Epilogue: why UBI schemes are doomed to fail

What lessons does the ill-fated 1970 guaranteed income bill teach us today? What timely takeaways, if any, can we obtain from this legislative debacle? After all, this political theater took place several generations ago; the leading players are all dead. Below are excerpts from the epilogue of my latest work-in-progress “Guaranteed Income: Chronicle of a Political Death Foretold”:

“… Given the resurgence of Universal Basic Income (UBI) proposals in our day,[a] the rise and fall of H.R. 16311 offers a compelling case study into the politics of guaranteed income. As [Daniel] Moynihan taught us long ago, ‘income redistribution goes to the heart of politics: who gets what and how . . . .’[b] So, if you are a proponent of UBI or are merely sympathetic to this idea, you will want to avoid repeating the mistakes of the past. But, by the same token, if you are opposed to UBI or are just skeptical of this idea, the story of H.R. 16311 provides an instructive political playbook for how to defeat such proposals.

“Although the idea of a basic income or UBI can be located ‘at almost any point on a spectrum ranging from a prudent and cautious [i.e., incremental] reform of welfare payments to a climactic abolition of the wage system,’[c] in the end H.R. 16311 was negatively framed by its opponents in moral terms: the bill paid people not to work. As a result, the leading lesson of this affair is this: any realistic UBI proposal must somehow find a way of passing an impossible political test before it will ever be enacted into law. How can a government provide a meaningful income to the poor, let alone a universal income to all persons, without distorting work incentives and without breaking the bank, so to speak?

“Stated bluntly, what is the optimal amount of income that each person should be entitled to? Consider for the last time ‘The Family Assistance Act of 1970.’ Was the proposed $1,600 annual cash stipend for a family of four—the centerpiece of the bill—too generous and too costly, or was it too stingy and miserly? This inherent contradiction, not to mention the delicate questions of race and class looming in the background, cursed [the guaranteed income bill] from the get-go; it also bedevils all universal basic income schemes generally. Supporters of contemporary universal basic income schemes should take this inherent tension to heart. Unless they can solve this puzzle (how to finance such schemes), any attempt to enact a universal basic income is most likely doomed to fail.”

Related image

h/t tyler durden (via zerohedge)

[a]  See, e.g., Howard Reed & Stewart Lansley, Universal Basic Income: An Idea Whose Time Has Come?, Compass (May 23, 2016), perma.cc/9E38-BC3K; see also Jurgen De Wispelaere & Lindsay Stirton, The Many Faces of Universal Basic Income, 75 Pol. Q. 266 (2004).

[b]  Moynihan, op cit., at 441

[c]  Id. at 355.

About F. E. Guerra-Pujol

When I’m not blogging, I am a business law professor at the University of Central Florida.
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1 Response to Epilogue: why UBI schemes are doomed to fail

  1. Pingback: The Jobless Mob Grows Daily – ConspiracyOz | conspiracyoz

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