Is Universal Basic Income Possible in America?

In 2016 every Alaskan resident received a check for $1,022 as part of the Alaska Permanent Fund. Since 1976 permanent citizens are awarded a small portion of the state’s $55 billion oil fund. As part of an agreement with the Trans-Alaska Pipeline System, legislators created a constitutional amendment to ensure that residents profit from the black liquid, as well as give them a financial cushion for when the reserves are inevitably tapped. 

Not all governing bodies are so generous, and this one is not without controversy. Last year the dividend was an estimated $2,052 until Governor Bill Walker chopped it in half. Still, it is an example of how a guaranteed basic income works for one state. A program instituted in North Carolina for low-income tribal citizens has seen impressive results; the extra $4,000 the families received went a long way. 

Discussions of universal basic income are not new. Robert Reich sees it as a way for companies to save money for not having to pay workers to sit around when services are not needed. Dan Savage says it was Richard Nixon’s idea, believing it would motivate workers. For Elon Musk, guaranteed income is a necessary step in the evolution of the workforce: 

There’s a pretty good chance we end up with a universal basic income, or something like that, due to automation. I’m not sure what else one would do. That’s what I think would happen.

Not everyone is so enthusiastic. Marc Joffe, writing atThe Fiscal Times, tows an old line when writing that “many adults are unable or unwilling to manage their lives.” Translation: don’t give poor folks money. For centuries economic thinkers have refused to differentiate between paupers and the poor—paupers are not necessarily poor, but do represent the “many adults” Joffe cites. The reality is that many poor, as in the North Carolina program, use their stipend to excel. 

That’s not Joffe’s only argument. He feels UBI would also “delink productive behavior and economic well-being.” He points to humanity’s selfish nature: If that guy is getting x, well then I should get X as well. If a scaled system was put in place, not unlike the health care markets in which people who earn less pay less, then a percentage of middle earners will grow flustered at not receiving as much as lower earners. In short, UBI will create the conditions so that we won’t value the work put into earning a dollar. 

His solution is to “create labor-intensive public projects or to subsidize the wages of lower-skilled private sector employees to keep them competitive with automated alternatives.” I’m not sure how the latter would work given that Musk’s warning is not that the low-skilled jobs won’t be competitive with automation, but that they’ll be wiped out because of it. Historian Yuval Noah Harari foresees a similar future as Musk, though he too does not necessarily have faith in UBI.

Harari believes humans have two workforce skills to offer: physical and cognitive. Automation initially replaced physicality needed in the workforce. That wasn’t a problem for low-skilled workers, who were able to find comparable employment. Farm workers left for Detroit to work in automobile factories. Then the revolution occurred. In 1913 a Ford Model T took fourteen hours to produce; by 1925 it took ten seconds to roll from the factory line. The Depression destroyed much of the workforce, but when we bounced back plenty of low-skilled jobs remained. As Harari puts it, the car worker became a cashier at Wal-Mart. 

What happens when the cashier is automated, as already happening in pharmacies and grocery stores? Those workers, Harari believes, are not going to become software engineers designing virtual reality applications. Since the number of workers technology companies employ is dwarfed by factories and service industries, the earning potential of the average worker is not looking good.

Since we don’t have a “third field” beyond the physical and cognitive skill sets humans offer, we are on the verge of a “massive new useless class.” Harari compares this with the armed forces, where he says many soldiers are “militarily useless.” Most of the necessary work is going to the special forces and engineers knowledgable of drone- and cyber-warfare. 

More importantly, however, a UBI lacks one essential quality necessary for human flourishing: meaning. True, money is an imperative if you can’t nourish or house yourself. But when we’re discussing work to acquire money, meaning is essential. Not feeling that your contribution is in some way valuable quickly spirals into depression, disappointment, and hostility. The chronic strain on your nervous system and body becomes debilitating. UBI can never offer an antidote to the emotional and psychological ravages of feeling worthless. 

For centuries thinkers have offered links between spiritual and psychological worth and the institutions and corporations providing financial sustenance. Adam Smith’s invisible hand supposedly transformed individual self-interest into collective benefits; a stronger market led to more education, which elevated citizens above superstition. For Smith the imagination was the gateway to a harmonious society; by imagining a better world for all, capitalism offered a mechanism for achieving equality and peace, while working on such projects instilled in us a sense of meaning.

Hegel too put his faith in institutions, which he believed offered the individual a sense of identity. He presciently believed that the market creates needs faster than production and specialization fosters large egos, though the replacement of nature with a “second nature” linked to the institutions and cultural organizations you were affiliated with helped combat those trends. That is, we acquire meaning through association. 

Perhaps no greater critic existed than Karl Marx, who warned of the disastrous consequences of institutions like religion and capitalism, which includes the notion that acquisition leads to a loss of meaning:

The less you are, the less you express your life, the more you have, the greater is your externalized life and the greater is the accumulation from your alienated being. 

It can be argued that today many assign too much personal meaning with what we have and not what we do. When what you do is only a mechanism for acquiring more, your appetite will never be sated because more always exists. Whether or not universal basic income would work in America is almost besides the point. Musk is right—we might need it one day. But that will never offer insight into why we exist.

Meaning is self-generated. If we’re not spending time pursuing it, chances are we’ll always feel stuck, an ailment no amount of money cures.

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Derek’s next book, Whole Motion: Training Your Brain and Body For Optimal Health, will be published on 7/4/17 by Carrel/Skyhorse Publishing. He is based in Los Angeles. Stay in touch on Facebook and Twitter.