America’s airwaves, blogs, and podcasts are awash with praise for, and criticism of, so-called “UBI pilots.” The problem is that none of the pilot programs, which multiplied like bunnies after the Covid scare began to subside a year ago, can rightly purport to inform the debate over the likely costs and benefits of the universal basic income policy (UBI) currently pushed by proponents in the US and around the globe. Journalistic misrepresentation, whether due to economic illiteracy or incentives to promote Woke causes, threaten to pollute the policy debate over real UBI proposals.
Journalistic misrepresentation of economic policies is not entirely new but has become more prevalent in the 21st century due to declining educational standards and perverse incentives. For example, Wilma Soss (1900-1986) in Columbia University’s journalism school in the early 1920s received a solid grounding in economic and political history and theory that allowed her to forecast changes in the macroeconomy and to provide solid investment advice to millions for a quarter century (1957-1980). Her educational preparation stands in strong contrast to the weak, ideological fare spoon fed to most journalist students in the early Third Millennium AD, especially in economic matters.
Soss faced a better set of incentives, too. Her employer, NBC, did not force her to accept corporate sponsorships, which allowed her to build audience loyalty through trust. Listeners did not always agree with what Soss said on her weekly “Pocketbook News” show, but they knew that she only said what she believed. Today, by contrast, most corporate journalists have incentives to write frothy clickbait or regurgitate partisan talking points.
Soss knew, and experts today agree, that most income transfer programs are not UBI because they are not universal in the sense of being paid to everyone. San Francisco, for example, rightly calls its $1,200 monthly stipend Guaranteed Income for Transgender People, or G.I.F.T. for short, because it’s just a welfare program for low income transgenders.
Conflating UBI with welfare causes two confusions that muddle policy discussions. On the one hand, the conflation increases opposition to actual UBI proposals on false grounds. A truly universal transfer program not limited by need (or subject to gender or other tests), for example, would not necessarily entail the creation and funding of yet another huge government bureaucracy.
On the other hand, UBI “pilots,” even the few that are not means tested, provide false support for a national UBI because they are miniscule in scale, of limited duration, and funded by manna from heavenly donors. Analyses of their outcomes invariably focus on that which is seen, which is people who are better off because they have higher incomes. But that misses that a permanent largescale UBI would have to be involuntarily funded by someone.
Pilots cannot tell us how net UBI payers, those whose taxes increase more than their respective monthly stipends, would react to UBI politically or economically. They are also too short to tell us what will happen to education, employment, or birth rates. Pilot participants tend to stay employed and in school because they know the extra cash flow will soon cease but they might drop out if they believed the money was permanent.
Some pilot principal investigators have analyzed results as rigorously as the current state of social scientific inquiry allows. Others, though, clearly seek to score ideological points by claiming that recipients spend every extra dime on education and clean water. Opponents claim that the extra money just fuels alcohol, drug, and gambling addictions. In fact, money is fungible so the focus should be on how consumption patterns change as incomes increase, but economists do not need transfer pilots to study that.
Ultimately, one’s stance on UBI should not come down to the purported results of pilots, most of which come nowhere close to testing the policy that UBI proponents push. Instead, it should come down to one’s values. Should public policies support individual liberty or government collectivism? If the former, urge the government to bolster voluntary transfer programs. If the latter, why not skip UBI and go right to socialism, the results of which are well documented from long experience at scale?
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