The UBI Already Exists. It Is Just Unevenly Distributed

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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.

  • ThisOldMan

    I think, more radically, that we need to ask ourselves if we can afford to compete with one another for “scarce” resources anymore. The UBI is the single most direct way there is to “level the playing field” and thereby eliminate the fear of being poor, which is the foundation upon which capitalism stands. This is good, but is it good enough to allow the almost unimaginable degree of cooperation among people and nations that we’re going to need to summon if we’re to stop the juggernaut of climate change before it stops us? I don’t think so. We’ve also got to eliminate the very idea that some people are more deserving than others, accepting in its stead that we’re all in this together. The UBI is but a step towards institutionalizing that mindset, albeit an important one.

  • rgaura

    I recently found Mark Blyth, the economist, on youtube. He has a clear analysis of how we got here, and some surprising and innovative ways to re structure our economy. I recommend his lectures. Pretty amusing as well.

  • chetdude

    I agree.

    Combining a UBI for essential hard goods, etc along with ending Big Ag and replacing it with relocalized, regenerative organic ag and aquaponic systems producing food where it’s consumed would go a long way toward dealing with inequality AND capitalogenic global warming/existentially threatening climate change.

  • chetdude

    I’ll echo your comment, Mark Blyth is excellent.

    Like the Steady State guys, he’s an excellent antidote to libertarian loonism, status-quoism and Friedmanism…

  • James Vanden Eynden

    I hope this dummy realizes that it would not go to 300m people, there’s approx. 240 m adults and not all of them would opt in or be able to opt in.. and yes there would be significant savings for the government.. maybe he should of studied economics and macroeconomics, instead of journalism.. 😀😀😀😀