UBI and the Road to Serfdom

Many people think that a universal basic income (UBI) would be a good substitute for the welfare state. Under this proposal, each person resident in a country would receive a guaranteed income, sufficient to live at a modest level. People would get the money unconditionally. Unlike welfare payments, the UBI would not be lessened if people earned money in addition to the amount it provided, and, because it is not means tested—absolutely everyone gets it, even billionaires—it requires no complex bureaucracy to administer.

Article by David Gordon from Mises.

The UBI would cost a great deal of money, but its defenders claim that since it is a substitute for the welfare state, we would also save the vast amounts of money now required for financing welfare programs. Further, if our economy continues to grow, at some point the UBI will become affordable. Charles Murray, for example, in a short book published a number of years ago, says of his version of the UBI, “I began this thought experiment by asking you to ignore that the Plan was politically impossible today. I end proposing that something like the Plan is politically inevitable—not next year, but sometime…. Real per capita GNP has grown with remarkable fidelity to an exponential growth equation for more than a century” (In Our Hands, AEI Press, 2006, p. 125).

The critics of the UBI aren’t convinced and still claim the program would be too costly to implement. In a recent book, Universal Basic Income – For and Against (Rational Rise Press, 2019). Antony Sammeroff offers a very able account of this controversy and many other issues connected with the UBI. He gives an especially good analysis of the argument that automation is liable to make so many people unemployable that a UBI will be needed to provide for them. But what I’d like to discuss this week is another argument that Sammeroff deploys to great effect against the UBI.

The UBI, Sammeroff reminds us, is a government program, and we ought always to view the state as an enemy of liberty. It is precisely the feature of the UBI that its supporters emphasize, its universal coverage, which would enable to state to exercise tyrannical control. Sammeroff says,

Now a Basic Income Guarantee may begin universal, but as the years wear on and it proves expensive to grant, corners may be cut to ensure its continuance. Hardly anyone will object to the UBI being withdrawn from criminals, for example. And then perhaps for anti-social behavior. Petty crimes, like littering the street, might lead people to receive a penalty against their UBI. A few might moan that this is the beginning of a government social-engineering program, but to most people it will seem like quite a sensible and reasonable measure…. Clipping people’s Basic Income will soon seem the most sensible and appropriate response to many crimes and misdemeanors. (p.148–49)

Not only could the state use the UBI as an instrument of social control; we have every reason to think those in charge of the state would exercise their power for bad motives.

This is the same class of people [who] launched a permanent war in the Middle East wasting trillions of dollars and destroying millions of lives. They bailed out the banks from the public purse and gave themselves raises after telling the rest of the nation that we had to tighten our belts. They have robbed the young of the opportunity to own a home by sending house prices through the roof, and mean to leave them a nation in ruinous debt. (p.147)

Sammeroff’s argument here is consistent with the contention of Hayek’s Road to Serfdom, summarized in the title of chapter 10, “Why the Worst Get on Top,” but it is not quite the same. Hayek argues that rulers will very likely be bad, but Sammeroff’s point is not dependent on this thesis. His claim is rather that the evidence shows that our present rulers are bad and will remain so. Thus they can be expected to abuse the UBI program.

Sammeroff strengthens his case that the UBI poses a threat of tyranny by using an admission from Charles Murray, who, as mentioned above, is a pioneering advocate of the program. He acknowledges that the UBI would require people to have a “universal passport” and “known bank account.” Making the most of these admissions, Sameroff says,

I don’t think it’s unrealistic to imagine that people may soon be forced to accept a mandatory Government ID Card in order to claim their Basic Income. Before long they will be asked to show it in order to get into government buildings. Then at the airport to get on a plane. Then simply to board a train or a bus. Then to post a package. Then to get into a bar. Then a restaurant. Before long every public place will ask you to show your ID card…. you will be expected to produce it in order to vote, and before long not voting may result in a fine as well…. Just as states freeze the assets of suspected fraudsters, they will soon be freezing the “known bank account” of political dissenters. By the time they come for those with radical ideas about freedom from government tyranny there will be precious few left to speak out for us. (pp. 151–52)

One might object to this that the state is capable of demanding a government ID card and controlling people’s bank accounts without the UBI, but why give the government an excuse to perpetrate such horrors on us? Sammeroff notes that it is the poor, supposedly those who would gain the most from the UBI, who would be most vulnerable to its abuse:

Certainly, the poor, who depend solely on their handouts to survive, will quickly become very cautious of what they say and do. But even reasonably affluent people will think twice before risking the money. The UBI institutionalizes the state as patron, and citizen as ward. Before long we may arrive in a frightening era where payments and penalties are used to mould us into compliant little drones. The utopian dream will have descended into a tyrannical nightmare. (p. 152)