An Alternative to Welfare

Dave Rubin, Michael Munger,

Release Date
August 21, 2017


Economics Poverty & Inequality

Today’s welfare system discourages aspiring for the American dream. What if we tried a universal basic income instead? Watch the full interview with Prof. Munger 

    1. Why Libertarians Should Oppose the Universal Basic Income (article): Prof. Bryan Caplan argues against Universal Basic Income in his opening statement in a debate hosted by the Institute for Humane Studies on the subject. 
    2. The welfare state is a (bad) polygamist (blog post): Prof. Michael Munger argues that our current welfare system creates a cycle of poverty for many women. 
    3. Milton Friedman – The Negative Income Tax (video): Milton Friedman explains the “negative income tax”.

Michael Munger: So, I think universal basic income is a better solution than the hodge podge of different intrusive programs that we have now. And let me explain briefly-
Dave Rubin: Yeah.
Michael Munger: … Why? So, what we have is a system, and I wrote a pretty incendiary paper about this. The state is just, is a bad polygamist. So, if you’re a single mother, and you have three children, if you do one of two things you’ll lose your support from the polygamist. If you get a job, or get married. If you actually do something that achieves some independence for yourself, your husband, the state, will, “No, we’re getting a divorce.”
Dave Rubin: Right.
Michael Munger: “I don’t care. I mean, you could have more children. You can have affairs, but you have to be committed to me. You can only get support from me.” Which means that you can’t do any of the things, that normally we would expect, and this is a conservative position, I suppose-
Dave Rubin: Right.
Michael Munger: … family and jobs are good things. Being married, and having a job is a good thing. We have what many people on the left have called the cliff effect of benefits. If I’m in Section 8 housing, and I get subsidies for food, I get subsidies for school, the first $10,000 that I earn costs me $12,000 in benefits. So, the poor aren’t lazy, they’re rational.
Dave Rubin: Right. So they’re really, it’s just a realistic game … Not, I don’t want to say game. They’re not playing a game. But it’s a … They’re making calculations that at-
Michael Munger: It’s a game in the technical sense.
Dave Rubin: Yeah.
Michael Munger: That’s the … They have choices. They have strategies, those have payoffs.
Dave Rubin: Yeah.
Michael Munger: It’s unsurprising they pick the ones that make them better off, because they’re desperate. They can’t afford to lose this money.
Dave Rubin: So, for example, if you’re living through subsidized housing in a decent area with a decent school, and even if you don’t want those handouts, well, then you realize, “Well, I’m going to have to work a third job now.” And then they’re going to force me to move to a much worse place to live.
Michael Munger: I can’t afford childcare. So, the state is a bad polygamist. Let’s stop doing that. So, to me, universal basic income, that’s given without strings. We take the money that we’re spending now, which is enough to give at least $12,000 per poor people. So, you take the amount that we spend, divide it by the number of poor people-
Dave Rubin: Where are we taking that from?
Michael Munger: Well, all of these different subsidy programs.
Dave Rubin: So, all of the subsidy programs, then go to-
Michael Munger: So, we … Including Social Security. So, we eliminate all those.
Dave Rubin: Yeah.
Michael Munger: Use that money to give everyone a universal basic income. And if they get a job, they don’t lose it. If they get married, they don’t lose it. They can use it for childcare. One of the problems that people have now, is it’s very specifically tied to a location. So, I can’t go somewhere where there’s a job because I won’t be able to establish myself. Universal basic income, if it’s federal, means that, if I’m living in Cleveland, Ohio, I can’t find a job, and there are jobs in Texas or North Carolina. When I get there, I get universal basic income. I can establish myself. I can pay for childcare. I can look for a job. And there actually are jobs in those places.
Dave Rubin: Do you find a conflict between your libertarian self and your economist self on this? Because, it seems like the idea … A libertarian going, “The state should give people money,” probably seems like there’s some fight there, right?
Michael Munger: Sure, if you’re a destinationist. If I’m a directionalist, I say, “Dude, we’re giving them the money now.”
Dave Rubin: Right, we’re already doing it.
Michael Munger: We’re already doing it. Let’s just give the money in a way that’s cheaper, and increases liberty. That’s the basic directionalist argument. Which is why Milton Freedman and Charles Murray are both in favor of universal basic income. But it has to be a directionalist argument. We’re already doing that.
Now, you’re saying, we shouldn’t do that. Great. Good for you. We are. And unless you have some plan to end that, and improve things, I’ll listen to that.
Dave Rubin: Right.
Michael Munger: That’s not what they say. They just say, “Well, the government shouldn’t be giving out any money.” It already is. Let’s do it in a more efficient way. And in a way that increases liberty, because I can then spend that money on what I actually want. We give these vouchers for food, which I don’t really want to buy that. I want to buy something else. I sell my food stamps for 50 cents on the dollar. If I get money, I already have 100 cents on the dollar.
Now, one objection that people on the left make is, “Well, those poor people, you know how they are? They’ll spend it on the wrong stuff.” So what one of the things-
Dave Rubin: Is that the argument the people on the left make? I think, that isn’t that usually from the right? Where they’ll say they’re going to spend it on booze.
Michael Munger: Of course some people … But a on, but a surprising number-
Dave Rubin: Really.
Michael Munger: … on the left believe that. Yes. It’s one of the things I like about this, is it sort of divides the usual political split by how paternalistic they are. There’s a whole bunch of people on the left that really think experts, and honestly, rich white people, should be saying, “Here’s how these poor people should be spending their time and money.”