The philosophy of universal basic income (UBI) is floated and discussed in many countries now including the Philippines. The philosophy is lousy because even the lazy or irrelevant-thinking people will have guaranteed universal income.
I am reposting a good article by a friend, Nick Sallnow-Smith, Chairman of The Lion Rock Institute (LRI) in Hong Kong. This was published in the LRI Newsletter, June 2017.
--------------
See also: Lion Rock 18, Nick Smith as new Chairman of LRI, April 05, 2016
Lion Rock 19, Not enough capitalism in Hong Kong, May 12, 2016
Lion Rock 20, Hong Kong's labor welfarism and rising unemployment, July 08, 2016
I am reposting a good article by a friend, Nick Sallnow-Smith, Chairman of The Lion Rock Institute (LRI) in Hong Kong. This was published in the LRI Newsletter, June 2017.
Nick Sallnow-Smith
It is often suggested by those skeptical about the value
of free markets, that to contribute to the community you need to be active in
the world of charities, NGOs, or what is called “public service”. By
implication, to work in the business sector is an indication of selfishness and
greed. You are only out for yourself is the implied slur. This approach finds
the idea of Universal Basic Income (UBI) very attractive because it is claimed
it enables the detachment of the income you receive from the work you do. The
promoters of this idea seem to find it self evident that this a “good thing”
because people will be spared the drudgery of work and can instead follow their
dreams to be creative, or make other life choices unconstrained by the need to
earn income. Let’s examine if either of the elements of this argument make
sense: that working in business is selfish, and that detaching income from what
you do with your life is inherently desirable.
The growth in our standard of living since most human
beings were engaged in subsistence farming is largely due to the division of
labour; to specialisation in activities in which you are relatively more able
than others. For this specialisation to be facilitated, we need a means to
exchange our skills with the products and services produced by others. This
means is money (whether gold, fiat money, shells and any other accepted
exchange medium). Money does more than enable us to exchange with others, it
provides a measuring device by which we can assess the cost of products and
services against their relative value to us. But more than that, the market
enables us to assess the relative value to others of the skills we have.
When I choose whether to be an artist or a banker or a
tour guide, I know my own preferences for what I’d like to spend my time doing.
The income I am offered by potential customers of my art, banking skills or
tour guide work tells me the relative assessment by others of my prowess in
these areas. I may still choose to be an artist, and settle for a low income if
I love it enough, but market pricing tells me that the community would prefer
me to stick to being a tour guide and not bother with my rather poor oil
painting. By pricing my skills in a free market, my value to the community –
what I am worth – is laid bare.
By contrast, if I work in a charity, NGO, or the public
sector generally, there is no test of the value of what I do; certainly not one
that enables relative value to be assessed. I might be a rather poor
schoolmaster (actually in 1974 I was!) but since the students’ parents did not
pay my wages, had no way to dispense with my services, and had no input into
the process by which their children were taught, I had no information about
whether what I did was valued at the level of my income, nor whether I would be
contributing more to society as a barman.
Which is more selfish then? To offer your services in a
competitive labour market and see how the community truly values what you do;
or to take a position in those sectors which never submit you to a market test.
It is concerning to me that those who work in “public
service” frequently imply that theirs is a more noble calling than the down and
dirty private sector, where everyone is in it “only for the money”. In fact,
the opposite is the case. Only if you subject yourself to the market test can
you ever know whether the community of which you are a part, values what you
do.
Let me turn now to the UBI idea, which is currently such
a hot topic in policy debates about how to respond the feared loss of jobs
resulting from AI. If what you do is detached from the income you receive, you
sever completely any possibility of knowing whether what you do is of any value
to the community. Indeed the policy proponents are claiming this severance is a
benefit, that what we do should have no relationship to what others value in
us. We should all be supported by the state so that we can do whatever we like,
without regard to its value to society. This seems to me to be a policy of
institutionalising the disregard of our value to the community. In answer to
the question in my title, it does not matter what you are worth, say the
proponents of UBI, it need never be measured. Many who disapprove of free
market libertarianism claim it “atomises” the community, rendering us all
completely separate uncaring individuals, alone in the social universe. Yet the
opposite is the truth. Selling your skills in the market means you are taking
account of what others value in what you do, while UBI is the truly “atomising”
policy.
There is one last aspect of this which I believe to be of
even more importance; the “self-worth” that any of us feels every day as a
result of what we do. If others have valued what you do (apart from your own
satisfaction in a job well done), you feel good. This is deeply important for
the way communities are bound together. Not only have you found a way of
selling your skills that gives you an income but you have done so in a way that
is evidently valued by others. The baker whose cakes are wildly popular is not
only happy to be paid for his efforts, his can and does take pride in being
valued by his customers. If the future consists of millions of people detached
from the feeling that what they did that day was valued, I fear there will be a
serious deterioration in self worth and self reliance; the stuff of many
apocalyptic sci-fi movies.
Of course proponents of UBI will argue that it will meet
only “basic” requirements (let’s see how the demands for it to be increased are
resisted before we are confident about
that). But the drive to find the best use of your skills for the
community at large will still have been significantly eroded. You will be paid
to be useless, not useful. It is suggested by common sense as well as economic
theory that if you subsidise something you will get more of it. Communities
should be very careful before they embark on large scale subsidisation of
uselessness.
See also: Lion Rock 18, Nick Smith as new Chairman of LRI, April 05, 2016
Lion Rock 19, Not enough capitalism in Hong Kong, May 12, 2016
Lion Rock 20, Hong Kong's labor welfarism and rising unemployment, July 08, 2016
No comments:
Post a Comment