Above Photo: Fortune Live Media / Flickr
Max Sawicky has a piece in Jacobin that again repeats the clearly incorrect claim that it would be impossibly expensive to provide everyone in the country a significant cash grant each year.
So what’s wrong with the UBI? In a nutshell, if it’s universal, it can’t be basic, and if it’s basic (provides a decent income floor), it can’t be universal. The US population exceeds 300 million. If the UBI benefit is $10,000 a year (less than Yang’s), you can do the math. The entire federal budget is about $4.4 trillion.
So let us do the math here. Providing every person $10,000 a year would sum up to about $3.2 trillion. This would be passive income paid out to people with no strings attached and without them having to work for it.
Now ask yourself: do we have any other kind of income in our society that is paid out passively to people with no strings attached and without them having to work for it? Yes. We do. It is called “capital income” or, at other times, the “net operating surplus.” How much capital income is there in our current economy? $5 trillion.
So do the math on this. The UBI Sawicky describes requires $3.2 trillion while capital’s share is $5 trillion. It looks like the UBI already exists. It is just very unevenly distributed.
Liquidating the capitalist class will of course be difficult to pull off politically, but it is important that we distinguish between political difficulty and what is possible as a policy matter. There really is enough money flowing to the capitalist class each year to fund a UBI, or “social dividend” as socialists call it. And there really are proven vehicles for doing exactly this, such as in Alaska where a collective pool of capital assets is used to provide thousands of dollars each year to every resident.
American leftists interested in the idea would be wise to look at our peers in the UK Labour Party who have proposed shifting 10 percent of the country’s corporate equity to worker funds over the next 10 years, which will provide dividends to the workers and to the government. This is the kind of thing that could, if taken further, do what Sawicky says is impossible: provide a universal cash payment equal to around 20 percent of the net national income without requiring any kind of cutbacks in current government spending.