What if I told you there was a program that was simple to implement, affordable, backed by mountains of research, has supporters from across the ideological spectrum, and would make strides addressing many of today’s problems, including financial security, healthcare access, AI fears, affordable housing, crime, abortion, mental health, poverty, and educational attainment?
Sure buddy. Does it also cure cancer and make kale taste like bacon?
Oh! Thanks for the idea. It wouldn’t cure cancer, but it’d very likely make a dent in the overall rates.
Yeah ok. Pull my other leg. It has bells on it.
And fair enough. Most people don’t buy it when they first hear about it. But if you can promise an open mind, I promise I’ll get you from “no way” to “hmm… maybe…”
A Note Before We Start
Enough people write about how the sky is falling. This newsletter is about what’s possible when we dream big and think long-term.
It’s also part of my New Year’s Resolution to write 500 words per day, every day. I have no idea where this journey will take me, but it would mean a lot if you subscribed and followed along. I can promise plenty of optimism.
The Problem We All Face
Econ 101 teaches the concept of voluntary exchange. When people trade, it’s because both believe they’ll benefit.
With this organizing principle, we cooperate and build our shared superabundant world. The idea underpins capitalism, and has merit.
But a dark passenger haunts these “consensual” exchanges.
Are we truly volunteering if – by saying no – we risk our security? Are we truly free?
The Solution
Universal basic income.
Guaranteed regular payments for every person, regardless of any condition, large enough to cover the bare necessities of life. Kind of like the Trump Bucks stimulus checks we got during the pandemic, except they come once a month rather than after Mitch McConnel woke up from his nap on the “no” button.
Ambitious, right? But the more you think about it, I promise, the more it will make sense.
Keep in mind:
This isn’t just another policy designed to help “the poor”
This isn’t about charity or handouts for the less fortunate
This isn’t a welfare program
Universal basic income for everyone. Including you.
Supporters From All Over the Political Zoo
The US is divided on party lines these days, so let’s clarify that this isn’t a left vs right issue. If it were, famed leftist and accused-communist Martin Luther King Jr and infamous conservative and full-throated capitalist Richard Nixon would disagree.
Yet they concur.
For some reason, schools don’t teach how MLK hoped to achieve his vision for equality. Instead, we say “I have a dream” and leave it at that. But there you have it! This is a quote from the last book he published. Basic income was the plan.
That’s from a speech Nixon gave to Congress explaining his Family Assistance Plan. In modern money, that’s about $12,000 a year. And believe it or not, he nearly succeeded! FAP made it to a vote in the Senate, with the tie-breaker killing the bill being cast by a Democrat. History is strange like that.
Also, yes. FAP.
Nixon named his plan FAP.
Which makes me giggle. Anyway…
MLK and Nixon had different motivations, and would have debated the details, but they agreed that no one in a wealthy society should live in poverty, and direct financial support could provide dignity and opportunity without destroying the workforce.
Those aren’t the only two strange bedfellows. Put everyone who supports a variant of universal basic income in a room together, and there’d definitely be a fight.
Here’s a selection:
ElmoElon MuskAlexandria Ocasio Cortez
Joe Rogan
Bernie Sanders
Margaret Thatcher
Milton Friedman
Pope Francis
Sam Harris
Mitt Romney
Allan Watts
Sam Altman
Neil deGrasse Tyson
So whoever you are, whoever you vote for, whether you believe in god, whether or not you smoke weed, and whether you’re a socialist or capitalist, you shouldn’t discount basic income because of those or any other political identities. The idea is unique and deserves to be evaluated on its own merits.
Why Universal Basic Income?
When I think of UBI, I think of this tweet.
Modern life is stressful enough, and a little help can go a long way.
Just ask yourself: How would an extra $500 a month improve your life? Or $1000?
I can’t answer for you, but the science hippies have done tons to explore that question in general. The results are in.
After hundreds of experiments, which gave small ($100s) to modest ($1000s) sums of money over the course of months to years, we learned that lives get better.
I’m not sure we really needed to do that research. It’s kind of like testing if having friends makes you less lonely. But now we know!
If you’re curious, though, Scott Santen, a leading basic income advocate and researcher, compiled a list of how people’s lives improve with basic income:
Savings go up, debt goes down
Homeownership rate increases
Trust in politicians, and other people, increases
Domestic violence decreases
Crime goes down
Hospitalization rates go down
Graduation rates go up
Maternal nutrition improves; newborn birth weights increase
Maternity leaves are extended
Alcohol and tobacco use decreased
Still, there are tons of policies that could improve lives. Why should we start with basic income above all others? Ben Spies-Butcher, political economist and co-founder of the Australian Basic Income Lab, explained it this way:
Economic insecurity is a big reality for lots of people.
I’m a social policy scholar, so among other things, I look at what governments can do to reduce that. And actually, I used to be relatively skeptical of basic income.
You have lots of people who just don’t have enough money. Almost everyone knows that’s true. But when you sit around and talk about how you could adjust welfare means tests and pay rates and tapering, almost no one is interested. But when you talk about basic income? You have 300 people under the age of 30 who turn up. It’s a completely different conversation.
What convinced me is that, if we’re going to have a serious debate about this, framing it through the lens of basic income, about giving people freedom to make choices in their life and a proper foundation to be able to make those choices, was something that connected in a way more technical debates just don’t.
Even if we don’t get all the way there, if we want to make the system better than it is, using basic income as a frame for what’s right and wrong is maybe a better way to do it.”
In short?
Basic income connects with people in a way the technical targeted conversations just don’t. People get involved in their democracy, and that’s a big deal.
Maybe we get all the way there, maybe we don’t, but by anchoring the discussion to something as revolutionary as universal basic income, we’ll get further than if we thought small.
Why Now?
There are a lot of reasons. I’ll stick with a handful:
The power to say no
Job loss from automation and AI
Superabundance: we certainly have enough to go around
Economics: if everyone has more money, businesses have more customers
The Power to Say No
Karl Widerquist, another leading basic income researcher and economist, said it more eloquently than I can:
“An economy where income starts at zero is what we have now, and that is a cruel economy. Except for the most wealthy, we all start in the default position where we must get a job to survive. We have an economy where we all must work for somebody higher on the economic scale than we are.
Basic income is the power to say: if you want me to work, you’re going to have to make it worth my while. It’s the power to say no.”
That’s a world where Amazon workers don’t pee in bottles, parents can stay home if their child gets sick, and creatives don’t have to churn out clickbait just to pay the bills.
Wouldn’t it be nice?
Really though. That creative is me.
He writes clickbait SEO tax stuff.
He’s good at it. But. You know.
Save me.
Job Loss from Automation and AI
We’ll need a universal basic income to soften the transition.
Plenty of prominent economists argue that automation will be a net good. Much like the Industrial Revolution made horses obsolete, we’ll eventually be better off because more stuff for less money is better for everyone.
That may be true. Eventually. Maybe. But if robots do most jobs, how are we supposed to live?
People gain access to the economy via their contributions. There are already too few middle-class jobs to go around, and automation can only make that worse. Blue-collar jobs are already being phased out, and AI is on the way to taking white-collar jobs.
Who knows how long we have left?
Crap.
Not long, apparently.
Anyway, I’m not convinced those economists have a leg to stand on. When the US outsourced manufacturing to China, we hollowed out our own economy.
Then, we started importing that cheap stuff and opened Povertymart Walmarts everywhere. The result? Study after study shows that communities stagnated when the big box giant moved in.
And will there really be a difference between cheap overseas labor and cheap robot labor?
Probably not.
Basic income would help.
Superabundance
Modern economists cling to scarcity as if we’re still rationing butter during World War II.
They say resources are limited, choices must be made, and tradeoffs are inevitable. But does anyone truly believe we don’t have enough of the basics to go around?
I mean, just look at how absurdly companies act to keep the money flowing:
Apple throttles old iPhones to force people onto the newest model.
Light bulb companies invented planned obsolescence because their product lasted too long.
Credit card companies throw 0% APR credit cards at us like candy, begging us to spend money.
Auto dealers offer cash-back, 7-year loans, and zero-interest financing just to move cars off the lot.
Fast fashion brands pump out low-quality clothes, banking on wardrobe turnover to keep sales moving.
Modern appliances don’t last nearly as long as their 1950s counterparts, and there’s no way that’s a coincidence.
Plus, who remembers the Cash for Clunkers program? Where the Obama administration literally paid people to destroy functioning cars to prop up Ford and GM?
We’re living in an age of superabundance, and the challenge isn’t production – it’s distribution.
Economic Logic
When companies brag, it’s usually because they sold more stuff to more people for more money. When politicians brag about GDP, it’s because a lot of companies sold more stuff to more people for more money.
Giving people money isn’t just nice, it’s smart.
An economy needs people who can afford to buy stuff. This feels like common sense, right? Except – given what I learned during my MPA in economic development – it evidently isn’t. Everything they taught was supply-side focused:
Tax breaks for companies to relocate
Entrepreneurship incubators trying to be the next Silicon Valley
Workforce development programs addressing “skill gaps”
Export-oriented trade policy (let’s sell stuff to other people who can afford it)
Enterprise zones in low-income districts
Research and development tax credits
Attracting foreign direct investment
The only time we think about demand is during a crisis. And don’t get me wrong, I’m thrilled policymakers have figured out how to avert Great-Depression-level disasters, but I’d be even more thrilled if they’d think about demand during boom times, too.
Prominent Criticisms of UBI
We can’t afford it.
And if we could afford it, it’d cause inflation.
And if it didn’t cause inflation, people would quit working.
And if people didn’t quit working, they’d blow it on booze and cigarettes.
Let’s look at these one at a time.
Might People Misuse the Money?
Probably not, no.
If you’re the sort to be persuaded by science hippies, there’s plenty of evidence from similar programs to back this up.
For instance, pandemic stimulus checks mostly went to food and debt payments. Kindergeld recipients, who receive money for children in Germany, spend the money responsibly as well.
Go do some digging for yourself – if you can find some quality nonanecdotal proof that people would misuse the funds, let me know. I’m persuadable.
Might People Quit Working?
“Yes. As a scientist, I must volunteer that, I must concede that.”
If you aren’t familiar, that’s from the movie Contact. Jodie Foster’s character, a scientist, has just returned from making first contact with aliens, but doesn’t have any evidence. She’s asked: “is it possible you hallucinated this?” and she responds, “Yes.”
So, yes, it’s possible.
That said, the science hippies looked into this too. Across fifty experiments and UBI case studies, researchers found:
…no evidence of a significant reduction in labor supply. Instead, we found evidence that labor supply increases globally among adults, men, and women, young and old.
Where supply decreased, it was among children, the sick, those with disabilities, women with children to look after, and young people focusing on studying.
On net, overall supply does not decrease.
So, no, the evidence indicates people will keep working. But like Jodie Foster’s character, I have to admit that we don’t have definitive proof.
While there have been nearly two hundred basic income experiments to date, all showing similar non-significant changes in work hours, none permanently promise people money.
Without the certainty of receiving money forever, it’s not rational for a person to give up on a career. Until they’re given the option, we can’t be 100% certain.
Still, I don’t think it’s likely.
Think about it: a well-calibrated universal basic income is meant to cover only the essentials. Nixon’s Family Assistance Plan would have provided just $1000 per month - in modern dollars - to a family with four children.
It’s not yacht money, It’s not bottle service at the club money.
Without a paycheck of your own, it’s share-a-shack-with-six-friends-in-the-forest-skip-meals-and-live-on-ramen-noodles money.
Plus, people want meaning and a reason to get out of bed in the morning. Even if someone managed to subsist on a basic income, they’d go mad from boredom.
It’s why the Elmo Elon Musks and Warren Buffets of the world keep working, and why retirees dig into hobbies and volunteering.
Can We Afford It?
Yes.
A basic income could be paid for like any other policy: through taxes, debt, spending cuts, and new money.
The question isn’t, can we afford it, but do we want to? Let’s look at the math.
Pretend we pooled the assets and debts of every person, company, nonprofit, and government entity in the US. Without googling, what would our collective net worth be?
(-) $1000 Trillion
(-) $100 Trillion
(-) $10 Trillion
$0
(+) $10 Trillion
(+) $100 Trillion
(+) $1000 Trillion
Answer: as of 2014, it was $128 Trillion.
That’s enough to give every American $1000 / month for 32 years. We’re richer than god.
We couldn’t sell all those assets at the same time of course –– the market would implode – but for the sake of a thought experiment, we certainly have enough paper wealth to pay for a universal basic income of modest size.
But Won’t Giving Everyone Money Just Make Everything More Expensive?
Inflation. The inevitable question. And it’s the right one.
After all, even if we liquidate a bunch of paper wealth to fund it, the real economy is responsible for cashing the check. So I’ll start with some honesty:
“Yes. As a scientist, I must volunteer that, I must concede that.”
Thanks again, Jodie.
Basic income advocates are afraid to answer this question in the affirmative. They think: “If people think it will cause inflation, they’ll never support it.” But answering “no” underestimates people’s intelligence and probably isn’t correct, either.
So, yes, we’d probably see some inflation.
Stuff we already have an excess of, like food, probably won’t move much. Stuff we can mass produce, like cheap clothes or iPhones, won’t move much. And stuff already in short supply, like housing or healthcare, will get more expensive.
But those are issues for another day, and another article.
Mr. Widerquist put his economist hat on and shared why inflation would be managable:
“Whenever the government spends money, it’s creating pressure. Nobody says, oh, we can’t have military spending because that’s going to cause inflation. Basic income would cause inflationary pressure, but no more than any other spending.
Plus, when the government is trying, inflation is very easy to fight.
Since we got off the gold standard, we’ve come up with a monetary policy that has kept inflation from rarely going over ten percent, and it’s usually under five. Any government spending can be counteracted.”
He acknowledges the possibility while emphasizing that it’s a solvable problem.
If basic income would cause inflation may not be the right question, though.
The better question is, would you have more overall spending power once you’re receiving $1000 a basic income and inflation ticks up? For most people, the answer is yes.
Kale That Tastes Like Bacon
I made a lot of lofty claims to start this article. I’m not saying that basic income will completely solve them. It isn’t a silver bullet.
But it is certainly a silver alloy.
Ditch binary thinking for a spectrum-oriented perspective, where things can get better without being entirely fixed, and take a look.
Basic income is simple to implement. Just mail checks
Affordable — the US is richer than god
Backed by mountains of research, with hundreds of pilot programs to date
Has supporters from across the ideological spectrum, from Nixon to MLK and Elon Musk
Helps the economy - mo’ customers, mo’ profits
Improves healthcare access; people can afford a doctor
Addresses AI fears by cushioning job losses
Improves housing affordability; people can afford rent
Lowers crime by lessening acts of desperation
Lowers abortion rates, because people can better provide for would-be children
Boosts mental health; mo’ money, less stress
Eliminates poverty, because you can’t be broke with $1000 coming every month
Advances educational attainment; people no longer have to choose between side jobs and studies
Yum. Bacon…
The Best Idea We’ve Never* Tried
If you’re still reading, you’re probably agreeable in theory. But maybe you think it’s unrealistic, it’ll never happen, the rich have too much power, and we’ve never tried anything like it.
Except for all the times we have.
Social security is basic income for the elderly, and most countries have a version.
Pandemic-era support included Trump Bucks stimulus checks.
Germans receive kindergeld, a modest monthly payment for every child
Canadians receive a child benefit, similar to kindergeld
European exchange students receive ~$400 per month for living expenses, no strings attached
Alaskans and Norwegians receive annual dividends from state oil revenues
Give Directly, a nonprofit, has delivered over $163M to Kenyans since 2011
None of these programs are universal. There are as many rules and stipulations governing these policies as cousins in a catholic family.
But they’re proof of concept. Big things have happened before and, for an optimist, that’s enough to believe it can happen again.
Realistically, How Can This Get Done?
Mark Witham, founder of Basic Income Action, had a thing or two to tell me about that.
“The adoption of universal basic income is not something that will happen overnight. It requires a grassroots movement capable of demonstrating strength in numbers.
Historically, significant societal changes have required around 3.5-14% of the population to actively push for them.**
We’ve seen near breakthroughs before. There was serious consideration during the Nixon administration, and more recently, Covid showed us that large-scale cash transfers are not only possible but effective.
A critical mass needs to push for UBI, and it may sadly take a major crisis to create the urgency needed for widespread adoption. They have a way of forcing governments to act, and we need to be prepared to seize those moments when they come.”
In a few words, organizing and waiting for the right moment.
It would be easy to give into the despair of the moment. An actual nazi party is gaining steam in Germany, the US is trending toward oligarchy, and despite there being more subscription services than I have friends, I still can’t find anything to watch.
But take the long view, and things look rosier.
Humanity has transformed more in the 200 years since the 19th century than in the 200,000 years that came before. We’ve gone from poorly built gliders to the moon, horse-drawn carriages to self-driving cars, and snail-mail to instant messaging.
We haven’t adapted to superabundance yet. The logic of work or starve used to be a literal imperative – there genuinely wasn’t enough to go around. But that’s no longer true.
Instead of a production problem, we have a distribution problem. Give it time, and I’m optimistic we’ll work it out.
