Busting Myths: Will Universal Basic Income Help Everyone?

 

The idea of adopting a universal basic income has become progressively more popular over the last few years. The idea is utterly simple (though models vary): Have the government send every adult citizen a check for a pre-set amount each month. The stated goal of adopting a universal basic income is to eliminate poverty, the assumption being that if the government sends every adult $10,000/year that everyone who was formerly made total yearly earnings below the poverty line would now be above it. While this system seems like it would be beneficial in theory, it would be an unmitigated disaster, like any other wealth redistribution system.

While a universal basic income program sounds to be both helpful and humanitarian on its face, it would lead to serious problems, first and foremost because it would disincentivize labor. Some view this as a good thing, holding that it will both allow for people to survive as jobs are phased out by technological advancements, and also that it will allow more entrepreneurial types to take bigger risks thanks to this assured basic income. This thinking has two major flaws: Firstly, jobs are not eliminated by technology, but instead the needs for labor are simply changed by new technology. When the automobile first began to be produced, the market demand for buggy repair certainly fell, but no market opportunities were eliminated, instead new demand arose for both the production and maintenance of automobiles. This has been the same throughout history, and always will be, technological advances do not harm the market, they simply change it (and often allow for greater productivity, and higher standards of living). Second, the money required to fund such a program which could have been used to invest in entrepreneurial endeavors will have been funneled out of the market and redistributed in such a way as to limit the investment capital available to reward good ideas. Good ideas are wonderful, but they require capital (in the form of labor, time, and currency) to be brought to fruition no matter how good they may be.

Proponents of the universal basic income argue that not only would it allow for more entrepreneurial endeavors, but that it would also eliminate poverty altogether. The idea goes like this: “The poverty line is $11,000. If we give everyone a total of $11,001.00 each year, nobody will live below the poverty line anymore.” This argument, either ignorantly or intentionally, ignores the fact that whether or not someone is wealthy or poor is always relative. There’s a joke about an economist who was asked “How’s your wife?”. He responded “Compared to what?. It’s a silly, terrible pun, but it gets the point across. The people with the smallest income in any given economy will always have a hard time, and raising the floor of the economy artificially by giving everyone a check doesn’t bring anyone out of poverty, it simply adds a few zeroes to everyone’s income.

Raising the floor of an economy doesn’t lead to greater wealth, either in the short-term or the long-term, it simply puts more people at floor level. The laws of supply and demand still rule supreme over economics, so when you add a few thousand dollars to everyone’s income, prices for goods and services will rise in response, since demand will either remain steady or even rise while supply remains the same. Economic improvement is always a product of raising the ceiling of the economy, rather than raising the floor. Prosperity is caused by advances in production, and through those advances raising the total supply of a given good or service relative to the demand, making it more readily available to everyone. Just as you can’t make a blanket longer by cutting a chunk off one end and sewing it onto the other, you can’t make everyone wealthier simply by ensuring they all receive the same minimum amount.

Another argument goes that a universal basic income program would “pay for itself”, which is  plainly silly.  The claim is that if a universal basic income were put in place, that every other government welfare program could be eliminated because people would no longer need or want them. As has been shown earlier though, universal basic income would not provide the kind of prosperity to ensure nobody would rely on other government programs. On top of that issue, it would cost at least $2 trillion to give each working age adult in America a basic income that would put them over the current poverty line. Governments do not have anything which they did not first take, and thus any government program must be funded by plundered wealth. This is both ineffective and immoral. It is inefficient because it interferes with the regular forces of the market and private charity by adding in an additional layer of government bureaucracy, an unnecessary and unhelpful middle man. It is immoral because it violates the property rights of individuals. The right to life is the most basic of all human rights, but the right to use and dispose of one’s property in any manner he sees fit is the necessary corollary to that right, and without this right it becomes impossible to sustain one’s life. Though a universal basic income may have a good end in mind (eliminating poverty) to achieve that end through immoral means is thoroughly unacceptable.

The universal basic income is a nice idea in theory, but if applied in the real world, it would be a complete and utter failure. Universal basic income would disincentivize labor across the board by eliminating a certain portion of the felt need to work for everyone. It would do nothing to eliminate poverty because it would only raise the floor of the economy rather than raising the ceiling, and it would need to be funded through immoral means, depriving people of the rights to use their property however they may see fit. Though this program sounds to be helpful on its face, when examined further we find that it lacks the ability to accomplish what it sets out to do, and does so in a less than desirable way. The only way for prosperity to be advanced for everyone  is through the means of free trade, which motivates inventiveness, labor, and service for one another. Attempts to get around this simple fact will come and go, and take many different forms, but ultimately universal basic income will fail like all the rest if it is implemented.

 

Busting Myths: Do Women Earn 23% Less Than Men For The Same Work?

Recently at the 2015 Oscars, Patricia Arquette used her acceptance speech for best supporting actress to explain the need for “wage equality” for women. She based her speech off the entirely too often quoted statistic that women earn 77% as much as men for the same work. There’s a funny thing about statistics though, if you remove all the variables and qualifying information, you can make them say anything you want, even something that is patently false.

There are a wide variety of factors contributing to the perceived gap in pay between men and women, and it would be worthwhile to look at a few. The first one has to do with occupational choice. According to the Federal Reserve Bank of St. Louis:

“Men are more likely to be lawyers, doctors and business executives, while women are more likely to be teachers, nurses and office clerks. This gender occupational segregation might be a primary factor behind the [gender] wage gap.”

While there’s nothing wrong with being a teacher, a nurse, or an office clerk (in fact these jobs are good, important, and helpful), the simple fact is that there are a great deal many more people qualified to work as a nurse or a school teacher than there are qualified to work as a doctor, a lawyer, or a high level executive. Given the higher demand relative to the available supply for these jobs, they tend to pay higher wages.

Another major factor contributing to the perceived gap in pay between men and women is the choices made by men and women when it comes to the option of payment either in cash, or in cash plus non-cash benefits. Research shows that women prefer a higher percentage of their compensation in non-cash benefits (like health insurance, paid parental-leave, etc.), which the people railing against a perceived gender wage gap totally ignore. The Federal Reserve Bank of St. Louis explains:

“Some researchers believe that it is not enough to compare wages of similar men and women. They argue that total compensation (wages together with benefits) must be compared. Women of child-bearing age may prefer jobs with a lower wage but with employer-paid parental leave, sick leave and child care to jobs with a higher wage but without such benefits… Economists Eric Solberg and Teresa Laughlin applied an index of total compensation, which accounts for both wages and benefits, to analyze how these benefits would affect the gender gap. They found a gender gap in wages of approximately 13 percent. But when they considered total compensation, the gender gap dropped to 3.6 percent.”

From this we can gather that any measure of earnings that excludes fringe and other non-cash benefits will produce misleading results as to the existence of any sort of wage gap caused by gender discrimination.

So, we can see that two major factors in compensation are occupational choice and qualification, and additionally the choice in type of compensation. Another major factor in total compensation, (even in cases where men and women work in the same general occupation) is the total number of hours worked. For any variety of reasons, women tend to prefer more flexible hours, and tend to work shorter hours than men. Flexible hours are a wonderful thing, however they do come at an economic cost, since hours of work in most occupations will be more valuable to the employer if they are worked on a more consistent and linear basis. A bird in the hand is worth more than two in the bush to most people, and so one can expect a higher rate of compensation if they are able to offer more labor, and more importantly, more consistent labor.

Ultimately the complaints of those rest not in economic statistics or an understanding of supply and demand, but rather in (whether consciously or not) Karl Marx’s labor theory of value. This heterodox theory has bled into the discussion of wages far too much, when the discussion should instead be focused on human choice. We all want what we want, when we want it. We all want to get what we want at the lowest cost possible for us, and we all make choices based off of our desires. Because of this truth, economic value is always ultimately subjective and dependent on personal preference of individuals. The economic value of work is always subjective, and dependent on a complex series of decisions of a larger mass of individuals, making it clear that myths such as “women earn 77% of the money men do for the same work” are silly, and not based in any honest economic analysis.

Once variables such as hours worked, occupational choice, and varying types of compensation are accounted for, there is no discernible gap in the wages which men and women earn for similar work. The difference in overall wages earned between men and women reflects a different series of choices and preferences when looking at each sex more broadly, and there is nothing wrong with people making these choices free of coercion. However, there is something very wrong with presenting half-truths and lies about complex economic issues, and there is something far worse in asking the state to fix the perceived problem with the use of violence. Trade is about using your given set of skills to improve your own station along with the station of others by means of free exchange, and when the state interferes, it ends up harming everyone, men and women alike.

Busting Myths: Can Jobs Be Stolen?

When dealing with issues such as immigration or unlicensed taxi services like Uber or Lyft, it’s not at all uncommon for people with full citizenship in a given country or a license to perform a given service to complain that their job has been stolen from them by someone who undercuts them on price. Be it an immigrant worker taking a job at a rate below minimum wage, or a ridesharing service driver operating without being government approved to offer the simple service of transporting someone from point A to point B, people who lose their jobs to this competition will be frustrated and upset over their job being “stolen”. While their frustration with losing their job is understandable, their moral indignation is not. Ultimately jobs are not property, and because they are not property they cannot be stolen.

A job is simply an agreement of exchange between two or more parties. For example, party A agrees to provide party B with X amount of widget Y in exchange for Z number of hours of labor. Now, where is the property here? There is an agreement for the exchange of certain properties, such as time, labor, and goods, but there is nothing in this agreement itself which is property, and so it cannot be owned by anybody.

By the same token, nobody really “creates a job.” They simply enter into an agreement to exchange one good or service for another. This is one of the problems of those who try to stifle competition from entering into their market. The taxi company that has gone through the bureaucratic channels to provide service with government licensing claims to have “created new jobs” for people willing to drive for a living, however they have not created anything, any more than I can create a house by acquiring a license as a construction contractor.

An agreement or contract can certainly be violated, but if my employer decides to terminate their agreement with me in order to pursue one along with someone else, they have not stolen anything from me any more than I would have stolen from them if I decided to leave one job to pursue another means of employment which I felt would be more beneficial to me. Theft can only occur by the means of fraud or force, and neither of these things happen when a party to a given trade decides to move on.

Jobs are not property, and since jobs are not property, it is impossible to steal them. Jobs are not creatable, they are simply agreements between two or more parties for exchange. If this were properly understood, everyone would prosper more. Rather than wringing their hands over losing customers to ridesharing services, larger taxi companies which formerly enjoyed government granted monopolies would actually improve the quality and quantity of service which they provide to customers. Persons banking on their citizenship as an assurance of job security would realize the need to provide better service to their customers, and proper, fair market competition would reign again. As always, more fair and open competition benefits everyone involved and ultimately leads to greater prosperity in terms of real property.

 

Why A Curfew In Ferguson Is The Wrong Choice

Governor Jay Nixon has instituted a state of emergency in Ferguson, Missouri, and enacted a curfew between the hours of 12 and 5 am. This is completely unacceptable, and a furthering of the brutality which we have already seen since Mike Brown was killed last week. Recognizing that there has been looting, rioting and vandalism, these crimes are specific to those that have committed them, and if the state wants to punish them, they should not punish others as well. Not only this, but they have no right to constrain persons to specific locations without first getting a conviction.

If Governor Nixon is intent on punishing the looters, the vandals, and the rioters, so be it, but only through the appropriate means of due process of law. Innocence until proof of guilt is still a fundamental right, and that doesn’t change just because Governor Nixon and his subordinates have woefully and abusively mishandled this situation from the beginning. The rights of the people in Ferguson (both those who have committed crimes during the protests and those who have not) don’t cease to be because it’s a certain time of the day, nor because the situation is difficult for the state to handle. In the entire course of human ethics, ends have never been a justification for means, and that hasn’t changed over the course of this week.

Morality is not about producing the “best” result, it’s about doing the right thing. Using and initiating unlawful force isn’t okay in the interest in preventing other unlawful force, and that doesn’t change because the governor of some state signed a slip of paper. Enforcing a curfew under threat of violence, kidnapping, or fine is a claim to own the persons placed under the curfew, which the state has no right to. Just like any person anywhere else, the people in Ferguson have a right to their own persons and property, and have a right before the state to dispose of these things however they wish, at whatever hour they wish to. If Governor Nixon is interested in resolving the mess which his administration has both caused and made worse through their brutality, he’s welcome to do so, but not through further aggression.

Ferguson Shouldn’t Be About Race

A protestor throws a lit can of tear gas back at police in Ferguson, Missouri.

 To call the situation in Ferguson, Missouri over the last few days serious would be a gross understatement. There’s a lot going on, a good deal of misinformation, and an abundance of race related discussion. However, race should not be the issue here. The level of melanin in the skin of the victims or aggressors isn’t really all that relevant when it comes down to it. The real issue at hand is the use of force and the way in which the state aggressively expands its powers and takes away individual rights in the face of a potential crisis.

What do we know so far about this situation? First, we know that Mike Brown is dead at the hands of a member of the Ferguson, MO police department, shot and killed on Saturday. Whether the officer used lethal force justly or not is something we don’t know and won’t know for a while.

Second, we know that some of the residents of the town went out looting and rioting on Sunday, causing unnecessary damage to the property of persons who had nothing to do with the killing. We know that this is wrong.

Third, we know since then that there have been huge militarized police forces in the town. We know that these forces have refused people the right to peaceably assemble on a number of occasions. We know that they have repeatedly used tear gas on non-violent protestors, sometimes on people in their own yards. We know that they have used rubber bullets on other non-violent groups. We know that an LRAD sound cannon was used on a group of non-violent protestors. We know that the airspace has been restricted. Plain and simple, this is a de facto institution of martial law, accompanied by extreme and unnecessary violence to maintain it. We know that the police in the town have arrested members of the press, and fired tear gas on camera crews before dismantling their equipment.

This is not about race, it is about excessive and illegitimate use of force. No person who has not committed acts of aggression should be faced with any force, but this is what routinely happens.  No person should have their right to free speech limited by the state, members of the professional media or otherwise. No person should have tear gas fired at them in their own backyard (or anywhere else for that matter) when they have committed no violent crime.

This problem isn’t about race, it’s about the clear and present fact that the American state is completely out of control. The crisis in Ferguson not a glimpse into a potentially horrific future, it’s a current picture of state brutality and lawlessness. This is what happens when there is a monopoly on the legal use of force. If you give a group the right to use force to get what they want, turns out they’ll make use of it, even in situations in which they ought not to. After all, they’re human too, and just as subject to faults as the rest of mankind. It is clear that the tendencies of the organizers are not always good, nor are they often good. The situation in Ferguson may be deescalated soon, and we should certainly hope it is. Even so, we shouldn’t be quick to forget it. The police brutality in Ferguson is not about race, it’s about yet another abuse of power, and it has to stop. 

Uber and Lyft: They Took Our Jobs!

“We are not attempting to curtail commerce. What we want is if they are going to do business here they have to follow the rules.” After reading this quote and the accompanying story, I fired up my trusty rusty statist translator, and this is what came out:

“We’re not attempting to curtail commerce, but if you don’t give us money and get our permission to freely trade services for currency, we will use force to either imprison or extort more money from you.”

Jokes aside, this is a very real problem. The state, and taxi drivers whose monopoly on this portion of transportation has been maintained by the state are attempting to forcefully stop competition from entering the taxi marketplace. This is not free market enterprise, this is coercive force regulating the market. The city of Memphis (and a number of other municipalities around the country) are attempting to squash the competition that these startups are providing to the market. The existent rules Memphis officials are so desperate to maintain do not exist to promote safety, they exist to ensure the city gets its cut of the pie, and continues to receive the support of taxi drivers who have taken advantage of a system that allows them a legal monopoly on the market.

Uber and Lyft are not doing any wrong or otherwise harming anyone by not having a state license to operate. Funny enough, the controversy with Uber and Lyft is actually a solid analogy for the immigration controversy as well. The problem is not people entering a marketplace without a license. There is no transcendent moral law that requires everyone have a license to do their job (which is what U.S. citizenship ultimately boils down to, a license to seek employment in the country and a requirement to pay taxes on the goods earned from that employment).

The problem in this situation is that the state believes they can require someone to have a license to work, and that they believe they are entitled to a share of the profits of that person’s labor. Get rid of the forceful and unethical state regulations of the marketplace, and allow the best businesses (and best individual workers, wherever they may be from) to freely compete for a share of the available demand. This is the solution to the ongoing controversy surrounding Uber, Lyft, or any similar ride sharing services. Deregulate, decentralize, and stop creating and enforcing laws that artificially slant the market one way or the other. In the absence of state favors to compete for, services will begin to compete for a share of the market by better serving consumers. Everyone (except the state) wins.

Human Nature

A common objection from reformed conservatives against libertarian theory is that it fails to take human nature into account. They claim (since) men are totally depraved that a substantial civil authority is necessary to ensure that society remains morally upright. However, this objection misses one important point: Every man in a position of governmental authority is just as depraved as any other. Frederic Bastiat deftly points this out:

“If the natural tendencies of mankind are so bad that it is not safe to permit people to be free, how is it that the tendencies of these organizers are always good? Do not the legislators and their appointed agents also belong to the human race? Or do they believe that they themselves are made of a finer clay than the rest of mankind?”

This is an important truth to keep in mind when dealing with the wickedness of men. No wicked man ceases to be wicked when you give him a badge. Bad trees still yield bat fruit even when given authority over others. One can certainly try to limit the damage by only giving power to the most upright of men, but this will still not ensure the just behavior of anyone, be they rulers or subjects. Even David, the “man after God’s own heart”, a king operating in a constitutional minarchy, enslaved and murdered a man through the means of conscription because he had a desire for a woman who was not his to have. Solomon, arguably the wisest king to ever rule the earth, blatantly disobeyed the law regarding kings by having over 700 wives. Even the best of those who are granted in positions of power are still liable to commit gross and heinous sin, just as much as anyone else.

Laws, in and of themselves cannot limit the wickedness of men. The fear of punishment may act as a temporary, imperfect deterrent against immoral behavior, but the only true answer to man’s fallen nature is the gospel. Just as we should not treat the state as God the Father by asking it to provide us with our daily bread, we should not treat it like God the Holy Spirit and expect it to perform regenerating work on the people over which it rules.

The state should not exist to do anything more than to preserve man’s right to not have himself or his property aggressed against. We already have two institutions for teaching and enforcing Christian morality, the church and the covenantal family, and not only do we not need another, but we ought not to add one either. Want to improve the moral structure of a society? Good, then practice pure and undefiled religion. The answer to moral decay in any society is not to use the forceful arm of the state to inculcate children with Christian ideals, to rob our neighbor to support our churches, or to wage aggressive wars in regions dominated by other religions. Christ certainly commanded His apostles to sell their cloaks and buy swords but these swords were not for aggressive fighting. Instead, the apostles were instructed to have the means for their own defense as they continually labored to fulfill all that had been commanded of them. This is made even more clear by Paul, when he states that “the weapons of our warfare are not of the flesh”. The calling of the Christian life is not to aggressive, carnal warfare, but is instead to the building of Christ’s kingdom.

Human nature is totally depraved, that is, it is inherently inclined towards wickedness. However, the fix for this problem is not a baptized Leviathan state, and this solution will never work. The answer is and always has been the gospel of Christ. No state program will fix our moral ineptitude, nor will any state program be able to maintain improved moral behavior. The only means by which the behavior of individual men (and subsequently larger groupings of these same individuals) is for them to be granted new life through the power of the Holy Spirit, and to receive the sanctification promised to all men who receive this new life. There is no other fix for this problem, so perhaps we’d best go start baptizing and making disciples like Jesus said to in the first place, rather than asking the state to do so by force.