by the government’s immense leverage in negotiations and by reducing the paperwork doctors must do. (Edit: I later learned that Singapore has a neat system that makes it among the world’s cheapest. It is not single-payer but has elements that both conservatives and liberals can appreciate. I’d happily support this system too, but a half-baked bad imitation of it could harm the poor and not lower costs.)

UBI is more fundamental.

People usually recognize that the dictatorship aspect of communism was bad. They may also realize that the censorship and destruction of civil liberties was bad, too.

But from the perspective of prosperity, an equally important problem was the failure to harness the brain power of the people.

Central planning means that only a few people are making decisions that impact millions of people. One problem with this is that the people at the top don’t have skin in the game. Not only do they lose nothing if they make a bad decision, they may not even know what effects their decisions are having.

But it’s not just that. And it isn’t just that central planning takes away the freedom to make decisions from others.

The worst problem in my opinion is that it wastes the collective intelligence of the people. Capitalism, too, involves a lot of waste — there’s a lot of duplication of effort between different companies as they hide their research results and trade secrets from each other, and use patents and copyrights to prevent re-use of things. But at least it’s sometimes effective at distributing decision-making among lots and lots of people. Each person can use his or her intelligence to pick solutions to the problems over which they have responsibility or control. It’s certainly not perfect, as “peons” in large companies may be fully aware of problems in a company and how to fix them, while the management may not care to listen. But each company is a chance to do things right, and as long there aren’t monopolies dominating markets, then many of these chances will exist, and somebody will probably do things right. (In monopolized markets like internet access, chances are that no one is doing it right. Why bother? Raise prices, profit. Easy.)

UBI is free money that brings everyone up to the poverty line, or near the poverty line. It comes in every week, always the same amount, rain or shine, job or no job. UBI would make it easier to form different kinds of companies, ones that aren’t based mainly on profit, but on goals instead. For example, the goal of my own organization is to promote something that traditional tech companies have mostly failed at: interoperability between programming languages. But I haven’t figured out how to get any funding for it.

Whether it’s your phone’s non-ability to exchange data with your laptop (directly, without the data going through a data center in Sweden), or your iPhone’s non-ability to run Android apps, or Facebook’s non-ability to talk with Skype, interoperability in general is in short supply in capitalism, because most of the time it would cause big companies to lose money, and only rarely does it help a company make a profit. Remember, too, that the internet and the web were not invented by capitalists. Interoperability isn’t that hard; if two systems can’t talk to each other, there’s usually a business reason.

If you look carefully, you can probably see other problems that capitalism alone isn’t solving — homelessness, crime. Many of the problems we do solve sidestep capitalism and rely on volunteerism: raising children, mentoring programs, authoring free courses and educational materials, fundraising for charities, awareness-raising programs, and volunteer research programs. UBI simply acknowledges that these things have value.

Universal Basic Income reduces government bureaucracy and doesn’t replace capitalism, so it is more palatable to conservatives than socialism. That’s important in a divided country. It simply gives the freedom to every person to do as they choose, to use their intelligence and abilities as they see fit. If they want lots of material things, they can enter the capitalist rat race or become an entrepreneur (it’s easier to become an entrepreneur if failure doesn’t include the risk of starvation). But if they just want a better world, they can opt out and live a simpler life — either to improve the world as I want to do, or to sit on the couch and veg.

That last possibility, of course, is what makes people opposed to UBI. UBI pilot programs have not shown any tendency for people to drop out of the workforce. Remember that people crave social status, and anyone under UBI would be at the bottom of both the income scale and the social ladder if they become couch potatoes. However, most pilot programs have been 5 years or less, so it’s not clear what would happen on long time scales. Personally, I believe our goal should no longer be full employment, but full automation. In a highly automated world (and by the way, when it comes to things you can afford to buy with UBI, like food, most of what you buy is already highly automated), couch potatoes wouldn’t be mooching off other people — they’d be mooching off robots. The robots don’t mind.

When I propose UBI, I always include a second measure: free moving trucks, or moving vouchers. UBI itself is already an expensive program, so expensive that it requires not only eliminating most other welfare programs, but also tax reforms like eliminating lower tax brackets. Therefore, it’s not practical for the government to give even more money to people in places like New York or San Francisco with extremely high living costs. Instead, I propose a second program to help everyone with moving expenses. If you can’t afford to live where you live, just move somewhere else. The government will cover basic moving expenses, at most once per year. (If you do the math, this program can’t cost more than a small fraction of what UBI costs, even if half the people try fake, fraudulent moves to earn illicit cash.)

UBI is a radical idea that will take time to gain acceptance. Before we get UBI, we could demand UFI first: Universal Food Income. Give everyone enough money to pay for food, perhaps $200 per adult per month. In practice, everyone eats anyway, even jobless people, even homeless people, so UFI isn’t changing the basic economics of anything. UFI just says “let’s stop making people pointlessly jump through hoops to get food”. Let’s take away the worry about how you will “put food on your family”, as G.W. Bush once said. To make sure the money is spent on food, it could be a “food card”, an expansion of SNAP (food stamps).

Perhaps better, we could push for a more affordable UBI that gives people less money. The U.S. federal poverty line is $11,770 for one person — but $15,930 for two. If we simply require people to pair up in apartments, we only need a UBI of $8000 per year ($666/mo.). Even $6000/year might end homelessness in most cases.

I remember being shocked to hear that a local homeless shelter cost over $30,000 per homeless person. Welfare and prisons are expensive too, and refusing to give jobs to ex-cons drives them into crimes of desperation, a.k.a. recidivism. UBI eliminates desperation, and helps people more efficiently than welfare does.