The Case for a Universal Basic Income

By now, it is well established that capitalism is fundamentally built upon threats of force. As libertarian philosophers Robert Nozick and Matt Zwolinski have explained, the only way to turn unowned natural resources (such as land, minerals and other goods) into privately owned property is by violently preventing all others from using them. This one-sided exclusion destroys freedom of movement and cuts many people off from the things that they need to survive.

When the physical resources necessary for production are privately held in the hands of very few, as in the United States, the majority of the population is forced to submit itself to well-financed employers in order to live. The precarious position of most workers in this position — desperate for employment but aware that they could lose their jobs at any time — is coercive on its face and susceptible to exploitation and abuse.

Labor protection in the form of safety laws, collective bargaining and prohibitions against harassment and discrimination have helped cut down on many of the worst employer abuses. But no amount of labor regulation can ever undo the fact that workers are confronted daily with the choice between obeying a supervisor or losing all their income. The only way to break the coercion at the core of the employment relationship is to give people the genuine ability to say no to their employers. And the only way to make that feasible is to guarantee that working-age adults, at least, have some way to support themselves whether they work or not….

….True freedom requires freedom from destitution and freedom from the demands of the employer. Capitalism ensures neither, but a universal basic income, if successful, could provide both.

— Matt Bruenig, “Tired of Capitalism? There could be a better way“. The Washington Post.

The U.S. Government Programs Keeping Millions Out of Poverty

Americans across the political spectrum are conditioned to believe that the government safety net, broadly called “welfare”, is woefully inefficient. While it is no doubt true that public sector solutions are inadequate in many respects –something both major political wings agree on, albeit for different reasons — as the Economic Policy Institute (EPI) reminds us, these programs are the only thing keeping tens of millions of Americans out of poverty.

More analysis from EPI:

Social Security was by far the most powerful anti-poverty program in the United States last year, keeping 25.9 million people out of poverty. Refundable tax credits, such as the Earned Income Tax Credit (EITC) and the Child Tax Credit, kept 9.8 million people out of poverty. The Supplemental Nutrition Assistance Program (SNAP), aka food stamps, kept 4.7 million people out of poverty, while other targeted programs (such as housing subsidies, unemployment insurance, and school lunch programs) made it possible for millions more to keep their heads above water.

In 2014, 48.4 million people (or 15.3 percent of the U.S. population) were in poverty, as measured by the Supplemental Poverty Measure (SPM)—a more sophisticated approach for measuring economic well-being than the official federal poverty line. However, that number would have been significantly higher were it not for programs like the ones listed above. In the absence of stronger wage growth for low and middle-income workers, these safety-net programs play an increasingly important role in helping struggling families afford their basic needs.

Note the last sentence, which I have bolded for emphasis. The ever-more contentious debate about government expenditure on welfare would be a moot point if the private sector paid workers better and/or provided benefits, thereby precluding the need to turn to state programs. Simply put, most people would not turn to the government if there was more stable and liveable employment available. Until then, these flawed, threatened, and still vital programs are all that millions of Americans have.

America’s Changing Demographics

As The Guardian reports, an already-diverse American population is about to become even more pluralistic, as Europe’s historic role as a major source of immigrants shifts to Asia and Latin America.

An increase in Asian and Hispanic immigration … will drive U.S. population growth, with foreign-born residents expected to make up 18% of the country’s projected 441 million people in 50 years, the Pew Research Center said in a report being released on Monday.

This will be a record, higher than the nearly 15% during the late 19th century and early 20th century wave of immigration from Europe.

Today, immigrants make up 14% of the population, an increase from 5% in 1965.

The tipping point is expected to come in 2055, when Asians will become the largest immigrant group at 36%, compared with Hispanics at 34%. White immigrants to America, 80% back in 1965, will hover somewhere between 18% and 20% with black immigrants in the 8%-9% range, the study said.

Currently, 47% of immigrants living in the U.S. are Hispanic, but by 2065 that number will have dropped to 31%. Asians currently make up 26% of the immigrant population but in 50 years that percentage is expected to increase to 38%.

Immigrants from China and India will largely be driving the trend. The news might surprise most Americans given all the attention and concern regarding arrivals from south of the border; but with birth rates and economic prospects alike stabilizing, far fewer Latin Americans will be coming to the U.S. — though Hispanics will still remain the largest minority, owing to higher births within the country, rather than foreign arrivals.  Continue reading

Sweden Experiments With Six-Hour Workday

Count on the Swedes to explore an alternative to the traditional eight-hour workday. According to the Guardian, the effort was spearheaded by retirement home, whose overworked nurses opted to shave off two hours of every workday — without a reduction in wages — in an effort to improve their efficiency.

“I used to be exhausted all the time, I would come home from work and pass out on the sofa,” says Lise-Lotte Pettersson, 41, an assistant nurse at Svartedalens care home in Gothenburg. “But not now. I am much more alert: I have much more energy for my work, and also for family life”.

The Svartedalens experiment is inspiring others around Sweden: at Gothenburg’s Sahlgrenska University hospital, orthopaedic surgery has moved to a six-hour day, as have doctors and nurses in two hospital departments in Umeå to the north. And the trend is not confined to the public sector: small businesses claim that a shorter day can increase productivity while reducing staff turnover.

At Svartedalens, the trial is viewed as a success, even if, with an extra 14 members of staff hired to cope with the shorter hours and new shift patterns, it is costing the council money. Ann-Charlotte Dahlbom Larsson, head of elderly care at the home, says staff wellbeing is better and the standard of care is even higher.

Indeed, it is quite anomalous that people continue to work increasingly harder and longer despite the vast gains in productivity. Technological and administrative innovation has allowed people to do a lot more in an hour than ever before, so why should workers continue to strain themselves, often for meager compensation, to undermine these gains? Why shouldn’t productivity be used to its greatest effect, by allowing people to balance work and leisure to society’s benefit?  Continue reading

Germany, The World’s Moral Leader

The Economist observes how the refugee crisis has highlighted the German nation’s exemplary moral leadership, starting with this poignant statistic:

Whereas most nations struggle to accept even a handful of refugees, the Germans seem broadly enthusiastic about the idea, owing in part to their history. Continue reading

You Think Today’s Politics Are Bad?

Amid the understandable growing public disgust with the nasty and petty behavior of our public servants, the Baltimore Sun helpfully reminds us that politics really hasn’t changed all that much — if anything, it is a lot tamer.

Consider our first contested presidential election, in 1800, which pit two of our most famous statesmen — John Adams and Thomas Jefferson — against each other. It’s tempting to envisage them as wig-clad philosopher-kings, deliberating high-minded ideas in a calm and reasoned campaign.

It’s also false. Jefferson’s supporters said that Adams had secretly plotted to have one of his sons marry King George III’s daughter, to bring America back under the British crown. But if Jefferson were elected, Adams’ camp charged, the young nation would descend into anarchy and violence.

“Murder, robbery, rape, adultery, and incest will all be openly taught and practiced,” one anti-Jefferson newspaper predicted, “the air will be rent with the cries of the distressed, the soil will be soaked with blood, and the nation black with crimes.”

Another editorialist painted an even bleaker picture of life under a Jefferson administration. “Look at your homes, your parents, your wives, and your children,” he warned. “Are you prepared to see your dwellings in flames, hoary hairs bathed in blood, female chastity violated, or children writhing on the pike?”

To think that Adams, one of the most vociferous patriots of the American Revolution, being accused of selling out the country to the British? It must be hard to imagine our enlightened and gentlemanly founders resorting to such crude and provocative language. To be sure, much of this was being directed by supporters rather than the candidates themselves, but neither of the men seemed to have done much to reign in on such inflamed passions. Politics is politics, even for otherwise seemingly intelligent people.  Continue reading

U.S. Workers Need — and Deserve — a Raise

From the New York Times:

Flat or falling pay is self-reinforcing because it dampens demand and, by extension, economic growth. In the current recovery, median wages have fallen by 3 percent, after adjusting for inflation, while annual economic growth has peaked at around 2.5 percent. At that pace, growth isn’t able to fully repair the damage from the recession that preceded the recovery. The result is a continuation of the pre-recession dynamic where income flows to the top of the economic ladder, while languishing for everyone else …

… In a healthy economy with upward mobility and a thriving middle class, hourly compensation (wages plus benefits) rises in line with labor productivity. But for the vast majority of workers, pay increases have lagged behind productivity in recent decades. Since the early 1970s, median pay has risen by only 8.7 percent, after adjusting for inflation, while productivity has grown by 72 percent. Since 2000, the gap has become even bigger, with pay up only 1.8 percent, despite productivity growth of 22 percent.

Why has worker pay withered? The answer, in large part, is that rising productivity has increasingly boosted corporate profits, executive compensation and shareholder returns rather than worker pay. Chief executives, for example, now make about 300 times more than typical workers, compared with 30 times more in 1980, according to the Economic Policy Institute. Other research shows far greater discrepancies at some companies.

In most companies, there is plenty of money to go around, thanks in no small part to the contributions of hardworking Americans. Isn’t it about time they get their money’s worth? Shouldn’t they, too, get a cut of the profits they helped produce? Or at least a better and more stable working environment?

Is The Constitution What’s Wrong With America?

The Atlantic’s Yoni Appelbaum makes the provocative case that what ails the United States’ political system is the very document it is founded upon. Put another way, the problem with America today is not that it has deviated from the Constitution, but on the contrary, its politicians and citizens remain too true and reverential to it.

This is idea is drawn from The Royalist Revolution: Monarchy and the American Founding, a 2014 book written by Harvard political theorist Eric Nelson. The argument begins by tracing the roots and sentiments of the American Revolution to Britain’s own historical debate about executive versus legislative power. It is a long excerpt, but it is well worth reading, since this is an often-overlooked context and influence for the Patriots.  Continue reading

Economic Snapshot: Why the Average American Worker Should By Making $3,770 More

From the Economic Policy Institute (EPI) comes the ever-important reminder of how the U.S. economy, for all its size and relatively robust growth, has failed to benefit the average worker.

Between 2000 and the second quarter of 2015, the share of income generated by corporations that went to workers’ wages (instead of going to capital incomes like profits) declined from 82.3 percent to 75.5 percent, as the figure shows. This 6.8 percentage-point decline in labor’s share of corporate income might not seem like a lot, but if labor’s share had not fallen this much, employees in the corporate sector would have $535 billion more in their paychecks today. If this amount was spread over the entire labor force (not just corporate sector employees) this would translate into a $3,770 raise for each worker.

Here is a visual of the data, which shows just how wide the gap is by historical standards. Continue reading

How Visible Inequality Erodes Communities

Poverty and inequality are bad enough on their own, but a recent Yale study published in Nature suggests that the mere visibility of income disparity can be socially and psychologically disruptive. As The Atlantic reported:

“Making wealth visible was a very corrosive force. It resulted in the rich exploiting the poor”, said Nicholas A. Christakis, the co-director of Yale Institute for Network Science and one of the senior authors of the study. When wealthy people find out that their neighbors don’t have the resources they do, researchers find, they’re less likely to help them, or anyone else …

… Researchers found that when rich subjects knew that their neighbors were less wealthy than they were, they became less likely to cooperate with them. The poor, however, chose to keep cooperating. This leads to what researchers call an exploitation scenario, in which the poor keep lowering their own wealth to invest in their local network, “making them worse off relative to their neighbors and allowing the rich to get richer”, the researchers write.

When rich subjects don’t know the wealth of their neighbors, though, they are more likely to cooperate than are poorer subjects. This leads to what researchers call a “fairness” scenario, in which the rich invest their wealth into a local network, which then grows richer as a whole.

Overall, visible poverty reduces overall cooperation, interconnectedness, and wealth. But inequality itself has “relatively little” impact on cooperation or interconnectedness. “Most people thinking about inequality today may be confusing two distinct phenomenon”, Christakis told me.

This might explain why famously egalitarian societies like Sweden and Japan tend to report higher than normal levels of social cohesion: not only is income broadly distributed, but any disparity that exists is plastered over through public policy and communitarian values. Broad access to education, healthcare, and quality housing means that the material markers of poverty are absent. There are also cultural taboos against the ostentatious displays of wealth and conspicuous consumption that are common in the U.S. and elsewhere. No doubt these factors make cooperation and social trust a lot easier, as people do not feel worlds apart despite what their actual incomes and lifestyles might be. Continue reading