Against the UBI: My Reply to Zwolinski

Here’s my reply to philosopher Matt Zwolinski, co-author of Universal Basic Income: What Everyone Needs to Know. Here’s his original piece. He’s in blockquotes, I’m not.

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Bryan’s general charge is that Chris isn’t looking sufficiently hard at the empirical evidence. A UBI would be more costly and less beneficial, Bryan argues, than the system we currently have… In this post, I want to weigh in on two of the specific arguments that Bryan makes. I’ll include an excerpt from my book that responds directly to one of them. But if you’re looking for more breadth and depth about the pros and cons of a UBI - I’d highly recommend checking out UBI:WENTK! (Also be sure to check out Miranda’s paper with Daniel Hemel, which dives even deeper into the wonky details of policy design)

Parental Irresponsibility?

For instance, Bryan argues that cash transfers to parents of young children would be a bad idea, since the fact that such parents require taxpayer assistance is evidence of their irresponsibility, and “they may spend it on alcohol.”

But this is a case where Bryan is the one who is not paying enough attention to empirical evidence. We actually know a good deal about how cash transfers affect children. In particular, evidence from the 2021 temporary expansion of the Child Tax Credit shows that cash transfers led childhood poverty to fall to their lowest level on record: 5.2%. When that expansion ended in 2022, child poverty more than doubled almost immediately, rising to 12.4%.

Unless I’m deeply mistaken, this totally begs the question. Your measures of “child poverty” simply look at how much post-transfer income the child’s family has relative to the official poverty line. Even if 100% of the transfer were spent on alcohol, that would still count as “reduced child poverty.”

In any case, if we’re comparing the UBI to the status quo, the right question to ask is not, “Does cash help kids more than nothing?” but “Does cash help kids more than in-kind benefits?” I don’t see that you’ve offered any evidence on the latter point.

Too Expensive?

Bryan’s other main worry is the cost of the UBI. This, I grant, is a reasonable concern. But Bryan exaggerates the problem grossly in his closing challenge to Chris:

“Forget every other issue. Simple cost estimates for a UBI are simply astronomical. $10,000 a person times 330M Americans is $3.3 trillion. That’s more than double what the U.S. will spend on Social Security in 2023. I have immense respect for your intellect, Chris. But seriously, how can you get around numbers like that?!”

Of course 3.3 trillion is an insane amount of money. But no one - not Andrew Yang, not Charles Murray, not Chris Freiman - no UBI advocate proposes simply giving $10,000 to every American and leaving it at that. This is simply a straw man.

It’s not always obvious until you read the fine print, by every serious advocate of a UBI proposes means-testing of one sort or another.

I say this is the Straw Man Straw Man. I have publicly debated this issue multiple times. None of my opponents were clear on this. Were they not “serious advocates”?

So how much would a UBI end up costing? Well, it depends on how big the UBI is, and who is eligible to receive it. As Miranda Perry Fleischer and I write in our book,

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“[T]he cost of a $500 per- person per- month UBI that replaced most current welfare programs in the United States would be roughly 7% of GDP. Government spending in the United States is currently around 38% of GDP, compared to 49% of GDP in Norway and 50% in Sweden. A $500- per- month UBI would keep the ratio of US government spending to GDP below Nordic levels, while a $1,000- per- month UBI would vault us ahead of Denmark (55%) and just behind Finland and France, both of whom clock in at 57%.”

Turning the U.S. into Scandinavia: That’s what I call “astronomical cost”! Do you disagree, Matt?

Note that the cost estimates above assume zero means-testing, either on the front-end or back-end. The net costs of either a Negative Income Tax or a UBI with a phaseout/surtax would thus be considerably lower.

The cost of a UBI is a real concern. And there are some plans out there, especially those coming from the political left which seek to graft a UBI on top of existing welfare programs, that would be outrageously expensive. But to get a sense of how much a UBI would cost, and how bearable such a cost would be, we need to look closely at the full variety of options on the table, in a way that goes beyond back-of-the-envelope arithmetic.

Almost all libertarians who favor the UBI fantasize they can fund it purely by getting rid of existing programs. But Ed Dolan, the pro-UBI libertarian who has done the most math on this question, ends up with a number about half of your $500 per month. Is his list of existing programs to eliminate to fund the UBI too cautious? Is his math wrong? If not, what UBI “option on the table” doesn’t require massive tax increases?

Having done that, I believe that a UBI of $500 per month would make an important difference in the lives of millions of Americans; that it would do so without breaking the bank; and that it would do so without causing a mass exodus from the labor market. A poorly designed UBI could be a disaster. But a well-designed one could be significantly better than the status quo.

I can see why a socialist or far-left Democrat might be optimistic. But why would anyone else?

[How we would actually go about getting a well-designed UBI through the political process is a notoriously difficult question, and one that I’m sure Bryan will press me on! But for now I leave that conversation to another day.]

The UBI math seems so absurdly unfavorable that I shall forego lamenting our obvious political dysfunction.