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Against Basic Income

I used to think that basic income was a good idea. I no longer do. Here’s why:

  1. Basic income solves the wrong problem.
  2. Means-tested social programs are just better than basic income.
  3. Basic income is an exercise in the typical mind fallacy.

1. Basic income solves the wrong problem.

Key argument: in developed countries the main problem is the absence of meaning and cultural and status inequality. Basic income doesn’t address any of these problems and may only exacerbate them.

Chris Arnade’s tweetstorm:

  1. I know many think Universal Basic Income is the cool “hack” solution to our problems. But it is addressing the wrong problem

  2. Our problems not just about a inequality in wealth, although that is a problem[.] It is also inequality in social capital. In meaning

  3. Places that I go to, minority or white, have broken social structures. Have disintegrated networks. Communities have been destroyed.

  4. People in them feel very much “left behind”, & not just economically. The educated set the social agenda. From language allowed to style

  5. Almost all “valid social networks” these days are driven by education & the culture that follows. They are left with McDonald’s & Chili’s

  6. That loss of meaning, of being on the outside of what is cool, and NOT having a job that is also considered cool – that is humiliating

  7. Universal Basic Income does nothing to solve the issue of humiliation. In fact, for many, it will be MORE humiliating.

  8. I guarantee within X months of there being a UBI program there will be nasty & derogatory terms for those on it. UB-ees, or something […]

Rory’s The Redistribution of Humiliation:

One problem is inequality of wealth. In theory, this is simple to solve, we just give people money. If we don’t have enough money to give people, this is unfortunate, but long term growth, trade and neoliberalism will mean there is more to go round. This misses the bigger picture though. People are very poor at identifying disparities in wealth, their perceptions are very far from reality, and so addressing this is unlikely to allay frustrations. When people talk about inequality in society, they are really talking about the hierarchy of status.

[…]

Redistributing wealth does little to address inequality of status, and may even make the problem worse. While making money yourself confers status, being given it doesn’t. In fact, being able to afford to give a handout is a costly signal of your own strength, whereas accepting a handout incurs reputational costs. The hierarchy is reinforced. In the past, the government has managed to work around this by disguising the handouts. They use white lies like the contributory principle to justify tax credits and pensions, or more roundabout ways, like the Thatcher government’s subsidised sell off of council housing. […]

2. Means-tested social programs are just better than basic income.

Different people require different amount of assistance. A typical healthy adult doesn’t need any. A typical sick and old person needs a lot. It’s not clear why we would want to break this asymmetry. Here’s Vipul Naik elaborating this point:

It seems overall that the incentive structures of these programs [Food stamps, etc.] are reasonably okay – the bureaucratic structures around them help guard against both over fraud and a lot of people using the programs when they don’t really “need” it. And the programs meet specific use cases (like, if somebody is really bad at handling money, food stamps help the person buy food without blowing away the money; if somebody has started working and needs encouragement, EITC steps in. If a family is going through a hard time and has dependent children, TANF steps in. […]

3. Basic income is an exercise in the typical mind fallacy.

There’s a blog post (not mine) on this point which is currently offline and wasn’t archived anywhere, as far as I know. Below are several quotes from it. I’m not sure if I can publish the whole post, so message me if you want to see it.

This rigorous yet free life of the mind sounds extremely appealing to the intellectual 1%, and living in this utopia would be reason enough to favor the basic income guarantee, even leaving out all the selfless stuff about fixing the culture of poverty.

[…]

Even after the death of the old aristocracy, there was a pretty guaranteed way to live a low-key life of the mind; you could join academia.  Now academia today is a rat race like any other prestigious career track, and if you want to make it you have to apply your nose firmly to the grindstone and not spend too much time fooling around. But it’s really only quite recently that academia was so difficult and Darwinian to try to break into.  James Watson, as recently as the 1950s, was a mediocre college student until he read What is Life, got excited, and decided to go to grad school in Indiana to work on it.  Today he wouldn’t stand a chance against students who had spent undergrad getting good grades, working with the right mentors, and generally jumping through the right hoops.

I think the basic income folks are fundamentally reacting to this shift, this closing of the last sanctuary of aristocratic intellectual freedom.  The reason they have a low-resolution view of the poor[3] but portray an incredibly compelling portrait of what an aristocratic intellectual life could look like is exactly because that is the main driving force, a semiconscious cry of pain at the possibilities that were lost as the last academies closed their gates.  And whatever one may think of the policy proposal itself, I think this pain is perfectly real, not only for individuals but for a society’s intellectual health, and whatever else they do, the proponents have done a great service by articulating it.

[…]

[3] Of course it has to be pitched as reforming charity, because “creating a new lifestyle for the intellectual elites” would poll terribly.  This despite the fact that the basic income is a much better tool for the latter than the former.


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