Basic Income vs. The Status Quo

Most arguments against the basic income can be summed up in two words: “status quo.” Owen and Jim explore the thinking behind some of the most common objections to the basic income and why these arguments are understandable but ultimately shortsighted.

——

Episode Transcript

Owen: Hello, and welcome to the Basic Income Podcast. I’m Owen Poindexter.

Jim: And I’m Jim Pugh. Today, we are going to be having a discussion episode.

Owen: We’re going to be tackling some of the issues around how the basic income bumps up against the status quo.

Jim: I really see status quo broadly as one of the biggest obstacles. When I talk to people about basic income usually with a long conversation, once they get past some initial hurdles, they think if not that is a great idea, at least, that the idea has some merit for further exploration.

Owen: Yes, in fact, I think you could sum up almost every objection to the basic income with the word status quo just with different details inserted based on who’s doing the talking.

Jim: We’re going to try to delve into some of the key areas where it seems like status quo thinking is really creating a barrier to people accepting or even sometimes recognizing how the idea could actually be really helpful.

One of the first ones that I have seen often is those people who have more of an incremental vision on how policy progresses thinking that the way we’re going to make progress is by making small tweaks to the programs we have today, rather than exploring big new ideas that very much differ from what we have right now.

Owen: Honestly, I think we saw this in the last election. There is a strong political appeal to big wholesale ideas that present a vision that is very clear and is maybe different from what we have right now.

Jim: I think if you’ve been particularly operating in Washington for the last 5, 10, 20 years, just because there hasn’t been an opportunity to implement big policy, it’s very easy to get caught up in the thinking that that will persist indefinitely.

Owen: One of the first things I hear is like, “Well, sounds like a nice idea, but that’ll never pass Congress.”

Jim: Yes, exactly. I think one of the recent examples that really stood out is, for those of our listeners who saw the Intelligence Squared debate between Andy Stern and Charles Murray arguing for basic income against Jared Bernstein and Jason Furman, both economists from the Obama administration. If you looked at the arguments that were being made almost all of them boil down to, “This is too big. We have to come at these problems in smaller ways that more resemble what we have today, and that something as radical as what you’re proposing just doesn’t make sense.”

Owen: Right, because most people aren’t thinking like, “Okay, what politically could be accomplished in 10, 20 years.”

Jim: I will say that I have noticed a pretty marked shift in recent months that seemed to coincide and likely be caused by the November elections. I think that’s a lot of, what was standard conventional wisdom leading up to that got thrown out the window, and suddenly, a whole lot more people are willing to consider that maybe some things that are much different than they are today might actually be quite possible.

Owen: One thing that we should keep in mind is that even though yes, there is this grand vision of a universal unconditional basic income, you will still have to have stepping stone policies along the way. For instance, we’re currently very excited about the trials going on in Canada or that are about to start in Ontario, and it’s 4,000 people in one area of Canada. It’s very small on one hand, but it’s looking toward this broader vision.

I’ll throw in another one that I actually just heard about today. Ro Khanna, I think that’s how you say his name, who is the new representative in Congress from Silicon Valley, is going to propose a drastic increase in the Earned Income Tax Credit and has no real hope or optimism around that becoming law anytime soon. Also, I think he is looking more toward basic income, which the earned income tax credit is not exactly a basic income, but these are little steps that we’re taking with this broader vision in mind.

Jim: Yes, I think, and there’s talk, at least, of some state-level policies that start to move us in that direction whether through some universal child allowance or through some other smaller universal income driven by a carbon dividend or something like that. I think people often do miss that when we talk about the ideas, it doesn’t mean that’s the only thing being considered. It just means that we’re keeping that big end goal in mind. That we’re saying that this is where we want to end up, and there will be smaller policies along the way. We can be strategic about how we fight for it, but we are always saying this is where we want to be ultimately and having that North Star policy to fight for.

Owen: Another major monument of the status quo that we want to take on is the austerity versus abundance mindset. This inserts itself in the background of a lot of basic income discussions that I’ve had, and Jim, I’m sure you’ve had too. Basically, it’s people generally have the idea that our resources are ultimately scarce and there’s only so much to go around.

Jim: This one actually surprises me often because, while most basic income advocates I’ve talked to recognize that incrementalism is a bad status quo perspective to keep when talking about basic income, I’ve found that a lot of advocates themselves fall into the austerity mindset when thinking about the policy. As they are trying to figure out, how do you actually pay for providing basic income to everyone, they end up in this zero-sum mindset where they’re thinking about, “I have to cut something or figure out a very, very specific source of funding in order to be able to cover the cost,” rather than recognizing that we have an amazing amount of wealth in this country at this point.

Owen: I think a lot of it comes from reverse causality thinking. This one example is, at least, here in Bay Area, we have a lot of homeless people. I think it’s natural to think, “Well, there just aren’t enough homes to go around. Otherwise, why would people be sleeping on the street.” In fact, there are enough homes to house the homeless population six times over in the US, which is an incredible statistic. I’m sorry, it’s enough empty homes, not enough homes. You won’t have to take on a new roommate. We’ve got empty space for these people, and it’s not just homes, it’s wealth, generally.

Jim: Yes, if you look, our GDP has grown by four trillion dollars in the last 15 years. We’re growing enough food in the US to feed everyone twice over. There’s absolutely enough resources to go around. The idea that inherent to our society, we don’t actually have enough to provide for everyone is a complete myth.

Owen: Yes. It is a logistical challenge to get the abundance of food to hungry people, but that’s the magic of cash, is that you give people cash, they will find food. That’ll mostly sort itself out.

Jim: I do think something that is so relevant here is, there’s a quote from Nelson Mandela which is, “Poverty is not natural. It is man-made, and it can be overcome and eradicated by the actions of human beings.” I think that’s very much what we’re looking to do with basic income.

Owen: And I would just tack on to the end of that quote, “especially today.”

Jim: I would say that incremental versus radical change and austerity versus abundance mindsets are the two most obvious ways that I see status quo thinking blocking progress on basic income today, but I do think as we move forward, as basic income becomes more of a mainstream idea and as we get to the point where we’re actually starting to be close to enacting policies, we are going to start seeing some pretty serious pushback from industries that are actually rooted in the way things are done today, and particularly, in poverty.

Owen: Yes, I think it’s not too controversial to say that, there are giant industries out there that see the economic opportunity in having people that are desperate or just have difficult circumstances that ultimately, there’s money to be made there.

Jim: If you look at our larger prison system that exists today, it has become one, very privatized. There’s a lot of companies that are cashing in on the fact that we have such an enormous prison population in the United States. The driver of people going to that system is ultimately, poverty. It’s people who are being put in situations where they don’t see that they have better options, and so, are ending up in a situation where they’re susceptible to ending up in jail.

Owen: Yes, and of course, those people also tend to not have the same legal resources to defend themselves when they do get involved in the court system. Another one is payday loan companies. Someone who is middle class or above probably won’t need to get $200, a thousand dollars a month to just pay their rent or to feed themselves for the end of the month, but people who are doing less well have to do that regularly. There are always payday loan companies that can charge exorbitant interest rates just for a short-term loan, and they could effectively go out of business if we had a robust basic income.

Jim: I think as we move forward, we’re going to start to see rumblings from some of these sectors and the others that really have their economic model based on the idea of people being on the edge and needing to claw for resources in times of desperate need.

Owen: One more topic that we want to take on here is maybe more of a philosophical one, which is the idea that we’re to some degree decoupling income from work, and this can make people pretty uncomfortable.

Jim: This whole idea, this Puritan work ethic, where in order to actually be deserving, you need to have a paying job. This is so much at the core of how people view life to a large degree. It’s not something that’s existed forever. If you go back more than certainly a few hundred years and even I would say early 20th century, there is a pretty different view on people’s deservedness, and whether it was, in fact, necessary to be slaving away at a job to actually make ends meet, but it is certainly rooted in the American consciousness that we have today.

Owen: I’d say this is another kind of reverse causality situation where I think people somewhere in their minds assume that we have to be doing all this work otherwise everything would fall apart. I can personally say I don’t think I ever had a job that was necessary for directly causing me to have a house and to have food. I’ve never built houses. I’ve never farmed outside of my own backyard. I’ve done things like blogging and marketing and that contributes to the economy, it has some effect. You have to connect a whole lot of dots before you tie that to me or anyone else being able to eat or feed themselves or take care of their basic needs outside of the income it brought in.

Jim: I think something else worth considering here is, we often talk about automation as a need for basic income because there may not be enough work to go around in the future, which doesn’t really fit with our model today, but there could be a positive side to that which is automation is allowing us to do more for less. It means we don’t need to work so much, that we actually can produce enough to cover maybe not just basic needs, but far more than that and have plenty to go around so that everyone has access to it.

Owen: Automation should be good news. If we have deemed certain tasks to be valuable and then you just have to hit a button and they happen by themselves, that’s great. As long as we have a society and an economy that makes it okay for whoever was pressing that button before to step back.

Jim: I do think it’s important to also remember though that basic income doesn’t mean we’re expecting people to not work — it just means that we are decoupling that income from their nine-to-five jobs. They may still be working as much or even more than before, but that work could be somewhat different. It could be a broader definition. We could be recognizing care work at home as actually valid work. We could be recognizing art. We could be recognizing community service. All valuable and important things, but ones that aren’t actually getting compensated today.

Owen: I feel this is a case where opponents of the basic income or just people are hesitant about the idea can get a little bit extreme in the degree to which they think people are going to quit their jobs and watch TV all day. Proposals you see out there are usually maybe around $12,000 a year per person, maybe up to 15 or 18 in today’s dollars. That’s not really enough to live certainly not a lavish life. Here in San Francisco, you’d barely be getting your housing together for that amount. It’s not like the economy will just be on a volunteer basis. People, to maintain their current standard of living, are going to need to work.

Jim: We actually had some pretty hard evidence on this front. We have the Canadian experiment in Dauphin where they provided the whole town with a negative income tax. We had four negative income tax experiments in the United States, and the decrease in work was pretty small. It was on the order of 10%. We know pretty clearly that even if we were to provide basic income, we wouldn’t have a mass exodus in the workforce. It would just open up more options.

Owen: A lot of that exodus, I believe, was high school students and parents and people who you can understand why they would leave the workforce and maybe focus on something they deemed more important.

Jim: I do think it is worth, at least, considering though some of the variants on basic income that people are talking about that may make this more palatable from a working perspective. In particular, I’m quite interested in a proposal from Roy Bahat which is that we should actually, along with basic income, create some national service program and that, upon entering adulthood, you could spend a couple of years working in service, and then, basic income effectively is your pension that you received throughout the remainder of your life as compensation for being an active citizen.

Owen: Yes, that’s an idea that I’m still tossing around in my head personally, but I think I like that one. I like the idea that probably a lot of people would do it after leaving high school or college, but you could maybe do it when you’re 35 or whatever you want depending on your life.

Jim: I think there’s a lot to explore here, but I think there’s both an implementation question and really in some ways, a marketing question. I do think that this is a really big obstacle that exists today, and so, we’re going to need to be thoughtful about how we approach it.

Owen: On that note hopefully, this discussion has helped you and maybe helped some other people get out of their usual headspace and how they think about basic income and how it will interact with our society.

Jim: As I said earlier, when we have actually had a chance to have longer conversations with people on basic income, they usually go really well. I usually am able to get through to them and get them to think critically about what a world with basic income might look like, and how the assumptions that they have today don’t necessarily need to apply in that situation, but it takes a fair amount of effort to get them there.

Owen: One thing that I think will help and has helped already are all the pilots that are going on right now. We’ve got Canada, Finland, and Kenya, through GiveDirectly. The evidence that’s come out from similar work has been really good, surprisingly good, both in how people generally don’t stop working, and a lot else in their life like health outcomes and even things like domestic violence rates, GiveDirectly has found, have gone down. As more evidence comes out, hopefully, this will be a less scary topic.

Jim: I think not just the evidence, but the actual stories. Hearing about how people’s lives are changed and how receiving a basic income can really open up so many more options, can lift them up out of some really bad situations in a lot of cases, but actually giving people a chance to empathize because I think that’s the other obstacle here. It’s always easy to think about, “What would the other person do? How would this have a negative effect or not turn out well for them?”

If we can actually show people how basic income can be transformative across the board, that I think will certainly help getting around the work hurdles that they see as obstacles and I think can set us up with a very strong coalition to be able to overcome some of the more institutional status quo obstacles that will lie ahead.

Owen: All right. That’ll do it for this discussion episode of the Basic Income Podcast. Thank you so much for listening. A big shout out to Erick Davidson, our producer. To hear more episodes like this and some fantastic interviews, please subscribe on iTunes or you can go to TheBasicIncomePodcast.com and subscribe on the podcast service of your choice. Have a great day.

Leave a Reply