Wake up to Socialism and the Free Lunch

By Bob Livingston  February 2018

The city of Stockton, California, is about to experiment with something that has been tried before in the U.S. and is now back on top of mind thanks to the communist leanings of many in both political parties. The fantasy of a free-flowing fount of milk and honey has long held seductive allure for humans. Now this old idea is gaining new life. I'm sad to say you're going to be hearing more about universal basic income, or UBI. It's also sometimes referred to as a basic income guarantee (BIG). Back in the late 1960s and early 1970s, New Jersey, Seattle and a few other places tried it out as a Negative Income Tax (NIT) experiment. In a Manitoba, Canada, the experiment in the 70s was called simply "Mincome" (minimum income). The concept of UBI is straightforward enough: The government pays every citizen a basic stipend each month. The money is to be spent however each person wants. There are no strings attached: no reports to file and no work required. Governments around the globe are experimenting with pilot UBI programs to test the idea, to find out how it will work — or if it will work — and what economic and social impact it may have on the participants. Finland selected 2,000 citizens at random from those who were receiving unemployment benefits or an income subsidy to participate in a pilot UBI test. Each receives an unconditional monthly payment of $587/month ($7,044/yr.) Ontario, Canada, provides a guaranteed income of $12,616 per year to 4,000 citizens in a pilot program. To qualify, applicants must be between the ages of 18 and 64 and living on a limited income. About 250 people in the Dutch province of Utrecht receive about $1,030 a month from the government in a test program. Since 1982, Alaska has been distributing portions of its hefty oil revenues to every resident of the state, as much as $2,000 annually. Even the private sector is experimenting with UBI. In Oakland, California, startup accelerator Y Combinator is paying about 50 households $1,500 a month, no strings attached. The Netherlands, Iceland, Brazil, Kenya and Uganda are considering pilot projects for guaranteed income. It looks as though India, where the globalist notion of a "cashless" society has already been foisted on the people, will soon implement UBI in "one or two" of its states, according to Arvind Subramanian, chief economic adviser to the government of India. Not everyone in the world wants a handout. In June, voters in a Swiss referendum by more than a 3-to-1 margin overwhelmingly rejected a proposal for the government to give every Swiss adult $2,555 a month and about $650 to each child. The universal basic income concept attracts strange bedfellows, garnering support from polar political opposites from the left as well as the right. In his commencement speech at Harvard this year, Facebook founder Mark Zuckerberg said, "We should explore ideas like universal basic income to give everyone a cushion to try new things." Robert Reich, President Clinton's labor secretary, said: "We will get to a point, all our societies, where technology is displacing so many jobs, not just menial jobs but also professional jobs, that we're going to have to take seriously the notion of a universal basic income." Sam Altman, who runs the startup incubator Y Combinator, said, "We think everyone should have enough money to meet their basic needs — no matter what." Andy Stern, former president of the powerful Service Employees International Union and now a professor at Columbia University, said of UBI, "It is an old idea. Thomas Paine proposed it early on when we were forming the nation." Martin Luther King, Jr. supported the idea of a basic guaranteed income. The Black Lives Matter movement supports UBI as part of a reparations program. Silicon Valley and some entrepreneurial capitalists have embraced UBI on the premise that accelerating technology will displace more and more workers from "jobs." As if working for someone else is the be-all end-all, and no one should even try to produce anything themselves or work for themselves. The socialist lure of universal basic income has even ensnared prominent conservatives and libertarians, primarily as a substitute for welfare programs. Monetarist Milton Friedman supported a negative income tax. President Richard Nixon said it had practical uses and allowed his director of the Office of Economic Opportunity Donald Rumsfeld (with special assistant Dick Cheney) to conduct basic income experiments in several U.S. states. Would it work? The libertarian think tank Cato Institute, a bastion of the Austrian School of Economics based on sound money principles, examined the broader income assistance debate in a lengthy paper titled The Pros and Cons of a Guaranteed National Income. The Cato paper described its criteria to be considered a guaranteed national income (GNI), a catch-all phrase that includes various types of income assistance: "1) It is paid in cash, unlike in-kind welfare programs that provide specific services or benefits targeted to specific needs such as food, housing, or health are; and 2) unlike traditional welfare programs there are few — and in some cases no — eligibility requirements." By these criteria, Cato describes the types of GNI: universal basic income (UBI), negative income tax and wage supplements. Giving rational consideration to both sides of the debate, Cato Institute concludes that the guaranteed national income idea sounds tempting on paper. "But what sounds good in theory tends to break down when one looks at questions of implementation. There are serious trade-offs among cost, simplicity and incentive structure. Attempts to solve problems in one area would raise questions in others. A universal basic income would be simple to implement, but would cost far more than the current welfare system." Olli Kangas, who helped to design the Finnish UBI study and now runs it for Kela, the national welfare body, did a survey that showed 70 percent of the public liked the idea of a universal basic income until told their already high income taxes would have to be raised even higher to pay for it. Support dropped to 35 percent. "It's a misguided mission," says Lawrence Mishel, president of the Economic Policy Institute, a nonpartisan research center. "It's a tech CEO view of the world that I think is distorted." Indeed, Stockton's so-called "SEED" project will give a small group of low-income residents a modest, no-strings-attached monthly income. Who is paying for it? The project is funded by a million-dollar private grant from a tech group called the Economic Security Project which is co-led by none other than Facebook co-founder Chris Hughes. Socialists like Robert Reich, most tech giants and progressive billionaires would like you to think this is a "jobs" issue and that life will be "easier" if we just give people a little breathing room. This is socialist nonsense. Characterizing anything in terms of "jobs" is abdicating one's own freedom and liberty to the corporatists and elites — those who want to take wealth and power for themselves. The misguided notion of a free lunch for everyone is a malignant cancer that encourages the idea fed to us by the elites that all things come from the government and that the government is and should be all-powerful. A monthly paycheck paid for in phantom fiat currency would deepen dependence on the government and further swell its authoritarian hold on us. So who is it that really "wants" UBI? Big government statists eschew the power of the free market to determine earnings and income. Income tax, sales tax, property tax, licensing fees, permitting fees, traffic tickets, gas taxes, road tolls and a hundred other taxes and fees you pay every day are not designed to make you free or wealthy. They are a regulatory apparatus designed to maintain financial control over you. Do you suppose a "guaranteed basic income" will give anyone more freedom? It is the ultimate in altruism. The goal of altruism is always to conceal the political agenda, promote ignorance of wealth and finance, create a state of mind of dependence on government and the establishment and quash every form of individualism, independence and creative thinking. Any form of UBI can only promote ignorance of monetary realism whereby government can perpetually transfer wealth to itself with "money" that it creates and support the "morality" of government and the system, not the individual. UBI would destroy our legacy of generations of work and savings and replace it with impoverishment and disgrace. Socialism is socialism under any name, any wording or any pretense. Will we ever wake up? Yours for the truth, Bob Livingston