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Opinion The terrible cost of universal basic income

A help wanted sign is seen in the window of the Unika store on September 4, 2015 in Miami, Florida. (Photo by Joe Raedle/Getty Images)

Each week, In Theory takes on a big idea in the news and explores it from a range of perspectives. This week we’re talking about universal basic income. Need a primer? Catch up here.

Jonathan Coppage is an associate editor at The American Conservative magazine.

Debates around the social safety net are too easily characterized by their extremists: libertarian conservatives seeking to dissolve any restriction on free exchange, or near-Marxists who never met a hard-earned dollar that they didn’t want to redistribute. But an alternative school of criticism would claim that capitalism and the socialist ideal are both flawed — both tend to unravel the bonds that tie communities together, offering only money as a substitute.

A universal basic income, should it ever come to fruition, would likely represent the withering of America’s social fabric through the combination of the free market and welfare state. While it is easy to foresee an environment in which cutting a check to every citizen would be a reasonable and perhaps even necessary policy solution, we should earnestly hope to escape that fate. By the time a true universal basic income would be justifiable, both the capitalists and the government would be purchasing more than mere domestic nondisturbance: they would be buying many of us out of civil society altogether.

[Other perspectives: Tired of capitalism? There could be a better way.]

The economist F. A. Hayek was an early articulator of the basic income ideal. He described a policy in which the government provided  “a certain minimum income for everyone, or a sort of floor below which nobody need fall even when he is unable to provide for himself.” Importantly, however, Hayek framed the idea as being a necessary part of a new “Great Society,” one in which “the individual no longer has specific claims on the members of the particular small group into which he was born.”  

Hayek’s safety net would take care of the vulnerable after the mobility of a market economy had dissolved the traditional supports of family and community. And his “Great Society” had to be one of sufficient wealth to have enough surplus to provide for the security of all.

This has often been the justification for welfare state expansions: that they are a modern, generous society’s way of offering shelter from capitalism’s creative destruction, and a respite from the ever-present pressure to make ends meet. The welfare state is the great compromise between the free-market capitalist and the redistributive socialist, one in which captains of industry set aside a portion of their wealth to provide for the lower classes populists accuse them of exploiting, and to purchase the relative social tranquility upon which their shareholders believe a successful business rests.

Just as Hayek notes that a society of a certain amount of wealth can afford to cushion its dispossessed, our 21st-century economy seems potentially capable of eventually covering the tab of a universal basic income. “Unicorns” are frolicking in Silicon Valley, after all, and we’re on the verge of reaching new horizons in automation. Soon, our capital-intensive investments in robotics and other new technologies will begin to yield great returns — ones that won’t be tempered by the cost of healthcare premiums today or pensions down the line.

Advocates for a basic income insist that it would grant low-wage workers the bargaining power to resist bad employers. Rather than being forced by necessity to compete with newly automated employees for low-wage job, they would be “empowered” to stay home or engage in other pursuits. A no-strings-attached material cushion would allow otherwise working drones the chance for more leisure, and the opportunity to invest their time and money more freely.

But the freedom of no longer being needed is a vicious gift to give, and “no strings attached” money is rarely as costless as it seems. When we enter the marketplace, ties are formed between people: between employer and employee, between customer and salesperson, between coworkers and suppliers and the sandwich shop next door. These transactions and interactions are the threads that bind individuals together at the most granular level, weaving them into the multi-layered, tight-knit, resilient fabric of civil society. And it is necessity — our reliance on work to provide for our material concerns — that draws us into that essential weave.

A universal basic income, however, would not connect us to each other. Rather than knitting us to our coworkers, our employees, our collaborators and our families, a basic income would tie every American directly back to Washington, via millions of isolated and attenuated threads. It might sound grand to be able to give a check to every citizen. But if we would need to unravel the social fabric to get there, it’s a cost we should not hope to afford.

Explore these other perspectives:

Oren Cass: Basic income won’t fix America’s social divide

Matt Zwolinski: Our welfare system insults the poor. Basic income could do better.

Matt Bruenig: Tired of capitalism? There could be a better way.

Roy Bahat: To support innovation, subsidize creators.