Andy Snyder on the Pros and Cons of Universal Basic Income
Samuel Taube: Joining us again today is Andy Snyder, the former editorial director of The Oxford Club and, more recently, the founder of Manward Press.
And today we are talking about the pros and cons of the controversial policy idea known as universal basic income. Andy, thanks for joining us again.
Andy Snyder: Thanks for having me back. I appreciate it.
ST: Yeah, sure. I think every time you come on the podcast, one of us is sick, so bear with us here.
So as we often do, let's just start with a basic definition here. What is a universal basic income policy, and what problems does it seek to solve?
AS: Sure. So the term's kind of a broad one, and you can define it in many ways, but the simplest way is it’s kind of the fairest welfare program of them all. So basically the idea is to give every citizen in a country or a state a set basic minimum income.
Some countries have defined it as the poverty level. They give you enough to keep you above the poverty level. Other countries are looking at different figures above and below that figure, but the main goal is to keep people out of poverty.
That's the main thing that politicians consider when they're looking at this idea. They say hey, if we give every citizen in the country enough to stay above the poverty line, then we get rid of poverty in our country. And that's what they're aiming to do. Whether it does it or not is yet to be seen.
ST: Okay. Pretty simple idea. Now, are there any countries or even just states or municipalities that have a policy like this?
AS: Sure. So there's nobody really officially doing it in a big way.
Probably the biggest headline getter lately would be Finland. As a country, earlier this year, in January 2017, it embarked on a pretty big and ambitious experiment to start handing out money. It handed out about $645 to I believe it's about 2,000 citizens. Every month, they get the $645.
And so what the government is doing, along with scientists and researchers, is just seeing what effects that has on the economy, on the people and on the country in general. And so far, the results are very mixed, and of course it's very controversial.
The problem in Finland is a liberal government kind of started the program, and now a Republican or a conservative government is implementing the idea. So the new government isn't really fond of it. The people who got it started are out of the equation.
Some other places that are doing it are right here in the United States. Oakland, California - which most folks don't know about - Y Combinator, the startup incubator, is giving I believe it's 100 families in Oakland $1,000 a month.
And they're just doing the same thing, seeing what's going on, what happens to them and how it turns out.
Alaska has a similar program. It's probably the broadest program in some ways because it goes to every citizen in the state, whether they're 2 years old or 98 years old. But it's a smaller sum. I think the biggest it ever was was $3,700 per person.
Right now it's down toward $900 a year. So it's not going to pull somebody out of poverty, and in most instances it puts a really nice four-wheeler in somebody's yard or buys them a trip to Hawaii every winter.
ST: And I remember you wrote about that in Manward Digest. Is the Alaskan dividend funded by oil money? Or how does that work?
AS: Sure. It's natural resource money. We all know Alaska has a lot of natural resources.
Right as the government was starting to open up the lands to resource mining, gas drilling, that sort of thing, they realized that - and the people really pushed for it - that gas, that oil was the people's oil.
And so the government put a lot of the money into a fund, and that dividend each year gets paid out to the citizens of the state.
ST: Cool. I see. So what are some pros and cons of this type of universal basic income policy?
AS: Sure. The biggest pro, even from a conservative side: A lot of conservatives like the idea because it shrinks government waste.
In the purest form, universal basic income goes to everybody regardless of their unemployment status, regardless of their income status. It goes to everybody.
And it replaces the welfare state, so people get this money - that means they're no longer getting Social Security programs, they're no longer trying to get one over on the government and get something they don't deserve. So it gets rid of a huge arm of the government bureaucracy, which is very good.
The other side of it is there's a legitimate argument to get rid of poverty. The evidence still isn't there 100%, but I mean, we give people $16,000 to $20,000 a year, that's another $16,000 or $20,000 a year that they can spend on groceries or whatever.
That ties directly into a con: What does all this do to inflation? If everybody has another $20,000 in their pockets, do prices just naturally rise by $20,000 and the poverty line goes up with it and we end up just chasing it?
The other con, a really big one, is who pays for all this? And why is the government giving free money away? Why is that the government's job? Why isn't it a church's job, or why isn't it a family's job to make sure their people are okay?
And that's what a lot of people are really asking: Why does the government, this big entity that we really don't control, have the power to make sure that we all have money and why is that their job?
ST: Right, makes sense. And from reading your recent e-letters, I understand you're not quite a supporter of most of these ideas, and I imagine you touched on some of the reasons when you listed some cons.
What is your personal reason that you're not a fan of UBI?
AS: Sure. My personal reason is the government's role in it all. I don't think the government should take money from me or anybody else and give it to somebody else.
I'm not saying that because I don't believe somebody is poor or can't generate an income for whatever reason - I'm not saying it because it's their fault or their problem.
I'm saying that because it creates economic ripples and has immense side effects that most people just don't understand. As soon as you give free money away, it changes the motives, the intent of our whole society, and it just sends dangerous waves through the economy.
ST: I see. Now, although you consider yourself an opponent of UBI, you recently wrote a rather controversial and very interesting essay in Manward Digest in which you advocated for kind of a similar variation on this.
I think you called it “universal required service.” Can you tell us a bit about that?
AS: Sure. And so this is kind of a throwback to some efforts that happened in the 1930s, and some folks who read the essay tied it to the draft. And that's not really the intent.
The intent is that every man between the ages of 18 and 23 has to serve their country in some way for two years. That doesn't mean they have to go in the military or fight a war or something like that. They just have to serve the community in some way.
That means they can do anything from - a lot of listeners may remember the Civilian Conservation Corps. They blazed a lot of trails. They built roads in our state and national forests. We can start programs like that; we have programs like that. Folks can go overseas and build houses, do whatever as long as they're serving the country.
And they're getting paid for this, by the way. It's not, you know - a lot of readers equated it to slave labor. The only thing they're being forced to do is to do something.
And the main goal of this is to break the cycle. We look at the news over the last week, over the last few months, and we just see trouble throughout America. Our culture is broken.
So if we can get kids out of the traps of the urban environment, out of the poor, rural environments, and move them, just get them to experience new things, do new things and serve their country, the effects of it will be immense.
There are very few people who have ever gone in the military and said, hey, I regretted spending those four years traveling the world and learning things.
So if we can break that cycle and get people out of their environments, so many people say, hey, I want to go to college but I can't afford it, or I want to get out of this town but I can't afford it, this is their opportunity.
They can go on the government's dime and make some money, get out of going to college and getting $100,000 in debt. Start life by getting paid and doing good work.
It'll just open their minds and open our society to doing what's good for the country instead of what's good for ourselves.
ST: Yeah, makes sense to me. Definitely an interesting and admirable idea.
If you want to learn more about Andy's views on these things, then check out his subscription-only newsletter, Manward Letter. You'll find a link at the bottom of this transcript. Andy, thanks for joining us again.
AS: Thank you, Sam. I appreciate it.