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Universal Basic Idiocy

June 9th, 2017
Investor's Business Daily

In recent weeks, the idea of a "universal basic income" has shown surprising popularity across the political spectrum, from left to right. The only real question is why, since it's such an awful idea.

For the left, the superficial case for a universal basic income, also called a guaranteed income, is that not everyone can compete in today's high-tech, advanced economy. With the advent of robots, automation and artificial intelligence and the job losses that will ensue, or so the argument goes, we will need to pay people a basic income, or risk having even worse income inequality than we have now.

Meanwhile, some conservatives say a guaranteed income could be used to end welfare as we know it. Just give people a basic amount of money, and do away with all other forms of welfare — one check, that's it. No-fault welfare.

These might sound tempting and reasonable, but they are profoundly flawed.

Start with the first idea: That automation is going to destroy work as we know it. That's not likely true.

Yes, some jobs are vulnerable, especially low-skilled, manual jobs, as a recent study by economists Daron Acemoglu and Pascual Restrepo for the National Bureau of Economic Research noted. And the McKinsey Global Institute earlier this year estimated that as many as half of all jobs could be vulnerable to robots and other forms of automation.

True enough. But past experience shows that while investments in new technology cost some workers their jobs, those investments have always led to more jobs overall, not fewer.

"When businesses automate to boost productivity, they can cut their prices, thus increasing the demand for their products, which in turn requires more workers," notes Ronald Bailey, in a lengthy piece on automation for The McKinsey report, for instance, notes that productivity from automation over the next 50 years should yield gains of 0.8% to 1.4% a year — roughly twice the gains from the internet revolution. Where productivity rises, jobs follow.

As for the welfare reform argument, the real problem is that when you hand a person a check they have less incentive to work. Period.

It is an ironclad rule of economics: What you subsidize, you incentivize. Subsidize nonwork through a guaranteed income, and don't be surprised when lots of people stop working — or work a lot less. And someone else will pay for it. Is that the kind of society we seek?

The truth is, well-meaning social engineers' ideas notwithstanding, a guaranteed income is a very bad idea. It's utopian, and anti-work.

America is based on work, is defined by it. At this point in our history, shouldn't we be looking for ways to encourage work, not discourage it?

1 Comment
Added by Jim

The fact that the free market is: faster, smarter and always more correct than the government sponsored tweekers, is somehow lost on the hords of utopian minded bureaucrats who call themselves economists! If they would only get a real job, where they produced something of value rather than try to force the world to reshape itself into their latest abstract mirage.
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