Does the UBI need work?

Harvest_time_in_Romania,_1920Commenters point me to some illuminating work on the UBI by Ed Dolan (‘ED’).

The chief burden of the UBI for some is the potentially harmful effect on work incentives. I do not share this misgiving myself. As a matter of folk wisdom, I would claim that nobody ever said, “Sure $10,000 a year is plenty for me. I don’t need more.” Usually aspirations are greater. People tend to want a standard of living that facilitates their social inclusion in some greater community. They care about how others see them.

A fair amount of the work incentive arguments are misleading. There are two basic types of incentives in question. One is whether or not to work at all. The other is to work a bit more or a bit less. Most of the actual popular animus against means-tested benefits (MTB, a.k.a. ‘welfare’) centers on the first. Working somewhat less, say, to care for children, doesn’t carry the same stigma. Nobody cares if a couple reduces their combined weekly hours from 70 to 60. Elites, on the other hand, tend to elevate work and GDP, family well-being be hanged. On the whole, I join my comrade The Sandwichman and say we’d all be better off under less compulsion to work.

Dolan goes to some lengths to effectively lay the work incentive arguments to rest. I don’t need that much persuading, but that’s partly because I don’t view existing work incentives as so onerous. The key to his argument is the positive effect on work incentives if a UBI replaces existing means-tested benefits such as Supplemental Nutrition Assistance Program (‘SNAP,’ formerly food stamps) or Temporary Assistance for Needy Families.

In a nutshell, these programs have a negative income tax (‘NIT’) structure, which simply means you are provided some level of assistance that decreases as your income from other sources increases. So in addition to paying income tax you are subject to some ‘take-away’ rate on the benefits. The combined effect in effect is a higher marginal tax rate (MTR) which according to economics-for-squares (EFS) is supposed to affect your choices “on the margin,” to work a little more or a little less. A higher MTR makes you work less. As noted above, that you might work somewhat less, as opposed to not at all, is usually of less concern as far as ethics are concerned.

The economist’s typical concern with MTRs is that they discourage greater individual work effort and keep families stuck in poverty. Usually MTRs, whether they stem from taxes or benefit reductions, are found to affect secondary earners most. For the primary earner in a family, the normal desire is to work at least a 40 hour week, 52 weeks a year. Often there isn’t much choice about hours.

It is true that in certain income ranges, the combined MTR of benefit reductions and taxes can be very high. However, the very high MTRs don’t necessarily apply to a wide income range or have much effect on actual work behavior. It’s possible to earn your way through the high MTR ranges, and of course that’s what most full-time workers look forward to doing. There was a poignant moment on the old weekend Chris Hayes show. A Walmart activist was being interviewed. He noted that over a certain income range relevant to him, given his own situation, there was not a lot of payoff from earning an extra dollar. But he said, “that’s all right,” since he appreciated earning more salary and looked forward to more still with higher returns.

ED’s argument on work depends on a UBI replacing a NIT. It doesn’t work for a UBI in isolation. In isolation the new UBI increases income, and with more income we all want more leisure (see EFS above). Because of these offsetting effects, the net result of a higher or lower MTR is always theoretically ambiguous. It becomes an empirical question. EFS is also bullshit, but that’s another story. We’re sticking with the popular lingo here.

So fine, replace MTBs with a UBI and maybe you get more work (probably not less), lower administrative costs, total eradication of poverty. Or not.

You first get hella disruption of existing family incomes for poor and near-poor families receiving existing MTBs. The nature of an NIT requires benefits to be available above the poverty line. If they are phased out by that point, they will either be too low to begin with or have very high MTRs for sub-poverty levels of income. Putting that aside, if you replace all MTBs for families for the sake of ruthlessly eliminating poverty, you will be nailing a lot of families between 100% and 250% of the poverty line.

You get a different sort of political reaction if you fund a UBI by filling the holes in the income tax base. (Home mortgage interest deduction anyone? Charitable contribution deduction? Bueller?) In any such exercise there will be winners and losers. And their identities will not be a secret.

Replacing some means-tested benefits with a UBI is not objectionable in principle. But then it wouldn’t be a “U”BI. How you do it becomes crucial. The pesky details tend to be glossed over in UBI philosophizing.

Universality may get more political credit than it deserves. Imagine a Social Security beneficiary or modestly-paid worker. On top of their earned benefit or their earned income they get a UBI (at the cost of some taxes), while somebody they know gets the same thing and declines to work, ever. Would they be happy? I doubt it. The political problem remains if that problem stems from popular views of just deserts, rather than universality. People don’t resent their own free lunches (see tax deductions, above) because they think they are a just reward for work. Even if income does not come from work, any tax offset is seen as reasonable because all private sources of income are seen as legitimate.

It’s possible that people could easily resent equally-distributed benefits if they do not regard recipients as equally deserving. Perhaps Social Security is politically viable because of its contributory, social insurance nature, not its universality. Historically, it began well short of universal, and to some extent it remains so today. If so, the principal political argument for the UBI collapses.

I promised to respond to some specific comments made here, so watch this space.


Il Manifesto

Marx LennonMy friends at Vox keep banging away for the so-called Universal Basic Income, or “UBI”, so I have to keep banging back. There have also been substantive comments here. I will try to respond to them, but it might be better to begin at the beginning. Putting on my Marx-Lennon suburban rec-room bolshevik hat, here is what is to be done, as far as benefit programs go:

1.  Defend and expand social insurance (Old Age/Disability/Survivors Insurance, also known as Social Security; Unemployment Insurance; Workers’ Compensation; Medicare)

2.  Defend and expand means-tested benefits (especially Medicaid, the Supplemental Nutrition Assistance Program, a.k.a. ‘food stamps,’ Supplemental Security Income — for impoverished old folks and the disabled, and assorted housing subsidies)

3. Expand work-conditioned benefits (the Earned Income Tax Credit, subsidies under the Affordable Care Act)

4. Re-federalize Temporary Assistance for Needy Families (formerly AFDC, or “the welfare”) as a national family allowance in a negative income tax format.

It should be clear from the preceding that I am not opposed to income guarantees. My argument against UBI is pragmatic and technical. In the context of genuine threats to the working class and those unable to work, the Universal Basic Income (UBI) discourse is sheer distraction. It uses up scarce political oxygen. It obscures the centrality of the priorities cited above, which I argue make for better politics and are more technically coherent.

Part of the problem with the UBI is that it isn’t a thing. It’s a multiplicity of things, all premised on the delusion that we can simply eliminate poverty at acceptable cost without collateral damage. It’s a tabula rasa upon which people write their own social policy. Everybody has their own UBI, but that doesn’t mean there is a basis for compromise on something that would turn out to be worthwhile.

Typically UBI proposals are less than fully-baked. It’s like social policy for poets. How large would a UBI be? (If it’s $10,000, total cost would be $3.15 trillion, more than the entire amount of revenue expected to be obtained in the coming fiscal year by the Federal government.) Would it replace anything else? If so what? How would it be integrated into remaining tax-and-transfer programs? Would everybody be eligible? Immigrants? Felons? Ex-offenders? NFL players? Decisions, decisions. A serious UBI proposal would have to be run through a model like this. Then you would know what magnitudes you are dealing with, and whose oxen, nay, herds of oxen, would be gored.

It is misleading when the UBI, the technical word for which is ‘demogrant,’ is likened to other schemes that are fundamentally different, such as a negative income tax or an earned income tax credit or a social insurance program. Loose comparisons exaggerate the political plausibility of the idea and gloss over the technical difficulties of reconfiguring the existing system.

The priorities advanced above have passed a political and technical test: they exist (or did), and they work. Perhaps the most challenging priority proposed above is the final one, reversing the misbegotten welfare reform of 1996, beloved of Republicans and triangulatin’ Democrats alike. The GOP, notably in the person of Rep. Paul Ryan, wants to do to Medicaid, SNAP and other means-tested benefits what has already been done to AFDC. Superficial criticism of the existing system in the form of UBI proposals is unhelpful in this light.

OK, time for a musical break.

I’m not going to bother engaging the libertarian case for a UBI because I’m no libertarian, at least when it comes to collective provision for social welfare (homeland security and foreign policy are another matter). Is there a left case?

Some uphold the freedom from an unconditional grant over the oppression of wage labor, so I have to ask, would we have a UBI under socialism? I tend to doubt it. Socialism needs to produce the goods and services people expect. If you want abundance, there is more of a premium on universal labor force participation, both for reasons of production and for social solidarity. From each according to his abilities, not according to whether he feels like getting out of bed. “He who does not work, neither shall he eat” started with the Bible, but it was readily picked up by socialists. How would social solidarity be possible if some worked while others did not?

Elsewhere I have argued, and will again, that my misgivings about the UBI do not stem from concerns about work incentives, as an economic problem. When I raise the matter of solidarity, I’m thinking of the political problem. People resent free riders. In the article by Brother Peter Frase linked above, free-riding is invoked as a feature, not a bug, that will herald the World Revolution. Gulp. The conditionality of work, the understanding of an earned benefit, not the universality, is how I would explain the popularity of Social Security.

One feminist case for the UBI invoked by Vox is that it would make women less dependent on men. This might be taken to entail the ability of women to shoulder their dual duties as earner and home-maker. Of course, those dual duties are part of the problem motivating feminism in the first place. I could think of a few other things that would make women less dependent on men: full reproductive rights, universal pre-K, equal pay for equal work, less occupational segregation by gender, integrate care-giving into Social Security (see #1 above), an expanded EITC (see # 3 above), and family allowances (see #4 above). I’m no feminist icon, but to my way of thinking those are the politically relevant meat-and-potatoes policy priorities for feminism. Your mileage may vary.

The real issue for the UBI is not how it would work. That’s because it isn’t going to happen, and you know it. The question is, what does talking about it do for progressive political culture? I have tried to show that it distracts rather than enriches.

Tomorrow I’ll have something that deals with more of the UBI advocacy, including some of my sagacious commenters.


Here we go again

“[I]n this world the nation that has trained itself to a career of unwarlike and isolated ease is bound, in the end, to go down before other nations which have not lost the manly and adventurous qualities. If we are to be a really great people, we must strive in good faith to play a great part in the world.”

— Theodore Roosevelt

ScreenHunter_10 Sep. 12 09.38

In defense of social insurance

oldmanyellsatcloud_thumbOn Twitter I said: “The basic income movement is an attack on the strongest political pillar of social-democracy: social insurance.” I’ve inveighed against the Universal Basic Income in the past, so here I go again. Another edition of old man yelling at clouds.

Throughout history, in certain communal settings some variant of the Marxian “From each according to his abilities, to each according to his needs,” has applied. In a naive sense, the UBI is not far off from that ideal. What economists call a demogrant* — a fixed, unrestricted, unconditional transfer payment to every individual (to each according to his needs**) — would presumably be financed by some kind of progressive tax (from each according to his abilities). I have no quarrel with the ideal. The problem is that it’s an utter fantasy that beclouds thinking about more plausible social policies. It’s a distraction from the need to defend really-existing social insurance and to attack the devolution of the safety net (about which a bit more below).

The most tenable model to which we could aspire for a step forward in social progress is some version of social-democracy on display in Western Europe. By a variety of measures of inequality, poverty, and other indicators of human well-being, this model offers hope of improvement. Social-democracies are certainly far from perfect, but if we want to be ambitious but also practical, it’s the direction in which to head. The foundation of these systems is extensive programs of social insurance. (Incidentally, these programs are not as a rule funded with highly progressive tax systems.)

Now it’s appealing to imagine the  from-each/to-each model as a type of social insurance. We all pitch in and we take care of each other. The difficulty is that this pushes the concept beyond the breaking point. Actual social insurance is more bloody-minded: what you get depends by some specific formula and set of rules on what you pay. It accords with common notions, whether we like them or not, of fairness. This contributory backbone of the system is what has solved the problem of gaining political consent for massive tax-and-transfer programs. There is no modern precedent for a UBI of comparable scope. (In the Alaskan bonus payment system, there is no visible Peter who is paying Paul. It’s like manna from heaven.)

Social insurance offers more than just a pay-in/pay-out mechanism. As insurance, it protects ordinary people from risks they face. Insurance is more efficient than mere saving. Individual saving can be inadequate in a number of respects. Take the case of Disability Insurance. After some limited work history, the worker is protected against loss of earnings in the event of disability. It would take a lifetime to save enough to substitute for earnings in the event of disability. In the meantime you accept a reduced standard of living, for decades, to provide for a possibility that may never come to pass. That’s inefficient. Or suppose you become disabled before you have saved enough? Suppose you invest your savings in uncertain ventures. In general people don’t know if they will become disabled. Pooling risk — insurance — solves the problem.

The social part of social insurance permits the basic market-like insurance arrangement of you-pay/you-get to be shaped according to social values. Both the tax side and the benefit side can be somewhat progressive. There is room for some flexibility, but it is not limitless. Go too far in the from-each/to-each direction and you lose the political support available under an insurance rubric.

Much as been written about why the U.S. has such a retrograde system of social provision. I don’t expect to add to it myself, except to say that in this context it is only social insurance that provides a political platform for collective provision for individual well-being. Straight-forward, simple redistribution is not well supported. It’s all we can do these days to protect what benefits have already been won.

It’s true that we have non-insurance programs providing means-tested benefits: anti-poverty programs. These programs are under attack. This is not a sea-worthy vessel you would want everyone else to board. I have urged UBI partisans to direct their attention to the atrocity of welfare reform. The biggest hole in the U.S. safety net is the misery of families with children whose wage-earners are unable, often for reasons beyond their control, to solidify an attachment to the labor market and the social insurance provided to wage-earners.

In 1972 Senator George McGovern proposed a demogrant of $2,000 as part of his electoral campaign for president. He received 17 electoral votes, winning Massachusetts and the District of Columbia, to cheatin’ Dick Nixon’s 520 votes.

We still live in Nixonland.

Tomorrow I’ll offer some remarks on the latest Vox blast on the UBI.

* Not to be confused with a negative income tax, social wage, or the Earned Income Tax Credit, each of which differ from a demogrant in fundamental ways.

** Please do not mistake my characterization as a suggestion that the UBI is dangerously radical or communist. I’ve got no problem with communist, as an ideal. The problem is that the UBI is utopian in an unedifying way.

Meet the new war, same as the old war

I echo Chris Hayes’ incredulity, expressed last night, at Barack Obama’s long strange trip: from his rise to political stardom as an opponent of the (second) Iraq invasion, to his devolution as a born-again interventionist, proposing to reinject the U.S. into the very same war he originally opposed.

It looks like the same war because the U.S. enemy in Iraq was Saddam Hussein and his base in the Sunni population. The Shiites and Kurds had nothing but hatred for Saddam. So this was a war on the Sunni. This onslaught continued in the person of the Shiite-dominated, U.S.-backed Iraqi puppet government.

The newest Hitler-of-the-month, the so-called Islamic state or ‘ISIS,’ is nothing but the reemergence of the Sunni under a distinctly less wholesome leadership. We traded Saddam for a group that looks worse than Al Qaeda, from the standpoint of non-Sunni minorities in Iraq, and possibly for the U.S. too, eventually.

The exploitation of the execution of American journalists as an excuse for war is patently ridiculous. I have no less regard for the victimized Americans than anyone else who doesn’t know them. But the U.S. government doesn’t start new wars because Americans are murdered. After all, the USG murders Americans all on its own. It needs better reasons, by its own lights. I wouldn’t get stuck on the beheading thing either. A U.S. ally does beheadings, recently for the criminal offense of “sorcery.” This particular ally will be enlisted to join against the barbaric ISIS.

The more important reason the executions are an insane pretext for war is because that was precisely their purpose. ISIS is saying, please attack us. They are smart enough to know the U.S. is dumb enough to oblige them.

My standard approach starts with the question of efficacy. Can some kind of escalated U.S. assault on  ISIS accomplish its objective? If it can’t, all the moral considerations pro and con are irrelevant. If you listen to area experts, rather than rabid baboons in pin-stripe suits, the efficacy is dubious. You might be able to blow up all their new toys (courtesy of the U.S. government, via the Iraqi joke army). But their grip on the population will remain. This is a population that is disaffected from the U.S., ISIS or no ISIS. In the past there are cases where the USG has conquered unfriendly populations and pacified them. This is not going to be one of those cases.

The U.S. was not greeted as a liberator in Iraq. What combination of other countries would receive a more congenial reception, if it put ground troops onto the field against ISIS? The great oil sheikdoms, lead by the great beheading nation of Saudi Arabia? Other white folks from Europe? Shiite Iran? Will Kurdish or Shiite troops be willing to fight ISIS on turf in which they have no political interest?

I can’t get upset if the U.S. helps the Kurds, with anything they need, including air support. But what is in store may go well beyond that and contain its own dynamic of escalation. In the end, the question may still remain, who will march into Sunni territory, extirpate the opposition, and construct the political basis for a new Sunni politics? I don’t see it.


MaxSpeak at the movies: “Murder, My Sweet”

I’ve been asked to resume doing movie reviews. I rarely go to the theater. Hey I’ve got a 52″ screen. Don’t need to. One Transformers film is enough.

Proof I’m getting old — I watched a Turner Classic Movie, and it was great: Murder, My Sweet, from the Raymond Chandler novel Farewell, My Lovely. (Not to be confused with the 1975 remake starring Robert Mitchum.) This one stars Dick Powell and people I’d never heard of, with the exception of Mike Mazurki. It came out in 1944.

Mike Mazurki (6'5")

Mike Mazurki (6’5″)

The violence in the movie is pretty tame for a murder/detective flick, no great loss. None of the actors’ physiques would get them into a screen test today. Powell in one scene is wearing pants and just an undershirt when The Dame walks in and compliments him on his build, not much different than Ozzie Nelson’s. These days he wouldn’t frighten anyone in a dark alley. By contrast, the heavy Mazurki (born Mikhaił Mazurkiewicz, an Austrian), had been a football player and professional wrestler. He looks like he could more than hold his own with any of today’s action heroes. Moreover, Mazurki is a pretty good actor as a low-brow thug. In reality he had a college degree and spoke better English than Schwarzenegger.

The plot is reasonably intricate and the dialog snappy. It works more as camp than as seriously gripping, but it’s still great fun.

The director was Edward Dmytryk. He had done some anti-fascist movies in the Forties. He later ran afoul of the red scare, did time, got blacklisted, eventually appeared before HUAC, and named names. He got back to working in the U.S. afterwards; the most memorable later effort was The Caine Mutiny.

I could detect no political memes in this film. One bit of prescience, at one point the protagonist Powell is injected with psychotropic drugs and suffers hallucinations, the depictions of which are also campy, given the limited state of movie technology.

I hate movie reviews that preview the plot, so I won’t do it. If you like film noir detective movies, you should like this. One of my favorite courses in college was called “The Tough Guy Novel,” taught by one Peter Manso, who later became a big-time author. We read Raymond Chandler, James M. Cain (The Postman Always Rings Twice, Double Indemnity), Dashiell Hammett, others I don’t recall at the moment. Great stuff.

Hillary Clinton and stimulating war criminals she has known

020513ClintonKissingerEverything old and evil will be new and evil again.

“Anybody aiming for high office in America has to be able to swear they’re capable of dropping the Big One. Obama knows that. HRC knows it too, but nobody bothers to ask her, since they know the answer anyway. That woman probably uses a bomb sight to target in on her breakfast grapefruit.” — Alexander Cockburn, 4/23/06

Expect nothing and you’ll never be disappointed

voting-paper-ballotsIf Arianna Huffington is too edgy for you, here’s Joan Walsh of Salon. She’s another tribune of presidential powerlessness. Once again the naive Obama critics harbor a foolish belief in a magical president. Once again Cornel West is name-checked, succumbing to “cruelty and irrelevance.” Cornel, cruel? The dude loves everybody! How could he be cruel? I sure don’t love everybody, and I can be cruel.

The article subhead is “what the left must really do to defeat the wingnuts.” (Spoiler alert: the answer is stop being lefty, shut up, and vote for Democrats.) Walsh tries to have it both ways. She has criticized Obama too, really. In fact, most of the column is about bad Republicans. This gives her the right to lecture us on not expecting too much.

Let’s tick off a few things Obama could have done, that did not depend on the Congress, but didn’t.

1.  He could have said, every day, that additional deficit spending, lots of it, would facilitate the otherwise anemic economic recovery.

2.  He could have prosecuted miscreants in the financial sector, instead of putting that task in the hands of a fellow in DoJ who ended up joining that sector.

3.  He could have reduced the rate at which U.S. drones blew up wedding parties and unindicted U.S. citizens.

4.  He could have defended the right of assembly of Occupy and Ferguson demonstrators, and freedom of the press for reporters who covered them. (Walsh calls this “stagecraft,” rather than “statecraft.”) He could have restrained the NSA and prevented them from lying to Congress.

5.  He could have provided a word of encouragement to the folks who besieged the Wisconsin state capital in 2011.

I could go on  . . . The point is that Obama could continue promoting policies that the Republicans have blocked, and he has had free rein to screw up foreign policy, homeland security, and the administration of justice. And he doesn’t need permission to speak. So the Green Lantern/magical president memes are just crap. Apologetics for the DP: shut up and vote.

The common thread is the desperate need of electoral obsessives to deny the possibilities of independent (of Democrats) political organization. I vote Democrat, and I encourage all to do so, but there is no actual party to join. It’s a machine to harvest your credit card and get you to the polls. Outside of that, there is nothing there. Your contributions pay for elites to hobnob with each other. That’s the party. You’re not in it.

It is not even necessary to specify here where independent action should go. I’ve got my own preferences. The point is the conversation should proceed from there. It is the starting point for progress. Vote-nagging is not progressive politics.

By the way, we did vote for Obama like good little boys and girls, and still . . .shit