Twin Review: Universal Basic Income from 1938 to 2018

I recently stumbled upon something I didn’t know existed: the very first novel by Robert A. Heinlein that was written in 1938 and remained unpublished until 2003, long after his death. It is clear from the very first page why he couldn’t sell it to publishers in 1938: it challenges the contemporary social taboos as mercilessly as his late work, and it took becoming the most popular sci-fi writer in the world for Heinlein to be able to get back to this kind of writing.

Both before and after my brief* Tolkien phase, my two favourite writers of all time were and remain Ursula Le Guin and Robert A. Heinlein.

(*) Ok, maybe not that brief. But it only took me a month to learn to write in Cirth!

I consider “Starship Troopers”, “Stranger in a Strange Land”, and “Moon is a Harsh Mistress” my formative books right alongside Le Guin’s Earthsea series. It was very gratifying to learn that Heinlein once said that only those who would name all three of these books as their favorites truly grok him. Turns out I really do.

Discovering a previously unread book by a favorite writer is a treat. Finding out that his very first book was as serious as his best work, even more so. But the greatest surprise is that the main theme of “For Us, The Living” is the once again hot topic of political discourse: universal basic income.

In retrospect, it is not at all surprising that some progressive politicians in the United States, future science fiction writer Heinlein among them, were exploring UBI in the wake of the Great Depression. Just as it is not surprising that it has come up again when America has barely begun to recover from one Great Recession and is now staring down the barrel of another.

It is, however, surprising and more than a little bit depressing how well thought out and carefully developed was the 1938 version of it proposed by Heinlein—a failed politician who couldn't even win a local election in California—compared to that proposed by one of the top five Democratic candidates for the presidential elections in 2020, Andrew Yang. I thought we were getting better at this.

I like the idea of universal basic income. While I would prefer to do away with the concept of currency and wage slavery altogether, I think that UBI, if implemented well, can be a significant—and urgently needed—intermediate step in that direction.

Sadly, the way Yang has proposed to do it is as bad as his positions on immigration and climate.** Instead of progress towards abolishing money and work, his version of UBI tangles American economy into a pattern that will be even harder to unravel than its current dynamics of income disparity.

In that sense, it is very similar to the infamous California Proposition 13: a state tax reform that since 1978 has limited real estate tax to that based on assessed value at the time of purchase, regardless of how the property appreciates over time.

On the surface, the idea was to protect the poor elderly from getting priced out of their own homes. But the real goal of that policy was to lock in the contemporary distribution of wealth in the state and protect the wealthy*** real estate owners at the expense of the poor renters, the young new home buyers, and most of all the diverse immigrants from other states and other countries.

(***) Wealthy and white: read “The Color of Law” by Richard Rothstein if you want to understand how that came to be in the first place.

And over the past 40 years, it did exactly that. As the gap between past and present home prices widened, people who already own homes were disincentivised from moving by the prospect of paying a dramatically higher real estate tax on a new home, while renters got locked out of this most essential mechanism of building generational wealth with the extra cost of home ownership driven by the difference between what their landlords are paying in real estate tax and what they would pay if they bought a home of their own.

And this is how all the public services in California that are financed out of real estate tax—roads, schools, and even fire departments—have become a starving hostage of wealthy home owners who would rather pay for private schools and complain about the traffic congesting their poorly maintained roads than allow their non-white neighbors from the other side of the highway get a chance to rise out of poverty.

Yang’s UBI plan is just like that: on the surface, it offers to solve the right kind of problem, but it doesn’t take a lot of digging to see how the specifics of the proposed solution set up incentives and indirect consequences to make everything worse rather than better.

Messing up the incentives is a very common mistake in economics, particularly for authoritarians who always look for ways to force people to do things before trying to understand and motivate them. This is how USSR’s “planned economy” has repeatedly failed to work and had to be restarted first by NEP, then by slave labor in Gulags, then by oil exports, until the second attempt at NEP better known as Perestroika has finally finished it off for good.

Submarine incentives are also a good way to disguise one political goal behind an appearance of something completely opposite. Which makes systemic analysis of incentives a very reliable way to see through political bullshit.

And both the incentives that Yang’s UBI proposal creates and the incentives it is motivated by are all wrong.

Perhaps the most telling are the reasons he claims people should want UBI: fear and guilt. Where Heinlein rejoices in the reduction of drudgery brought by progress, Yang presents technology as a threat: “Since 2000, technology has replaced the jobs of four million American manufacturing workers and decimated communities throughout the Midwest.”

Fear is a manipulative and authoritarian incentive, it makes people angry, hostile to others, and uncritical of their leaders. Great way to become a dictator. Not a great way to build a community.

Yang’s explanation of how UBI is better than other forms of social security is just as manipulative: “By giving everyone the Freedom Dividend, the stigma for accepting cash transfers from the government disappears.” What stigma, where did it come from?

As most stigmas do, this one comes from many dark places:

  • Conservative misconception that every person is able and expected to succeed on their own, without help from the society they live in. Even Heinlein, a notorious individualist, ridiculed this myth.
  • Protestant work ethic—an early XX century reinvention of a non-existent tradition that rationalized the brutal exploitation of the contemporary unregulated capitalism.
  • The economic origin of American racism in the distinction between the white indentured servants who were allowed to eventually earn their freedom and the black slaves who were “provided for” and turned into chattel. For a white man of that era to become idle and kept was to be degraded to the condition of a slave.

Contrast that guilt trip with how elegantly Heinlein explains that every individual is an integral part of society and is equally entitled to benefit from its shared wealth:

“The last factor is invention or technique. I mean not only new inventions now held by patent, but also all useful accumulation of knowledge from the Stone Age to date. Although wealth can be created without, or with very little of it, it is the greatest factor of all. (...) We owe more to the unknown genius who invented the wheel and axle than we do to all the workers now on Earth. Furthermore, inventors stand on the shoulders of all their predecessors. (...) They have left to each one of us the most valuable inheritance possible, other than the good earth and life itself. To each one of us, mind you, lazy and industrious alike. To refuse your brother who prefers not to work his share in production for moralistic reasons of your own devising is to claim for yourself that which you have not earned and have no right to.”

The same exploitative logic that makes you feel guily about not working demands that Yang’s dividend remains not just below living wage, at the equivalent of $6 per hour it is lower even than the federal minimum wage, forcing all of its recepients to choose between poverty and work, disproportionately so in big cities and rich states with higher cost of living. And just like that, “Freedom Dividend” becomes food stamps for Walmart employees: a government subsidy for corporations rather than freedom from work for the people.

Once again, Heinlein knew that the best way to help people bargain for better wages is to make it unnecessary for them to work: “[Heritage check] means a hundred and fifty dollars, more or less, every month. You could live comfortably on two-thirds of that, if you wanted to.” (...) “At any one time I don’t suppose you will find more than half the population working to make money.”

Heinlein also anticipated and proposed a solution for inflation: “He was aware that to do so without some control over prices would result in inflated prices and a new spread between production and consumption.” Yang just accepts price hikes and rigorously waves hands about competition and progress magically making things cheaper. Conveniently, the outcome of that indirect consequence is also redistribution of wealth from people to corporations.

Then there’s the question of who gets the dividend: “Every U.S. citizen over the age of 18” (...) “The Freedom Dividend would make citizenship all the more meaningful.” And more importantly, who doesn’t: children—because how many male politicians even remember about single mothers?—and immigrants—because making 14% of the country’s population work harder for less is just what labor market needs, not to mention all the white nationalists looking for more reasons to block immigrants from citizenship.

Perhaps worst of all, funding UBI by taking away social welfare immediately and completely defeats its whole purpose. “Universal” means unconditional and uniformly applied to everyone, not differently to those who have to choose to give up the welfare they depend on to survive and those who don’t need to make that choice.

If you shape it to disproportionately benefit those who don’t rely on social welfare, all you have done is made the already catastrophic income gap in US even worse. Bigger income gap increases the impact of economic recessions, poverty, homelessness, crime, illiteracy, reduces life expectancy, and creates preconditions for authoritarianism and fascism.

Now imagine what it’s going to look like trying to fix the gaps and imbalances in this system once it’s already in place, once people have grown to depend on that $12,000 a year being a part of their income and corporations decreased their wages and increased their prices.

You can’t take it away, that would put most of the country in poverty. You can’t fix the imbalances, because the majority advantaged by those imbalances will see it as taking money from their already insufficient pot to benefit others. Any focused spending on areas of acute need, from healthcare and education to homelessness and disaster relief, will be resisted even more than today, for the same reason. The incentives created by the system and the motivations used to legitimize it will have locked it into place, just as they did with California Proposition 13.

The final and most embarrassing problem is that Yang’s numbers don’t even add up. If you want to make “math” your campaign slogan, you’ve got to be really cynical to build your campaign on your supporters being so bad at it.

He had one thing going for him in his entire campaign, and even that has turned out to be a populist dog and pony show laced with racism.

(**) Here is what The Atlantic thinks of Yang’s position on climate:

“Yang has taken several nominally true sentences and strung them together into a dangerous argument... But the game is not lost. The planet could still follow a range of emission outcomes, including a not very bad one and a catastrophic worst-case scenario. The worst, fastest sea-level rise seems like it may kick in between two and three degrees Celsius—and extraordinary action could yet hold that off.”

“Yang said that climate change is an inexorable problem, that the U.S. can’t do much of anything about it, and that if the seas take your house—that is, if a problem outside your control deprives you of your most expensive asset—then the government shouldn’t do anything specifically to help you.”

Here is my opinion of his immigration statement, quoted in entirety from an old extensive comment:

Even if Yang were an immigrant himself (like, for example, Gavin McInnes), identity is not a shield. Having immigrant parents proves nothing. Steven Miller’s Jewish parents all but disowned him. Clarence Thomas is black. Peter Thiel and Milo Yiannopoulos are gay. When people with an underprivileged background don’t get solidarity, they REALLY don’t get solidarity.

I am an immigrant, and every single line of Yang's statement is not just offensive to me, it is infuriating. If he wrote all that himself, that would immediately and completely disqualify him as—at best—dangerously incompetent.

Starting from the title, “make them earn it.” Do you know how hard I had to work to get even a chance to win the H1-B lottery that has allowed me to merely enter the country as a temporary(!) worker? Do you have any idea how much harder I had to work for an employer I couldn’t change to become a permanent resident, so I could stop worrying that losing that job would mean facing deportation? All the while making mandatory payments for the social security benefits I wouldn’t be able to benefit from, and paying rent for the real estate so many people born here have inherited? Do you know how much longer it takes people from China and India to get a green card? How easy do you think it was for me and my family to leave everyone and everything they know behind, and learn new language, new culture, adjust to new schools, build even a beginning of a new social circle? And you still want to make me “earn it?!”

Do you know where the idea of “melting pot” comes from? You should, it is your heritage as an American. It comes from the height of post-Reconstruction racism and xenophobia, from the time of the Chinese Exclusion Act and the Jim Crow laws. It means that we are not allowed to bring our culture with us, that we are supposed to fully assimilate into the dominant white Anglo-Saxon protestant culture.

It means that, contrary to the promise of the Constitution, I would not be free from being molested on account of my religious sentiments, or lack thereof. It means that as long as my accent continues to give away my Eastern European origin, I would not be considered the same class of citizen as someone born here. (And I at least can pass for a real citizen as long as I keep my mouth shut, my less lucky friends can’t keep the color of their skin to themselves.) It means that even after I become a naturalized citizen, sharing ideas contrary to the dominant political discourse could still get me stripped of my citizenship and deported, as it was done in 1917 to Emma Goldman.

So when I hear someone remind me that, unlike my future descendants, I will never be able to meet this impossible standard of assimilation, and in the very same sentence they reiterate that the only reason they tolerate my presence in their country is my hard work, I understand very clearly that they are not interested in allowing me to become their peer, they want me to remain underprivileged, so that they can continue benefitting from me being forced to work harder than they do and to demand less compensation than they get and to accept less rights than they have.

Which is exactly what this country does to undocumented immigrants and their children. They have even less rights than I do, so they have to work even harder than I do for even less pay than I get, employed by the very people who label them “rapists” and “bad hombres” to prevent them from gaining equal rights and equal pay.

So it is not even surprising that this narrative concludes with the dog-whistles you really should have learned to recognize by now. “Issues on the southern border?” Give me a break, how many times have we talked about how most drugs enter the country through ports, and most undocumented immigrants overstayed their visas, and Trump’s vanity wall is a complete waste?

“Immigration system has broken down?” It has always been a manufactured crisis, all the way since 1882. Immigration to United States have been decreasing for years, and so has the number of undocumented immigrants in the country, who also have been generating less crime and terror than the naturally born citizens belonging to the dominant culture.

“Not supposed to be here.” Many of these people can trace at least a part their ancestry to people who inhabited this land before it was colonized by Europeans, or at least before it was annexed from Mexico by the United States. A son of immigrants really should know better than pass judgement over who is and who isn’t supposed to be here.

I’ve only been in this country six years, and I know all this. How can someone who was born in this country and who is trying to become its president not know any of it?

Yang is a one-trick pony who has hidden a broadly conservative, regressive, and racist agenda behind a toxic misrepresentation of a single progressive talking point.

I have opinions, and I am not afraid to use them.