Posted By Phillip W. Magness on July 26, 2016
Kevin Vallier offered a response on the BHL blog to my last post on the subject of the Universal Basic Income. It’s a lengthy post that should be read in full, but I wanted to briefly respond to a couple of points. In my previous post on UBI consisted of a challenge to the practicability of its implementation. I argue that the case for UBI is essentially undone by the political perils of its adoption. I’ll break down my position in further detail into a series of steps, starting with a few general observations:
1. The case for UBI directly depends upon a “swap” in which it replaces the existing welfare state. This “swap,” if successfully effected, would replace the notoriously inefficient, wasteful, and corrupt welfare state with something that is comparatively more efficient and more cost effective to administer.
2. It is a necessary implication of #1 that the inability or failure to successfully execute the proposed swap would obviate the primary argument in favor of adopting UBI, as it would leave us with not only a new UBI program but a simultaneous sizable remnant of the old comparatively wasteful and inefficient welfare state.
3. A failed execution of the proposed swap would also necessarily leave us worse off than the status quo of doing nothing, when measured by the cumulative expense of both programs and the cumulative inefficiency of their simultaneous existence.
4. The policy swap between the welfare state and UBI will have to be implemented through the very same political channels that produce, sustain, and administer the current welfare state, which we know to be inefficient, wasteful, and corrupt.
Though I’m open to someone making an argument otherwise, I believe these first four observations are generally non-controversial and undisputed. The rub emerges with the next step:
5. The inefficient, wasteful, and corrupt political system through which the swap must be effected is very likely to (a) capture/corrupt/distort the design of the new UBI program and (b) resist the elimination of the old welfare state, which has become politically entrenched despite its comparative inefficiency. These factors combine to make the most likely outcome of a proposed swap an expensive new UBI program + an expensive and sizable remnant of the old welfare state.
Note that this is a prediction. I outlined in my last post why I believe it is a likely prediction for UBI (there is also an extensive academic literature on why this phenonemon happens). Briefly stated, experience teaches us that several existing features of the welfare state such as Social Security are deeply entrenched in the political process and highly resistant to even modest efficiency-improving reforms. It is also likely the case that, following the implementation of UBI, persons who are disposed to a much larger welfare state than the one it provides will seize upon its perceived deficiencies to make an emotion-laden political case for retaining the old welfare state as a further “supplemental” security net. And finally, Congress – which would likely have to execute the swap on a staggered schedule over several years – has a long history of reneging on politically difficult prior commitments such as the reduction of spending or the elimination of an old program once the deadline actually hits.
I believe I have made a pretty strong case for this outcome being likely. Others may disagree and I invite the counterargument, but if we proceed as if observation 5 is indeed an accurate diagnosis of the likely outcome, we may also conclude that its necessarily obviates the case for adopting UBI in the first place (observation 2) and necessarily leaves us worse than the status quo in terms of its cumulative budget strain and inefficiency (observation 3).
I arrive at my skeptical position on UBI for these reasons but, more importantly, I also note that they reveal a shortcoming in most current arguments for UBI. Specifically, the proponents of UBI have paid very little attention on how to get us from their proposed policy on paper to actual implementation (which again necessarily requires the execution of a successful “swap” with the existing welfare state).
This is where Kevin takes issue with my argument, because he notes (and somewhat accurately, I’ll happily concede) that I have presented a world in which “policy change isn’t seriously possible, and so isn’t worth pushing for.” I’d amend that to read “sweeping policy change in a desirable libertarian direction isn’t seriously possible through political channels, and so isn’t worth pushing for through those same political channels.” I’d also add that this does not preclude the viability modest policy changes for the better, attained through incremental processes or the occasional chance opening on the margins. But nevertheless, you get the gist.
So where does that leave us? For my own outlook, it’s admittedly a position of deep pessimism about the efficacy of politics in general (I’d also add for anyone who knows me or my general outlook on the political process, none of this should come as even a slight surprise). Kevin seems to indicate that he does not share this pessimism, and he may even consider me mistaken in reaching this position.
But also note what he does not do: he does not provide an answer to the specific obstacles to UBI’s implementation that I raised, now summarized in point 5 above. Kevin seems to believe that it isn’t necessary for UBI’s proponents to explain how we could arrive at UBI, and that they need only show that UBI is conceptually better than the current welfare state. This position is deeply problematic, because UBI is being justified as an improvement upon the current welfare state. As such the entire case for UBI is actually dependent upon its successful execution – or at least a plausible case that its successful execution is likely.
If, as I have argued in #5 above, the most likely outcome for UBI is a failed implementation that instead saddles us with both a large new UBI program and the majority of the old welfare state, then the case for UBI collapses as per observations 2 & 3. Note that this is also true irrespective of whether one considers my general outlook on politics to be overly pessimistic, cynical etc. A more optimistic person might take regular refuge in political campaigns and sweeping policy solutions and yet similarly conclude that UBI faces insurmountable implementation obstacles along the very same particular lines I have suggested. And since, as I have shown above, the case for UBI is itself dependent upon the successful implementation of the UBI/welfare swap, it is incumbent upon the proponents of UBI to make the case that those obstacles are actually surmountable. Thus far, we’ve seen an unusual reluctance to make that case beyond an unconvincing exercise in the waving of hands to deem its implementation plausible without any deeper consideration of the path.
Without addressing the obstacles to UBI’s implementation that I raised, Kevin attempts to turn my description of them around by positing an analogous case against privatization along similar lines in a socialist regime. I’ll simply note that the analogy doesn’t really hold all that well for the reason that socialist regimes (or at least their hardline variety) are usually hostile to the very same political processes by which the proposed privatization or other deregulation of the status quo might be initiated. Instead you’re likely to get Prague 1968. Or Venezuela today. Still, socialist regimes do from time to time collapse and thereby “privatize.” Their softer “democratic socialist” variants also sometimes retract themselves from state ownership or heavy state regulation. At most, all this analogy shows us is that large sweeping political changes of any type are exceedingly difficult to politically design and almost impossible to execute (therefore in answer to Kevin’s question – no I actually wouldn’t view a sweeping attempt to orchestrate and manage privatization politically in a socialist regime as a particularly viable expenditure of energy – rather, as I indicated in my last post, I’d be on the lookout for cases on the margins where the rents extracted by the socialist regime had dissipated beyond the point where they are cost effective to maintain, as that is where deregulatory movements are most likely to occur).
So whether we want to address them or not, we’re back to the obstacles of implementation and to a non-ideal theorist, this should actually come as no surprise. Just as UBI is offered as a non-ideal political strategy for the welfare state problem in a non-ideal political world, its implementation must also grapple with the non-ideal features of the political system through which it is being proposed – including the likely obstacles. Otherwise the non-ideal political strategy errs in idealizing its own prescriptive political implementation in spite of the very same instincts that prompted the original turn to a non-ideal solution.