On utilitarianism and moral hazards
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siderea points to Scott Alexander's argument for Universal Basic Income over Universal Basic Jobs. Go read that.As Alexander points out, UBI allows people who would rather stay home taking care of their kids or aging parents to stay home taking care of their kids or aging parents, and allows people who for whatever reason (physical, mental, emotional, educational) really aren't suited to the job market to not be in the job market, thus opening up jobs for people who are well suited to the job market. It allows people who have a neat entrepreneurial idea the security to try it out even if they weren't born to rich parents and don't have the gift of gab to attract investors. It allows people with the talent to be poets or philosophers or painters to be poets or philosophers or painters rather than going unhappily into whatever job will pay the rent. It allows people who are abused by their bosses the security to quit and seek another job, knowing that they won't starve to death in the mean-time, thus putting employers in actual competition for employees. It allows people who want jobs the security to move to where the jobs are, and (by putting a little bit of money into a lot of people's pockets, even in rural areas) may create jobs in places where there currently aren't any.
Some of the points in the previous paragraph might be viewed as bugs rather than features, depending on where you sit. There's a theory that (country-club) Republican economic policy for the last hundred years can be explained by one goal: cheap labor. The ideal economy, from this perspective, is one with lots of workers competing for few jobs and bidding down the price of labor. Minimum wage laws are bad because they limit how far down the price of labor can be bid. Anything that makes workers less desperate for work, or in any way strengthens their bargaining positions, is bad. If there are fewer undocumented immigrants in the U.S, that's bad because they were willing to work for low wages. On the other hand, if undocumented immigrants can live and work in the U.S. without fear of deportation, that's bad too because they might complain about their wages or working conditions. If UBI or universal health care draws potential workers (even bad ones you wouldn't actually hire) out of the job pool, that's bad; if UBI or universal health care gives workers the security to walk away from a bad job and look for a better one, that's bad too. The moment an employee anywhere feels secure and empowered, Bolshevism is around the corner.
But enough of that rant. I'm starting to be fairly convinced that UBI makes sense, at least more sense than universal-guaranteed-employment.
Mind you, there are good arguments for government-hiring-to-create-jobs, as long as it's doing something useful (like FDR's Civilian Conservation Corps) that wouldn't otherwise have been done by the private sector. Hiring people for pointless jobs doesn't really serve the goal of "giving them dignity through work," and it doesn't make the world any better than just writing them a check. Hiring people to do things the private sector is already doing (as Alexander points out) hurts private-sector businesses without much benefit to the workers, and is really difficult to back out of if you decide it didn't work. And trying to hire everybody ensures that many of them will fall into either the pointless-jobs or the competing-with-the-private-sector categories.
But perhaps the strongest argument for guaranteed employment over guaranteed income is not about how well it would work, but how it could be enacted.
There's a thing in economics called moral hazard. In its narrowest sense, the term refers to situations in which being insured or protected against a particular danger causes people to discount that danger and take more risks, e.g. sub-prime mortgage lenders who knew they were going to sell off their loans so they didn't care whether those loans were repayable in the long run, or orange-haired real estate tycoons who repeatedly walked away from failing investments with a profit while their investors ate the losses. Somewhat more broadly, it describes any situation in which the party making a decision is shielded from some of the negative consequences of that decision, and therefore makes decisions as though the negative consequences were much smaller than they actually are, e.g. a factory owner who saves money by not installing pollution controls, externalizing most of the costs of the pollution onto the general public. More broadly still, it is sometimes used to describe any situation in which somebody gets something without paying for it.
Suppose your city has sold bonds to build an expensive bridge. Where will the city get the money to repay the bonds? One obvious way is to charge a toll on the bridge. This has the appealing property that the only people paying for the bridge are the people using the bridge. Of course, it requires building toll booths, which adds to the cost of the bridge, and it requires paying people to collect the tolls, which adds an endless ongoing cost. And all the cars stopping to pay their tolls are delayed by a few seconds or minutes apiece, which when multiplied by thousands of days and thousands of cars turns into a substantial time cost. (E-Z Pass reduces these costs quantitatively, but doesn't change the phenomenon qualitatively.) And there's the enforcement cost of going after people who drive through the toll plaza without paying: if you don't punish them, more and more people will do it, and the tolls won't serve their intended purpose, but the police and court time cost money too. In short, the act of charging for use of the resource itself carries a cost. A responsible city planner must at least consider the possibility that the city might be holistically better off not charging tolls on the bridge. Sure, people may over-utilize it, but you won't be paying all this overhead.
Consider disposable (paper or plastic?) grocery bags. Traditionally, grocery stores have given you bags "for free", folding their minuscule cost into the cost of whatever else you were buying at the grocery store. Of course, the grocery store was only paying the cost of producing the bags, not the cost of disposing of them, so this system predictably leads to over-utilization of disposable bags. Some cities and states have decided to fight this externalized cost by requiring grocery stores to explicitly charge by the bag. The cost is usually a few cents per bag, which isn't enough to directly affect people's behavior much, but just the fact that it's nonzero and appears on the receipt is supposed to (and probably does) encourage people to reduce the number of bags they need or re-use bags from one shopping trip to the next, thus reducing pollution and the use of either wood fibers or petrochemicals. However, the other side might legitimately point out that the act of charging for bags imposes costs of its own: the checkout clerk has to count how many bags were used in order to charge for them, which takes a few seconds per customer, and the customer who doesn't bring in a reusable bag but also refuses to pay for bags may walk out with more objects than hands and drop some of them. In this case, the added costs of enforcement are pretty minimal, being attached to a money-and-time transaction that was already happening, so it probably makes sense to do it.
Consider immigration. Residency in the U.S. is in many ways a valuable resource, and giving it out for free to anybody who wants it could plausibly lead to over-utilization. So we restrict it to people who "deserve" it, either by being born here or by demonstrating some specific quality that the government deems desirable (a rare skill, advanced education, a large bank account, light-colored skin). But in the course of deciding who "deserves" to be in the U.S, we incur enormous costs: walls and surveillance cameras and border patrols and workplace raids and pre-employment checks and incarceration and deportation proceedings and torn-apart families and torn-apart communities. And those who don't "deserve" to be here but are anyway pay other costs: if they get a job, they can't complain about sub-minimum wages or unsafe working conditions or sexual harassment on the job for fear the employer will turn them in to ICE. One has to wonder whether the country would be better off, on balance, making the U.S. borders more open and saving 90% of those enforcement costs.
There's a deep-seated sense in American culture that people shouldn't get something for nothing: it's unjust and immoral. (More precisely, other people shouldn't get something for nothing. Even more precisely, other people whom I look down on, based on race or education or socioeconomic level or whatever, shouldn't get something for nothing.) This moral sense may ultimately be based on the counterproductive, greedy behavior that we often see when people are insulated from the costs of their decisions, but the moral indignation has become largely disconnected from that original utilitarian argument. Even in cases with no evidence of significant bad behavior, or in which the likely cost of charging for the resource in question far exceeds the likely cost of that behavior, there will be serious political resistance to giving anybody anything that they haven't paid or worked for. It sends the wrong message, it encourages a cycle of dependency, it juvenilizes people rather than encouraging them to stand on their own two feet, etc.
This is the ostensible problem with universal health care: it gives people something for nothing, just by virtue of being human beings in our country, and that's Wrong. To be fair, there really is reason to fear that health care without a marginal cost will be over-utilized, and over-utilization of health care really is one of our problems. On the other hand, we know for certain that the infrastructure of charging for health care imposes huge costs in bureaucracy, advertising, cost-shifting, emergency treatment for preventable problems, rent-seeking, monopolistic business practices, and so on; it's not obvious which is worse, except that most countries with universal health care get better health outcomes for much less money per capita than the U.S. does.
And this is the ostensible problem with universal basic income: it gives people something for nothing, and that's Wrong. Even a conservative who somehow manages to choke down universal health care on efficiency grounds will balk at the idea of writing people a check every month, regardless of whether they've done anything productive whatsoever. Surely they have to at least show up to a job, or show up to school, or pick up trash in the park, or dig ditches, or demonstrate that they really are disabled from those activities, and they should certainly demonstrate that they're not already rich; otherwise there's nothing to stop them from lolling back in their hammocks and living off the labor of the rest of us. On the other hand, enforcing any of those rules imposes a substantial cost on the system and on every individual participant; if we're being utilitarian rather than moralistic, we have to consider whether enforcing those rules costs more than the freeloading we'll get if we don't enforce them. Any enforcement mechanism will have both false negatives and false positives: just how bad is it to have a few people who could work lolling back in their hammocks, while others who really can't work starve? Maybe it really would be more efficient to write every human in the country (rich or poor, old or young, employed or un-, law-abiding or otherwise) a check every month than to build an enormous government bureaucracy to figure out who "deserves" it.
How you approach that question depends largely on where you fall on the utilitarian/moralistic spectrum.
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moralism, n. the practice of moralizing, especially showing a tendency to make judgments about others' morality.
moralize, v.
1: comment on issues of right and wrong, typically with an unfounded air of superiority.
2: interpret or explain as giving lessons on good and bad character and conduct.
3: reform the character and conduct of.
[from Google dictionary]