Guaranteed Monthly Income: Boon or Bane?

"Tell us how you would spend $1,000 a month.  Then if you win, you'll get the [contest] money and you'll get a whole lot of social media followers." —Andrew Yang, announcing his competition-based dry run for a guaranteed minimum income

Andrew Yang's Bad Idea

Andrew Yang's socialist idea of a guaranteed minimum income, if enacted, could only prove to be a bane.  The idea may enjoy limited success among some entrepreneurial types, but when it comes to the entire American people, the great likelihood is that replacing $1,000 of income per month for all workers would sway many to reduce work.  Others may even experience a "failure to launch" their own entrepreneurism, encouraged by unearned payouts.  If a guaranteed minimum income were enacted as a welfare entitlement, the result would be that the wealth generation taxed by the government would see an overall drop, while welfare spending would rise.  Any tax increase to recover losses in revenue would only incentivize people to work even less.  This would mean fewer people working, since whatever is taxed decreases in frequency, including work.  With costs up, revenues down, and incentives to work less, a guaranteed monthly income entitlement would become unsustainable.

Would People Be Harmed?

Human economic activity grows from mankind's ecological imperative to address survival needs by seeking to reduce material scarcity and increase physical, emotional, and spiritual well-being.  But, as Thomas Sowell points out, "future wealth is less likely to be produced when people see that it is going to be confiscated."  How many potential Thomas Edisons and Alexander Graham Bells, being awarded unearned income, might refrain from working the hours necessary to invent new things?  Imagine a world where Edison and Bell themselves had worked less, while socialist programs bestowed "free" money on would-be inventors for not working.

Nothing is really "free"; everything has a cost.  The cost of socialist welfare programs can be seen in the increase of physical misery and premature death they bring about.  With less responsibility toward work, people exercise less responsibility toward their fellow human beings.  Without responsibility, freedom gives way to dependency.  When people work more, they bless their communities by their labors and create more freedom for themselves and for those relieved from the financial burden of having to support them.  When people work less, they benefit society less, often themselves becoming dependent on others.

The Wisdom of the Founders

The number of important inventions flowing out of America during the early 20th century is astonishing.  American economic freedom empowered life-saving innovation and wealth creation that helped its own citizenry as well as the world at large.  This was due to America's wisdom in choosing free markets and a work ethic that permitted people to create personal wealth independent of government control.  The economic conditions put in place by America's Founders had set the stage for America's generation of 40% of the world's Gross Domestic Product by 1960, a percentage reduced by the costs of post-1960 regulatory structures, welfare programs, and overtaxation.  But even so, today's American economy still manages 24.80% of global GDP generated by only 4.29% of the world's population.  Freedom works for people, but only if people are willing to labor to be free of dependency.

The Trump Turnaround

As regulation has increased, the size of America's GDP relative to the global economy has shrunk, and life-enhancing innovation has faltered.  However, President Donald Trump, offering lower tax burdens and fewer regulatory costs, has unleashed the spirit of free enterprise and restored much of the life-affirming American Dream that had been on the road to dying out prior to his presidency.  It is, after all, work that supports life, creates wealth, and facilitates freedom.  And it is competition for profits that spurs the abundant creation of life-saving innovations and services at affordable prices.

Innovation Helps the Environment

One of the benefits of an increase in economic activity is the people's ability to purchase newer, more environmentally friendly technology.  For example, new cars have a major impact on the decrease in carbon emissions that has been a hallmark of Trump's presidency.  (The EPA says emissions sank 2.7% during Trump's first year in office alone.)  Given a marketplace desirous of low emissions, the profit motive has incentivized car manufacturers, among others, to engineer tremendous technological improvements.  These life-enhancing innovations mean less pollution in general, courtesy of free enterprise.  Such environmentally sound outcomes could have been prevented, however, by giving "free" money to innovators, thus incentivizing them to work less.

The Tragedy of the Commons

Soviet Russia embraced socialism, thereby causing the environment to suffer tremendously.  Without private ownership of the land, the Tragedy of the Commons was in full swing.  The perspective of a landsman, when the land is not privately owned, is this: "I fell all the trees I can for firewood before my neighbor does.  I hunt all the deer before my neighbor does.  I catch all the fish from the lake before my neighbor does.  If I don't harvest these things first, my neighbor will, and I'll starve."  These statements provide an example of what happens when no incentive exists to manage land properly.  Privately owned land is cared for, so it maintains value.  The profit motive helps ensure that land will be well tended against the day it might be sold, providing an incentive against overcutting, overhunting, and overfishing.

A Free Market Helps the People and the Environment

Many American buffalo are now privately owned as livestock.  This has brought the buffalo back from the precipice of annihilation by creating a demand for buffalo meat in the marketplace.  It also bears mentioning that it was the free market that provided the profit motive for the production of fossil fuels, and petroleum production saved the whales from extinction because of the timely replacement of whale oil with kerosene oil.  In fact, petroleum has saved more than whales; petroleum products — like oil, natural gas, and coal — form the basis for everyday life in the modern world, providing the ingredients for the manufacture of many items, from aspirin to toothpaste, from surfboards to contact lenses, from guitar strings to home computers.  The original interest in making plastics from petroleum, according to Professor Plastics, "arose in the 1800s to replace scarce materials such as ivory and tortoise shell."

So, instead of a guaranteed minimum income, which would weaken the Puritan work ethic that has facilitated a boon to environmental conservation, perhaps it would be better — for people and wildlife alike — to incentivize, via the marketplace, the development of more environmentally friendly technological innovations, along with the freedoms and blessings that flow from work.

Paul Dowling has written about the Constitution, as well as articles for Godfather Politics and Eagle Rising.  His blog is Conservative Notions.

"Tell us how you would spend $1,000 a month.  Then if you win, you'll get the [contest] money and you'll get a whole lot of social media followers." —Andrew Yang, announcing his competition-based dry run for a guaranteed minimum income

Andrew Yang's Bad Idea

Andrew Yang's socialist idea of a guaranteed minimum income, if enacted, could only prove to be a bane.  The idea may enjoy limited success among some entrepreneurial types, but when it comes to the entire American people, the great likelihood is that replacing $1,000 of income per month for all workers would sway many to reduce work.  Others may even experience a "failure to launch" their own entrepreneurism, encouraged by unearned payouts.  If a guaranteed minimum income were enacted as a welfare entitlement, the result would be that the wealth generation taxed by the government would see an overall drop, while welfare spending would rise.  Any tax increase to recover losses in revenue would only incentivize people to work even less.  This would mean fewer people working, since whatever is taxed decreases in frequency, including work.  With costs up, revenues down, and incentives to work less, a guaranteed monthly income entitlement would become unsustainable.

Would People Be Harmed?

Human economic activity grows from mankind's ecological imperative to address survival needs by seeking to reduce material scarcity and increase physical, emotional, and spiritual well-being.  But, as Thomas Sowell points out, "future wealth is less likely to be produced when people see that it is going to be confiscated."  How many potential Thomas Edisons and Alexander Graham Bells, being awarded unearned income, might refrain from working the hours necessary to invent new things?  Imagine a world where Edison and Bell themselves had worked less, while socialist programs bestowed "free" money on would-be inventors for not working.

Nothing is really "free"; everything has a cost.  The cost of socialist welfare programs can be seen in the increase of physical misery and premature death they bring about.  With less responsibility toward work, people exercise less responsibility toward their fellow human beings.  Without responsibility, freedom gives way to dependency.  When people work more, they bless their communities by their labors and create more freedom for themselves and for those relieved from the financial burden of having to support them.  When people work less, they benefit society less, often themselves becoming dependent on others.

The Wisdom of the Founders

The number of important inventions flowing out of America during the early 20th century is astonishing.  American economic freedom empowered life-saving innovation and wealth creation that helped its own citizenry as well as the world at large.  This was due to America's wisdom in choosing free markets and a work ethic that permitted people to create personal wealth independent of government control.  The economic conditions put in place by America's Founders had set the stage for America's generation of 40% of the world's Gross Domestic Product by 1960, a percentage reduced by the costs of post-1960 regulatory structures, welfare programs, and overtaxation.  But even so, today's American economy still manages 24.80% of global GDP generated by only 4.29% of the world's population.  Freedom works for people, but only if people are willing to labor to be free of dependency.

The Trump Turnaround

As regulation has increased, the size of America's GDP relative to the global economy has shrunk, and life-enhancing innovation has faltered.  However, President Donald Trump, offering lower tax burdens and fewer regulatory costs, has unleashed the spirit of free enterprise and restored much of the life-affirming American Dream that had been on the road to dying out prior to his presidency.  It is, after all, work that supports life, creates wealth, and facilitates freedom.  And it is competition for profits that spurs the abundant creation of life-saving innovations and services at affordable prices.

Innovation Helps the Environment

One of the benefits of an increase in economic activity is the people's ability to purchase newer, more environmentally friendly technology.  For example, new cars have a major impact on the decrease in carbon emissions that has been a hallmark of Trump's presidency.  (The EPA says emissions sank 2.7% during Trump's first year in office alone.)  Given a marketplace desirous of low emissions, the profit motive has incentivized car manufacturers, among others, to engineer tremendous technological improvements.  These life-enhancing innovations mean less pollution in general, courtesy of free enterprise.  Such environmentally sound outcomes could have been prevented, however, by giving "free" money to innovators, thus incentivizing them to work less.

The Tragedy of the Commons

Soviet Russia embraced socialism, thereby causing the environment to suffer tremendously.  Without private ownership of the land, the Tragedy of the Commons was in full swing.  The perspective of a landsman, when the land is not privately owned, is this: "I fell all the trees I can for firewood before my neighbor does.  I hunt all the deer before my neighbor does.  I catch all the fish from the lake before my neighbor does.  If I don't harvest these things first, my neighbor will, and I'll starve."  These statements provide an example of what happens when no incentive exists to manage land properly.  Privately owned land is cared for, so it maintains value.  The profit motive helps ensure that land will be well tended against the day it might be sold, providing an incentive against overcutting, overhunting, and overfishing.

A Free Market Helps the People and the Environment

Many American buffalo are now privately owned as livestock.  This has brought the buffalo back from the precipice of annihilation by creating a demand for buffalo meat in the marketplace.  It also bears mentioning that it was the free market that provided the profit motive for the production of fossil fuels, and petroleum production saved the whales from extinction because of the timely replacement of whale oil with kerosene oil.  In fact, petroleum has saved more than whales; petroleum products — like oil, natural gas, and coal — form the basis for everyday life in the modern world, providing the ingredients for the manufacture of many items, from aspirin to toothpaste, from surfboards to contact lenses, from guitar strings to home computers.  The original interest in making plastics from petroleum, according to Professor Plastics, "arose in the 1800s to replace scarce materials such as ivory and tortoise shell."

So, instead of a guaranteed minimum income, which would weaken the Puritan work ethic that has facilitated a boon to environmental conservation, perhaps it would be better — for people and wildlife alike — to incentivize, via the marketplace, the development of more environmentally friendly technological innovations, along with the freedoms and blessings that flow from work.

Paul Dowling has written about the Constitution, as well as articles for Godfather Politics and Eagle Rising.  His blog is Conservative Notions.