Holzer: Yang is onto Something

A libertarian defense of universal basic income.

by Emory Holzer | 1/23/20 12:30am

 Today, the concept of a universal basic income is synonymous with Democratic presidential candidate Andrew Yang’s “Freedom Dividend.” The self-proclaimed “MATH” candidate likes to use his campaign’s cardinal policy proposal — sending every American adult $1,000 per month ­— as a panacea for the country’s myriad problems. These include climate change, poverty, racial divisions and the gender pay gap — all ambitious goals to announce in just the second Democratic presidential primary debate.

But the idea is not new to Andrew Yang or the 2020 Democratic primary race. The idea has existed at least since the 1516 book “Utopia” by Thomas Moore. In 1962, free-market capitalist Milton Friedman advocated for a similar system he termed a negative income tax. And in 1970, the idea even came close to becoming law. The idea has drawn supporters from diverse ideologies and backgrounds, but some fear that a UBI resembles a severe overreach of government.

However, as a libertarian advocating for a small federal government, civil liberties and free-market capitalism, universal basic income sounds like a great idea to me. When one looks through an altered view of Yang’s Freedom Dividend — not as a supplement to, but a replacement of the welfare system — through the lens of libertarianism, a UBI leads to less bureaucratic inefficiency, more individual freedom and more money in the pockets of those who need it most.

The current U.S. welfare system is comprised of more than 80 individual programs. From food stamps to government housing to Medicare, Medicaid, Social Security and housing subsidies, each of these programs comes with its own administrative overhead costs. Replace these piecemeal bureaucracies with a single office — composed one staff and one set of rules — and administrative costs would plummet. A universal basic income would streamline the entire welfare system, decreasing costs to taxpayers and increasing payments to the families below the poverty line. With technological developments, the prospects for trimming the fat even further are optimistic. Matt Zwolinski, an associate professor of philosophy at the University of San Diego, posits that UBI could even be administered by an algorithm, reducing overhead to near zero.

While the government’s welfare programs may provide aid, they constrain the exercise of individual liberty for recipients. The current state fails to give individuals the right to decide how to budget. Rather, the welfare system has determined that it knows individual needs better than the individuals themselves. Under food stamps, for instance, one can only purchase certain goods pre-approved by the government; alcohol, vitamins, prepared foods and hygiene items are only some of the items prohibited. This restriction of individual liberty is the antithesis of libertarianism. By giving individuals an unrestricted lump-sum, individuals can decide for themselves how to budget and choose which goods they should and should not buy.

Libertarianism, for the most part, does not think positively of the welfare state. But modern societies require government assistance in some form. If the federal government provides no social safety net and families are unable to afford food and shelter, they cannot be reasonably described as free, even if they face no government infringement. While universal basic income certainly fails to eradicate welfare, it comes close to eradicating the welfare state. 

By taking the bureaucracy out of aid, UBI will put freedom back into the hands of individuals, letting them decide how to budget their stipends. This individual freedom is the essence of libertarianism. A universal basic income is the optimal way to provide government assistance within the confines of libertarian principles. This way, the state can support individuals with basic funds and give those individuals the liberty to spend it how they wish.

Today, drawing fierce support from independent voters, particularly in New Hampshire, Andrew Yang’s promise of providing money to every person in America surely sounds nice. Perhaps more people need to listen to the drum Andrew Yang has been beating. This libertarian, for one, likes the sound of it.