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BASIC INCOME
MADNESS
BY STEVEN GREENHUT, CALIFORNIA POLICY CENTER
CThe Legislature passes the nation’s first statewide “universal basic income” plan targeted at foster youth, but this dubious idea is
lawmakers have grand designs for this idea — and are building off of local pilot projects that started in Stockton and spread to a few Bay Area cities.
UBI is a terrible idea, and it’s not entirely accurate to put the late Nobel economist on the side of such proposals.
In the 1960s, Friedman proposed the negative income tax, which is a variant of these kinds of “universal basic income” proposals. “Friedman acknowledged that some form of welfare was necessary in capitalist societies and that the state would likely play a role in its provision,” explained Guy Sorman in a 2011 article in City Journal.
“The trick was to imagine a very different, radically improved, and more efficient form of welfare,” Sorman added. “This direct cash grant would replace all other welfare programs for the poor, which, Friedman rightly observed, were generating a huge bureaucracy and extensive welfare dependency.” Ever the creative thinker, Friedman was looking to dislodge the current bureaucratic system with market-oriented alternatives.
Progressives have rediscovered these direct- payment ideas as Americans have softened up to the notion of direct payments after more than a year of COVID-19 shutdowns. Some free-marketers have reluctantly supported those payments simply because the government forcibly shut down people’s private businesses and jobs. Those direct payments were akin to compensation for a taking, but few of us argue that it’s an ideal situation.
These guaranteed-income ideas — whether offering direct, unrestricted cash payments to targeted AMM1/6 APARTMENT MANAGEMENT MAGAZINE - AUGUST 2021 63
likely expand out of control.
alifornia’s legislative analysts and Capitol staffers do a remarkably thorough job summarizing proposed bills in their publicly available reports, but it’s still unusual to see them cite the work of free-market economists. It’s obvious why. Almost every new measure emanating from our progressive Legislature would expand the size of government and limit the role of the private sector.
In its report on legislation to create a “universal basic income” (UBI), the Assembly Committee on Human Services quoted from Stanford University’s Basic Income Lab. Such proposals “were very much alive in the early second half of the 20th century — including through figures like Martin Luther King, Jr. and Milton Friedman” as a way to deal with wealth inequalities, it explained.
As has been reported widely, the Legislature has passed by overwhelming bipartisan majorities the first-in-the-nation statewide basic income plan that would give direct cash payments to a targeted group of Californians. In this case, the primary recipients are recently emancipated foster youth.
That’s a worthy group in need of help, and the bill is a limited pilot program. But there’s no doubt that