Some Opponents of UBI Necessarily Believe the Racial Wealth Gap Is Good

A universal basic income (UBI) is a program where everyone receives an equal cash benefit each month in addition to the income they receive from the market. So, for example, you could imagine a situation where the government directly deposited $1,000 each month into each person’s bank account. That would be a UBI.

Some argue that the UBI is bad because it would discourage work. The argument is that getting income without having to work for it would make people work less or, in some cases, not work at all. This non-work would then cause all sorts of problems for the individuals, their families, and the society more generally.

But there is another way to get income without having to work for it. It is called capital income and people receive it because they own wealth (real estate, bonds, and stocks). Owners of wealth receive rents from the real estate they own, interest from the bonds they own, and dividends from the stock they own. The amount of money received from these non-work income sources was $4.8 trillion in 2015.

If getting income without having to work for it is bad, and wealth allows you to get income without having to work for it, then that means wealth is also bad. Or, more precisely, it means that wealth has a negative consequence, which is that it delivers its owners non-work income, which then causes all sorts of problems for the individuals, their families, and the society more generally.

If wealth is bad in this particular way, then that means having less wealth is better than having more wealth. This is because having less wealth means you receive less non-work income and are therefore less vulnerable to the toxic effects of receiving non-work income.

The racial wealth gap refers to a situation in the United States where Blacks and Latinos have far less wealth than Whites. Normally this is seen as bad for Blacks and Latinos. But if the argument above is correct, then that means the racial wealth gap is actually good for Blacks and Latinos because it ensures that they receive far less non-work income.

To summarize:

  1. UBI is bad because getting income without having to work for it reduces work activity.

  2. Ownership of wealth allows you to get income without having to work for it.

  3. It follows from (1) and (2) that wealth ownership is bad and owning less wealth is better than owning more wealth.

  4. The racial wealth gap ensures that Blacks and Latinos own less wealth than Whites.

  5. It follows from (3) and (4) that the racial wealth gap is good for Blacks and Latinos.

To be clear, I do not believe the conclusion of this argument. But this is because I reject the premise that getting income without having to work for it is bad. My point is only to say that if you believe Premise One above, then you necessarily believe the racial wealth gap is good. If you do not believe the racial wealth gap is good, then you should not believe Premise One.

How many people will Obamacare and AHCA kill?

Five separate people were bylined on a Center for American Progress post about how many people AHCA will kill. The post is quite long, but all the authors really do is take the CBO estimates of how many people will lose coverage under AHCA and then divide that number by 830. They do this because there is a study that shows that 1 person dies unnecessarily for every 830 people who lack health insurance.

I have duplicated CAP’s efforts here, but rather than focus only on the AHCA, I have also included Obamacare and single payer into the mix. One other difference is that I track cumulative deaths between 2017 to 2026 rather than reporting an annual figure for each year.

Under AHCA, nearly 540,000 people will die in the next decade because of lack of health insurance coverage. For Obamacare, it is a more respectable 320,000 deaths.

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If fireproofing is a waste for the poor, it is also a waste for the rich

Megan McArdle has this piece about the London fire in which she argues that it could be that installing sprinklers and other fireproofing will actually kill more people than it saves:

If it costs more to build buildings, then rents will rise. People will be forced to live in smaller spaces, perhaps farther away. Some of them, in fact, may be forced to commute by automobile, and then die in a car accident. We don’t see those costs in the same way as we see a fire’s victims; we will never know the name of the guy who was killed in a car accident because he had to live far from work because rents rose because regulators required sprinkler systems. But that is a distinction for public opinion, not for good policy making. Good regulations would take into account the proximate and distant effects.

She is careful to say she has no idea if this is actually true in this scenario, but nonetheless feels like we need to consider this possibility.

So let us actually consider this possibility and tease out its full implications, not only as it pertains to the housing of the poor, but also as it pertains to the housing of the rich.

McArdle argues that fireproofing will increase unit building costs and the negative effect this has is that people have to live farther away and commute for longer periods of time. But if this is true, then it is true of fireproofing in general. The Kensington mansions that have substantial fireproofing also have the exact same detrimental effect on rents. And so if it can be determined that those effects are so negative that fireproofing is net harmful, then fireproofing should be banned. Allowing an owner of a Kensington mansion to fireproof their home is to allow the owner to literally kill other people.

Indeed, if you are worried about the higher rents caused by fireproofing, you should also be worried about the higher rents caused by high-end amenities in general. Ban granite countertops. Ban exposed brick. Ban everything else that about a housing unit that gets rich people excited enough to pay higher rents. You can live with a laminate countertop. Others literally will not live if you install a granite one.

McArdle then goes on to argue that, separate from the issue of rents, the resources that go into fireproofing could be dedicated towards other things. But once again, this argument is equally applicable to the fireproofing carried out by rich people. If it is a waste to use some of the country’s scarce work hours and scarce raw materials to put a sprinkler system into a public housing complex, then it is just as much of a waste to use those same hours and materials to put the system into a private housing complex. The wastefulness of a particular unit of production does not change just because the income of its consumer is higher.

As David Lammy noted: “If you want to build these buildings, then let them at least be as good as the luxury penthouses that are also being built.” The equivalence between the two with respect to fireproofing is key here. If you think the fireproofing is worth it, then it should be available across the board. If not, then it should be unavailable across the board. This is especially true if you believe, as McArdle does, that the installation of fireproofing has negative externalities because of its effects on rents. It is (arguably) one thing to hurt yourself by wastefully fireproofing; it is another to kill other people by doing so.

Despite the fact that her argument clearly points in the direction of a universal rule on fireproofing (whether yay or nay), that is unsurprisingly not where McArdle ultimately winds up.

People can make their own assessments of the risks, and the price they’re willing to pay to allay them, rather than substituting the judgment of some politician or bureaucrat who will not receive the benefit or pay the cost.

After just saying that unnecessary fireproofing will kill other human beings, McArdle bizarrely reaches the conclusion that individuals should be able to decide on their own whether to do it (i.e. whether to kill other human beings). Even though there is nothing in her argument that supports the idea that fireproofing might be a wise way to allocate resources for the dwellings of the rich but not a wise way to allocate them for the dwellings of the poor, the upshot of her ultimate policy preference is precisely that: the rich will generally be safe from fire, but the poor will not.