Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


We Need both a Basic Income and Universal Basic Services

I think there is no conflict between a basic income and Universal Basic Services because we need both policies.

To explain, under Universal Basic Services (UBS) the government provides everybody with certain services for free. The government pays for those services by imposing a tax. Interestingly, we already have UBS in most countries; including the United States.

The government provides free transportation in the form of highways and roads any with a vehicle can use in the United States, for instance. The federal government pays for America’s highways with a gasoline tax.

Other examples of UBS include the National Health Service in the United Kingdom, public parks, public schools, police, fire departments, ambulance services, utilities, water systems, sewer systems, and public libraries. You could even call the military UBS because the protection it provides is free to all citizens.

Basic Income vs. Basic Services

A basic income; in contrast, is a flat cash payment a government makes to all citizens.

Ideally, government will pay the same basic income to everybody. For instance, Andrew Yang’s Freedom Dividend is a $1,000 cash payment for all American adults.

The advantage to a basic income is that it is efficient, cheap, simple, and fair. Government can deliver a basic income with little or no bureaucracy.

Universal Basic Services

Most universal basic services, in contrast, require large numbers of bureaucrats and massive bureaucracies. The National Health Service (NHS) employees 1.5 million people in the UK, for example, Fullfact estimates.

Politicians and unions find UBS attractive because it creates many jobs. Additionally, bureaucracies spend lots of money on equipment, supplies, and services.

Hence, businesses make money by supplying UBS bureaucracies. Importantly, those businesses make donations to politicians. Therefore, politicians make money from UBS.

I think this is why politicians are usually more receptive to UBS than the basic income. A government contractor is more apt to write a check to a politician than a working stiff who gets a basic income.

What’s Wrong with UBS?

There are many problems with UBS. For instance, UBS encourages corruption and bureaucracy.

An obvious problem with UBS is that ordinary people find themselves at the mercy of bureaucrats. Bureaucrats can serve as gatekeepers who can deny services to people.

Another problem is that UBS may not provide people with what they need. For instance, SNAP; or Food Stamps, America’s cash support for poor families does not pay for diapers.

How UBS fails

A worst case scenario with UBS, that often plays out in America, is a two-tiered society. To explain, the poor; and increasingly the working and middle classes, have to rely on inferior or ineffective UBS services while the upper class can afford better alternatives.

For example, the poor must rely on crowded hospital emergency rooms for healthcare, while the rich can pay for good medical care. The poor have to send their children to lousy public schools, while the rich can afford good private schools.

Examples of UBS inequality are easy to find. The middle class has to drive on crumbling highways; while rich people fly overhead in their private jets, for instance. Meanwhile, poor people sit at the bus stop while the upper-class rides by in its Ubers.  

A horrendous proposal that UBS advocates on the left often make is to ban the superior private services rather than improve inferior public services. Presidential candidate and U.S. Senator Bernie Sanders (I-Vermont) wants to ban private health insurance for example.

The idea behind this thinking is that inflicting misery on everybody will force politicians to offer better services. Anybody who has ever driven on American highways; or ridden on the New York subway, knows the misery-for-all strategy never works.

Why we Need UBS

Despite its shortfalls, we need universal basic services. There are many amenities and resources best provided by UBS.

Water and sewage disposal are excellent examples of services best provided by UBS. For instance, no private company could afford to provide clean water to each of New York City’s 8.399 million citizens. Nor could a private company afford to dispose of all of New York City’s sewage.

Only a government that can the taxes needed to finance utility construction and maintenance. In addition, only government has the power to force everybody to connect to sewage water system. Or to force every child to go to school. Plus, only government has the financial resources to pay for complex medical procedures for all citizens.

Additionally, only government can afford to build health care, transportation, and educational infrastructure capable of serving of millions of people. The question we need to ask is should government charge citizens to use those facilities.

How Much UBS Do we Need?

There is no answer because governments charge for access to some services and not for others.

In the United States, for instance, public elementary, middle, and high school are free to all citizens. However, citizens pay to attend public universities taxpayers finance.

In addition, American governments charge to ride public buses and light rail, but not to drive on public highways. Meanwhile, in Denver the government charges for admission to the City Zoo and museums, but not to enter city parks, or the public library.

Hence, I think a modern civilization requires UBS. For example, epidemics could break out if most citizens lack access to medical care. In addition, most people will receive not education without public schools.

Thus, the debate is not whether to have UBS but how much UBS we need. For instance, we need ask if governments need to provide internet or electricity to all citizens? Or what about Amazon Prime should government pay for it for everybody?

Notably, citizens need electricity and internet to participate in the modern economy. Therefore, providing free electricity and internet could be necessary for economic growth in the modern world.

Why we Need both Universal Services and a Basic Income

I think we need both UBS and a basic income to fight inequality in today’s world.

To advance, the poor will need access to free health care, education, internet, transportation, and other services. For instance, a poor person could need free internet to find a job and free transportation to travel to that job. The poor person could need internet access to open a bank account and receive a paycheck or basic income.

However, the poor will also need money. For example, the poor need money to buy food, diapers, clothing, and other necessities.

The Danger from Universal Basic Services

Without the market, government will need to build a new infrastructure to distribute those necessities to the poor. Constructing such an infrastructure will be dangerous, inefficient, and expensive.

The infrastructure is dangerous because the bureaucrats running it will have vast amounts of power over the poor. For instance, a bureaucrat could tell a poor woman, “if you want food for your kids to eat, have sex with me.”

The infrastructure, like most government functions, will be less efficient than private enterprise and more expensive. For instance, politicians will hire an office full of bureaucrats to decide what food and diapers the poor need to buy.

It will also duplicate an efficient and effective private infrastructure. Namely retail stores. Such an infrastructure will encourage corruption because the bureaucrats could base their determination of the poor’s needs on the amount of money corporate lobbyists pay to Congress.

Those who do not believe me need to look at military procurement. For instance, Congress funds new tanks even though the generals say the army has no need for new tanks.

Basic Income and UBS is the Answer

I think a better solution is to provide all citizens with cash so they can buy what they need from private retailers.

Giving the poor cash makes senses because the market is the best system we have for meeting ordinary people’s material needs. If we give the poor money to buy diapers and other necessities. Retailers will provide those necessities to get the money at a fraction of the cost of the bureaucracy.

Retailers have already built an efficient system of distributing food and other goods to most citizens. There is no reason for government to duplicate that system. Instead, government can leverage retail’s power to give all citizens a better lifestyle.

A poor woman could use her basic income to buy diapers for her children through Amazon, for instance. Instead of a bureaucracy the government could distribute that basic income through an electronic or digital payments system.

There is no conflict between basic income and universal basic services. Instead, both policies could benefit many people. Hence, we need both the basic income and universal basic services if we want a humane, just, and fair society.

Final Thought

One final thought, arguments against the basic income remind me of H. L. Mencken’s famous critique of puritanism.

“Puritanism: The haunting fear that someone, somewhere, may be happy.”

― H. L. Mencken, A Mencken Chrestomathy

Thus I write; “Basic income critiques: the haunting fear that the poor and people of color are thinking for themselves.”