Why Universal Basic Income (UBI) will never work?
Income inequality vs outcome/effort inequality
Most progressives — really, most Americans — agree that income inequality is a tremendous problem. For over 40 years, the vast majority of profits have gone to the wealthiest 10% of the economy, and a gigantic portion of those gains have been scooped up by the wealthiest .01 percent. The $50 trillion dollars that used to go to the American working class has now been leveraged to a fraction of the population, and that disparity is now obvious to everyone. In the current crony-capitalistic nature, it is
Yang’s approach to fixing the economy
The entrepreneur and New York City mayoral candidate is perhaps the most high-profile proponent of the universal basic income (UBI), in which the government would send every American a check that they could then spend however they wish.
“If I had a choice between something like universal basic income and a higher minimum wage, I would choose universal basic income,” Yang said. “But if I don’t get universal basic income, then I’m all for raising the minimum wage.”
Is this the best system for ending inequality? Let’s dive deep:
Isn’t this another form of equality vs equity debate — Equality of oppurtunity vs equality of outcome?
The parameters for the argument:
You need innovation, you pay that with inequality, but we need bind inequality else the system will collapse. The ideal solution is somewhere in the middle.
The case for UBI:
- Bottom 51% can flip the system. Inequality drives crime.
- Addresses the problem of inequality by funneling the resource to the bottom most layer of soceity.
Why the proposed solution will not work?
The fundamental problem is not that people don’t have enough money. Humans need to take responsibility to have a meaningful life — not handed out free paychecks. This will lead to gradual degeneration of ideas, innovation, creativity.
- UBI will bankrupt the economy: The idea of handing out $XX/year to everyone to get around with never work will never work as the next candidate will hand out $(XX+1)/year.
- Humans find meaning by taking social responsibility. Not by getting a free paycheck at the end of every month.
- Stalling the engine of growth/innovation: Free markets (aka free people) make different choices. Different choices produce different outcome. Outcome inequality is a funtion of free markets. There is a consequence of bad choices or a benefit of a good choice and the market should enforce these. If we need to forcibly redistribute resources, then we have to use cohersion. Example: Venezuela or the former Soviet Union turned out to failed nation states.
The correct criticism of economic inequality should be lack of equality of oppurtunity. Not to be confused with equal outcome. Equality of oppurtunity comes through education, retraining program in a creative field, empowering individuals to start a company, teaching everyone financial independence and the tax system etc.
