Posting on social media, Facebook founder and chief executive officer Mark Zuckerberg promoted the creation of a national universal basic income (UBI) program to distribute regular sums of money to all individuals, without income cutoffs or other forms of means testing.
Zuckerberg praised Alaska’s Permanent Fund Dividend, an annual entitlement program distributing government money to residents, funded by taxes paid by energy companies doing business in the state.
Alaska’s redistribution fund could provide a model for a national UBI using “conservative principles,” Zuckerberg wrote on Facebook on July 5.
“One thing that stood out to us is how different Alaska’s social safety net programs are in a way that provides some good lessons for the rest of our country,” Zuckerberg wrote. “First, it’s funded by natural resources rather than raising taxes. Second, it comes from conservative principles of smaller government, rather than progressive principles of a larger safety net. This shows basic income is a bipartisan idea.”
End of Welfare State?
Yaron Brook, president and executive director of the Ayn Rand Institute, says UBI could work if it completely replaced all government welfare programs.
“The ideal UBI would replace all forms of welfare, all forms of health care subsidization, and I would even add education to that list,” Brook said. “If you incorporated that into one lump sum that you gave to every citizen—and you’d have to give it to everybody, because you don’t want to create the situation where getting off the UBI would create a disincentive—and then you tell people that they’ll have enough money to buy their own education, to buy their own insurance, to take care of their rent and basic food—’You have no excuses; go do it’—you’re getting the government involved in nothing.”
‘This is Science Fiction’
Despite these advantages over the current welfare system, UBI wouldn’t work in the real world, Brook says.
“Now, this is science fiction—this would never happen—but this would be my ideal UBI,” Brook said. “It has a certain appeal under this system, because it gets rid of so much government intervention [and] government bureaucracy. Hundreds of thousands of government workers would have to find productive jobs.”
People want to succeed and not just survive, Brook says.
“At the end of the day, people don’t just want to exist at that minimal level,” Brook said.
“They want to be successful. The incentive to be successful would drive people out of UBI, but there would be a certain class of people who would just get sucked into it and never leave.”
Weakening the Work Ethic
Bryan Caplan, a professor of economics at George Mason University, says a UBI would have “horrible” consequences.
“If the UBI’s level is anywhere like what most people think would be a good idea, the incentive to work would be very weak,” Caplan said. “If you actually had a system where, if you did zero, you would get $10-20,000 a year, then the effects would be horrible.”
Costs, Effects Unknown
A UBI would significantly reduce economic production, Caplan says.
“You’d have to raise taxes enormously, if you just look at the budget numbers and look at what the government currently takes in,” Caplan said. “You’d have to have various taxes, and those high taxes combined with the fact that you get money for not working, would lead to a big drop in production.”
Implementing UBI without knowing the exact price tag would be disastrous, Caplan says.
“Most people just want to fudge the question or kick the can down the road, saying, ‘Well, let’s just get one and see what happens,'” Caplan said. “[That] seems like a very poor strategy for executing a multitrillion-dollar program.”