Money for Nothing and Dignity for Free

Noel’s book review: Give People Money by Annie Lowrey

Opinion:

Give People Money by Annie Lowrey advocates for a controversial but straightforward premise: make sure that everyone has a minimum amount of money to ensure human dignity, independence, and security for all. In plain and comprehensible language, the author cuts up the idea of Universal Basic Income (UBI) into small pieces. Furthermore, the book comes at an excellent time. At the same time, UBI is not a new policy; it is making a resurgence as "free" capitalism is leaving out the lower income levels of society. Lowery builds a comprehensive case supporting the implementation of UBI with numerous real-life examples and tackling the issue from every imaginable perspective.

Thus the book is a must-read for anyone interested in post-capitalistic societies and should be considered fundamental reading when discussing UBI policy. However, I believe that Lowrey underestimates the practicalities of such a system. While she dispels any myths related to UBI, such as people becoming lazy and wasting money, she fails to suggest an implementation plan. Admittedly that might not have been her aim with this book. Nevertheless, leaving the readers with a sense of incompletion upon finishing the book. Maybe that's a good thing as it pushes reads to drive the discussion around UBI. 

Key messages:

·        UBI is more than a potential solution for mass unemployment due to automation.

·       There is no evidence to suggest that giving people money causes a lack of work ethic or an increase in wasteful/poor financial decisions.

·       UBI is utterly insignificant to the rich but life-saving for the poor

·       UBI provides economic choice, security, dignity, and inclusion to all members of society.

·       UBI simplifies social welfare, is economically feasible, but there is a lack of political will. 

Chapter Summaries:

1.      The Ghost Trucks

Technology will decrease the demand for human capital, but that is not the only justification for UBI.

Lowery opens with the Detroit Auto Show, where Volkswagen is debuting their autonomous concept vehicle. The vehicle used as a sign of unemployment driven by automation is slowly making humans obsolete in the job market. Universal Basic Income (UBI) is touted as a policy that could ensure livelihoods as technology transforms society. The author recalls different points in human history where UBI made it into the mainstream; all seem to be tied to technological advancements, such as the industrial revolution. Although innovation has resulted in a net gain in jobs, Lowrey believes that discussing the UBI as a solution for a world with less demand for human labor is wise. However, the author stresses that society does not need to wait until mass unemployment to decouple work from livelihood through UBI.  

2.      Crummy Jobs

Low-wage jobs have gotten worse over time, and UBI could be an alternative.

This chapter addresses a phenomenon that has become all too common in the U.S.: an entire household working every waking minute and still struggling to pay the bills. In 2016 in the U.S., 9.5 million people are living below the poverty line, even though they have worked at least 27 weeks that year. The stagnant wage growth has resulted in the fact that work doesn't pay enough to get by. Furthermore, the author points out that technological advancements have made low-skill and low-wage jobs duller and more menial. For example, cooking has been reduced to a series of pushing buttons and waiting for timers. Lowrey continues by outlining the drivers, such as special interest lobbying and globalization. The consequences of crummy jobs are growing inequality and reduced mobility in the lower class. At this point, UBI enters as it could provide an alternative for low-income families. Furthermore, it would reduce the burden on social costs related to poverty.

3.      A Sense of Purpose

UBI clashes with our industriousness identity; however, in real terms, it enhances our lives.

Lowrey addresses another fundamental aspect of the work and UBI relationship: an individual’s sense of purpose. Undoubtedly, having a job is ingrained in the American dream and thus, being unemployed hits hard economically, socially, and psychologically. By extension, UBI is painted as unamerican as it encourages or enables people to stop working. While it is true that UBI does would allow individuals to stop working, very few actually do stop working. The author cites numerous studies where individuals either start working harder as they could expand their businesses or continued to work but fewer hours, citing social reasons such as raising a child or education. Lowrey suggests that UBI secures the bottom of Maslow's "hierarchy of needs" and encourages people to do work they want to do instead of work they dislike to pay the bills. Readers will understand that UBI has an undeserved negative perception in the political realm.

4.      The Poverty Hack

Giving the poorest communities cash helps, and they won't waste it.

This chapter is all about putting UBI into practice to combat extreme poverty. Lowrey's prime illustration is a project set up by the US NGO GiveDirectly in rural Kenya. GiveDirectly, as the name suggests, directly provides cash to the most impoverished communities, testing the hypothesis that cash is better support than donating resources. This sounds like a crazy suggestion as a commonly held belief that recipients would become lazy or engage in unproductive behavior such as drugs, gambling, and booze. Nevertheless, GiveDirectly does not see this behavior at all; instead, the project resulted in many positive outcomes: improved school attendance, increased savings, less child labor, drop-in malnutrition, and more.

Furthermore, Lowrey points to 19 other World Bank UBI studies showing very similar results. However, that doesn't mean that these projects are without consequences. For the program to run successfully, GiveDirectly had to do many education and follow-up activities to ensure that the citizens receiving the cash were aware of what they were receiving and how to access it. Like in any community, there exists individuals that take advantage of others or make mistakes. UBI does not solve those social issues. It seems that cash provision charities are more effective than resource-based charities, forcing the author to conclude something that many readers already know: Toms shoes and soccer balls do not significantly help destitute communities. 

5.      The Kludgeocracy

Subsidy programs often miss their mark, and UBI could simplify the process.

Subsidy programs were politically easier to implement than cash transfer programs such as UBI, and Lowrey wonders why. Using India's rice, salt, wheat, and sugar provision subsidy program, she demonstrates that although well-intentioned and favorable public perception, these programs struggle to reach the target recipients as fraud and corruption run rampant, and it isn't easy to maintain. UBI does not have these negative consequences, and hence India is considering replacing its distribution subsidy program. Conversely, the author does acknowledge that subsidy programs do have benefits and that a hybrid program that combines subsidies and cash transfers is a comprehensive approach to eradicating poverty.  

6.      The Ragged Edge

UBI does not apply labels such as deserving and undeserving poor

In this chapter, Lowrey turns back to the United States, where she interviews a mother who has slipped into absolute poverty despite her best efforts. Lowrey indicates that this mother is one of the many Americans that fall through the large holes in the U.S. safety net. The U.S. social security has a long and complicated history. Furthermore, it becomes highly evident that the holes in the safety net are by design based on political narratives and their willingness to help the "deserving poor" and not the "undeserving poor." Lowrey points out that this distinction is counterproductive. Child poverty alone costs the U.S. about four percent of GDP a year due to reducing productivity, increasing crime, and public health expenses. The author ends with a call from the Roosevelt administration: to ensure all citizens income, employment, housing, medical care, education, and freedom of unfair competition and monopolies. Interesting to see how much the political discourse has developed over the last decades.

7.      The Same Bad Treatment

There is a stigma and distaste surrounding government welfare which UBI could remove.

Lowrey points to a salient factor in the U.S. wealth gap, which is race. The chapter is filled with research supporting the argument that the diversity of the U.S. has caused barriers resulting in racist economic policy and perpetuating a lack of apathy to pay reparation. Even though there might be a strong case of reparations, that does not hit the heart of the issue: people are suffering in poverty. The author follows a single mother in Washington D.C. as she describes how she experienced the welfare programs through the years to a congressional commission. Overwhelmingly the current welfare system is degrading and intimidating while it is supposed to be there to help.

Interestingly, this mother describes that she felt respected and understood in the early days of welfare because the stigma and culture had not been popularized yet. Lowery believes that implementing a UBI would not be viewed as welfare since everyone would be receiving the same, and the stigma would break down. More importantly, it would make welfare programs obsolete as even the poorest citizen would be able to pay for essential services such as health care and housing. Although this is a critical discussion, the author recognizes that UBI is not a cure-all but would like to put it into perspective for the readers.

8.      The $10 Trillion Gift

UBI finally compensating those that stay home so others can work 

Arguably one of the strongest arguments for implementing a UBI is compensating people for their unpaid labor. Primarily women are staying home to provide care work with no money to show for it while it is undeniable that their work is fundamental for the global economy to work. This point is brilliantly demonstrated by Iceland's Women strike in 1975, where the country ground to a halt as women had decided to stop providing the care and service that the society had come to expect for free. It is estimated that replacing stay-at-home individuals with professional caretakers would be equivalent to between 16%-43% of GDP, depending on the country. Lowery argues that implementing UBI would finally compensate women for that service and give women economic freedom. It would remove dependency on men and provide a monetary value to everyone's contribution to society. Furthermore, with gender roles slowly changing in western culture, this would compensate the growing number of men who work within the home, giving the author hope that UBI might be implemented for its impact on the patriarchy.

9.      In It together

Big picture UBI restores independence and security, but there are caveats.

This chapter brings together the benefits mentioned above into the bigger picture. Lowery clearly outlines how implementing a UBI would dramatically help the poor provide security, empower women, and give everyone the freedom to live their life while conveying a sense of community. However, this doesn't mean that there aren't any challenges. Lowery primarily points at immigration in its current form would not be suitable for a UBI society and further drive the wedge between citizens and immigrants. There are ways to make the UBI inclusive to immigrants, but it is politically impossible in this current climate. Nevertheless, the author builds a case that political polarization would decrease with UBI since the poor could not participate in the economy before and are no longer seen as a burden. Furthermore, they would have security that would make discourse less about surviving and more about thriving.

10.  $1,000 a month

 How to implement a UBI is up to us. We need to build the political will.

Lowery ends by discussing the practicalities, and there are many. The readers discover that the idea of UBI is highly malleable. It can be a direct cash transfer paid for by income taxes or a tax credit that an individual receives. The point is that the author makes is that a UBI is feasible to implement; however, it requires dedicated political will and thoughtful design. Ideally, Lowery describes a system that would benefit the poor without hurting the middle class. Similar to the more social capitalistic model that European countries are using. So readers also are not surprised that countries like Finland, Scotland, and the Netherlands are running small-scale pilots to test possible UBI schemes. Finally, Lowery leaves the readers with an important note that UBI is more than economic policy. It is a movement that challenges you to imagine a world you would like to live in and not make any conventional assumptions about the world. Essentially, asking the readers to reactivate the agency that they have to redesign our society.