UBI Part III: Alternatives

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Kris Morgan   September 21, 2017

Universal Basic Income (UBI) comes with high costs.  Economically, it will inhibit growth by placing a tax burden on production, making it more difficult to start new businesses and for small ones to compete.  Taxation also detracts from funds which could be used for reinvestment.  Monetizing more debt would put heavier pressure on our already weak dollar, as well as cause malinvestments.  Our government is not only 20 trillion dollars in debt, but it presently holds over 127 trillion dollars in unfunded liabilities, in addition to wartime spending.  If we do not reject the UBI on our own terms, basic economics will force the issue.  That does not mean we must embark on the future without a plan.

Fortunately, plenty of economic reforms have been presented which are worthy of support.  Regulations that do not directly protect the property rights of others can be discarded.  Overtime rules, wage floors, truth in advertising, licensing requirements, and others restrict market forces from allocating resources to meet demand efficiently.  For example, the operant assumption in truth in advertising is that a particular business has engaged in false advertising, until proven otherwise.  By pushing back harmful regulations, we give ourselves a fighting chance to build.  It is unwise to face an uncertain future with our hands tied.  

Support for UBI indicates people have empathy for those who are unable to adequately adapt.  UBI is a means of expressing this feeling.  The alternative to government power is the conduit of civil society.  Entrepreneurs could market goods and services as products which support jobs.  Consumers can use purchasing power to reinforce such ventures, and philanthropists could fill in the remaining vacuum.  

UBI has brought attention to significant defects in our education system.  Its original intent may have been to create a labor force suitable for factory work, rather than enlightened critical thinkers.  In 1903, when John D. Rockefeller founded the General Education Board, his advisor Frederick Gates informed “…We shall not try to make these people or any of their children into philosophers or men of learning of science. We are not to raise among them authors, orators, poets, or men of letters.  We shall not search for embryo great artists, painters, musicians…”  

This design was confirmed in 1990 by New York Teacher of the Year John Taylor Gatto, who said the following during his acceptance speech: “…Schools are intended to produce through the application of formulae, formulaic human beings whose behavior can be predicted and controlled.  To a very great extent, schools succeed in doing this. But our society is disintegrating, and in such a society, the only successful people are self-reliant, confident, and individualistic…”  

Education to induce conformity may have worked in the past, but it will not suffice any longer.  According to careerfaqs.com, the skills needed in the future include cognitive flexibility, creativity, critical thinking, and complex problem solving, among a few others. We should be pressuring our local school boards to focus on building skill sets, such as these, which are projected for future success.

As parents, we should not leave the task entirely to school.  Computer competence can be taught in our homes.  By teaching our kids a programming language, we could give them a head start in facing the future with a marketable skill.  If need be, we could find someone to act as a tutor.  

It is clear that the areas which need the most reform are our economy and our education system.  Our children must be able to exercise their creative muscles, and it is fundamental they be economically free to adapt.  Anyone supporting the idea of UBI without considering our weak financial position should consider what is addressed in this article.  It is not a question of whether we will have to take responsibility for ourselves, it is whether a severe economic crash will be the cause.

 

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UBI Part II: Education

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Kris Morgan, September 15, 2017

Since Universal Basic Income (UBI) in the United States would potentially fill in for wages lost to automation, it is wise to get a snapshot of where American education stands in terms of science and technology. Presumably, the labor market will be reoriented towards developing software and other tasks workers are presently unqualified to perform.  What do we know about science?  Per ultratechlife:  “According to an MIT report, at least 216 million Americans are scientifically illiterate. There are several other reports that seem to highlight this assessment of US ignorance. There appears to be a failure in American culture and the educational system especially when an adult cannot understand basic science concepts.  Where did we go wrong and what can be done about this? Believe it or not, science literacy is a matter of national security, critical for our economy and future as a competitive nation.”  

By solving the mystery of our ignorance, and closing the gap, we can cultivate logical alternatives to the UBI.  Perhaps the explanation of American ignorance can be solved by taking a glance at our school curriculums.

The Atlantic reported that just half of children between seventh and 12th grades attend schools that offer computer science courses, which are typically electives. It is noteworthy that according to the article, minorities are less likely to have access to computer classes, and males are more encouraged to take Computer Science courses than females.

The scientific community is not silent about this issue.  Renowned physicist, cosmologist, futurist, professor, and author Dr. Michio Kaku made the following comments on education in 2016: “The United States has the worst educational system known to science.  Our graduates routinely compete at the level of third world countries.” Referring to our tech sector specifically, he remarked “Without the H1B (visa), the scientific establishment of this country would collapse!  Forget about Google.  Forget about Silicon Valley, there would be no Silicon Valley without H1B.”  The visa allows non-immigrants to work for American businesses if they have “theoretical or technical expertise in specialized fields such as in IT, finance, accounting, architecture, engineering, mathematics, science, medicine, etc.”

This lack of education is precisely what is causing many of our anxieties and support for UBI. At present, 50% of the population surveyed already favor it.  It is reasonable to expect this number to grow as we see our economy decline due to war spending, quantitative easing, inflation, and the rest of government inflicted hardships.  Indeed, we are facing automation earlier than we would had it not been for wage floors, regulations, and political involvement in the hiring and firing processes.  

Fortunately, we have more tools than ever for self-directed education.  Khan Academy, Rosetta Stone, iTunes U, books on pdf, and of course libraries, are all excellent supplemental educational resources.  We can teach ourselves skills. We can hire tutors to help us and our kids learn basic programming. We can pressure our local schools to do a better job of preparing our children for the future.  Many businesses offer programs for their employees to earn certificates and degrees in areas such as robotics and programming, as they do for maintenance personnel and other departments.

We need not always focus on where we disagree on education, i.e. religion’s place, or how much money teachers are being paid.  The coming of automation and whether we need to be prepared for it is a completely bi-partisan issue.  We all share the responsibility of making this transition easier for future generations, even if that means it is hard for us today.  We should get involved in our local schools and ask “What is being done to ensure our kids have the necessary skills to thrive in the future?”  

People avoid growth often times because it is time consuming, means making mistakes, and invites the possibility of embarrassment. Growth is often painful.  What gets ignored due to these fears is how much better off we will be when we succeed.  Within a generation, mental labor will be the norm and physical labor will be rare.  We have the opportunity to permanently change humanity for the better.  We either fight for a future that revolves around subsidies, with little to show for it in the long run, and remain absent from history; Or we fight for a future dependent on growth, enrich society for generations to come, and go down as one of the great generations in human history.


 

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UNIVERSAL BASIC INCOME

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Melissa Davis, 11/17/16

The discussion on Universal Basic Income (UBI) is becoming more prevalent across the globe. Countries including Canada, the Netherlands, as well as the Dutch city of Utrecht are developing pilot programs to test its effectiveness. FinlandIndia, and France are considering UBI as an option to streamline government welfare programs. Though there are still many unknown variables, an incremental approach may prove to be a viable solution to resolving the disastrous mess that is our welfare system here in the United States.

According to an article posted by FiveThirtyEight: What Would Happen If We Just Gave People Money?  The “U.S. government spends nearly $1 trillion across dozens of separate programs at the state and federal level…This all requires enormous administrative oversight on the part of the government, and it requires the ability to navigate multiple agencies on the part of recipients.” “In the U.S., we’re left with a patchwork benefits system, an indecipherable alphabet soup of programs: SNAP, TANF, CHIP, Section 8, EITC, WIC, SSDI.” “The problems with this system go beyond its complicated structure. Because eligibility for most social assistance is based on income (or is “means-tested”), recipients lose their benefits as they earn more income — this is often labeled the “welfare trap” or “poverty trap.”

We are all aware of the “poverty trap” where recipients on such programs cannot earn income in addition to the assistance they receive from the government, discouraging work even if one is capable in slight capacity. This leads to either hiding extra income through “under the table” cash payments or non-efforts by the recipient to seek extra income elsewhere. With UBI, these limitations would not be relevant. Therefore, if one chose to seek extra income, to better their life through education, and so on, they would not be penalized by losing the safety net their families rely on for basic living expenses.

Switzerland rejected the idea of UBI earlier this year citing fears that “disconnecting the link between work done and money earned would have been bad for society.” However, so far, studies have shown the opposite to be the case. One Study led by Johannes Haushofer (Princeton) and Jeremy Shapiro (Princeton) “documented large, positive, and sustainable impacts across a wide range of outcomes including assets, earnings (from sources other than our transfers), food security, mental health, and domestic violence, after on average four months. The study found no evidence of impacts on alcohol or tobacco use, crime, or inflation.”  Another U.K. based program, the Universal Credit Pathfinder Evaluation, cited by Cato Institute claims that “recipients of the cash payment were more likely to look for work and believed that the program offered a “better reward for small amounts of work“.

In an interview with CNBC Elon Musk of Tesla Motors says “there is a pretty good chance we end up with a universal basic income, or something like that, due to automation. He based his assessment on the prospect of increased automation in society. Given that his companies use robots and automation extensively in their products and that he has started a non-profit to explore judicious uses for artificial intelligence, Musk should know a thing or two about such matters.”

Silicon Valley agrees, “If technology eliminates jobs or jobs continue to become less secure, an increasing number of people will be unable to make ends meet with earnings from employment. UBI becomes a consolation prize for those whose lives are disrupted. Benefits still accrue to the designers and owners of the technologies, but now with less guilt and pushback about the collateral damage.”

While factors still need to be considered, including the counter argument from a libertarian perspective that it would be a form of socialism, perpetuating the “slave to the system” mentality, a slippery slope to communism; the overall concept of providing a universal basic income implementation gets complicated. How would it be distributed fairly across states with varying costs of living?

While It would eliminate the current complex government welfare system which has proven to be a dramatic failure, it would provide opportunity to those who wish to better themselves sans penalty for their efforts.

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