06.02.2017 0

Mark Zuckerberg’s ‘universal basic income’ would herald the end of capitalism

By Robert Romano

Since 1997 labor participation among working age adults —16 to 64 — peaked and has been steadily dropping, accounting for roughly 9 million Americans who did not enter the labor force but would have had participation remained at the same rate, according to data compiled by the Bureau of Labor Statistics.

Overall, the number of 16 to 64 year olds not in the labor force increased 16.5 million in that time, to 55.2 million.

During that same period, the U.S. economy has dramatically slowed down. It has not grown above 4 percent since 2000, and not above 3 percent since 2005.

The issue is not a matter of virtue. Americans did not suddenly become lazy. Most of the decline occurred after the financial crisis in 2008 and 2009, which eliminated millions of jobs. What followed was the worst recovery in American history, with fewer jobs now available per capita.

But it could get worse, as some observers see this as a long-term trend.

Factors such as increased automation plus globalization and outsourcing loom large as leading the decline, and raise the prospect that as economies reach their advanced stages, individuals in the U.S., Japan and Europe will simply be working a lot less in the future.

If so, then how will Americans increasingly make a living? For most Americans not born into luxury, almost everything families take for granted — housing, food, clothing, transportation, etc. — all depend primarily on a steady, stable source of income.

So, what to do, if not work?

Facebook founder and CEO Mark Zuckerberg had an answer for Harvard graduates at the 2017 commencement address on May 25: “We should explore ideas like universal basic income to make sure that everyone has a cushion to try new ideas.”

The idea is that the federal government would just cut checks, say, starting at $10,000 as proposed by the American Enterprise Institute’s Charles Murray, for every single American. To be fair, Murray calls for such a system to replace the current system of government programs including those for the elderly like Social Security and Medicare.

Zuckerberg, however, made no such distinction. The implication, then, with his broad, vague call for “universal basic income” is as a sort of add-on for the already existing structure of hundreds of billions of dollars of taxpayer-subsidized supplemental income and retirement programs.

Say, the $10,000 figure was applied to 254 million Americans over the age of 16. That would cost an extra $2.5 trillion a year. Think that might put a little strain on all the other government programs, particularly those directed at seniors? The national debt, already $20 trillion, would double in about 6 years.

Which, if the economy does not get moving — the last 10 years were the slowest average annual growth recorded in U.S. history, even worse than the Great Depression — may ultimately be the future that awaits the American people, whether they like it or not.

A future, that is, where jobs become rare and the calls for guaranteed income grow, for once an entitlement is granted, after a century of experience, it will never be rescinded.

Never mind the fact that the idea simply defies human nature for individuals to take care of their own families.

Or that the American people, including millions of Millennials who Zuckerberg pretends to represent, just voted, not for welfare, but for jobs in 2016 under the platform of President Donald Trump, who promised to bring work by to the U.S.

Or that no level of automation could truly replace the need for individuals to work.

Or to the extent that as universal income gradually replaces a significant percent work, to the extent that individuals wind up making less than if they had been working, it would reduce consumer expenditures — becoming a net drag on the economy.

It would truly be the nanny state, forevermore, with declining standards of living.

Then, elections would revolve around not how to best grow the economy or create jobs in the private sector, but how much everyone’s annual stipend should be increased. Both businesses and individuals would clamor for more, since then more goods and services could be bought and sold — a vicious cycle of ever-increasing dependency.

Ultimately, individual welfare will become corporate welfare, affirming the end of capitalism as we know it and confirming that the American system is no longer one of innovation, but of subsidy.

Zuckerberg joked at the Harvard commencement address that Millennials do not need to find their purpose, that they try do that instinctively. He believes that a little extra income would create room for innovation, and incentivize individuals to become producers. But just the opposite would occur.

Instead, guaranteed income would crowd out other potential opportunities in the economy, disincentivize risk-taking and reward complacency — wrecking individuals’ sense of purpose. Individuals, working less, would transition to simply being consumers.

After all, why take risks and try to invent something when the government will take care of you for free and you can sit around watching streaming movies, playing games, or worse? Surely, such a system would create more opportunities for leisure activity. Yet, necessity is the mother of all invention. Remove need and what remains?

Again, there are already 55.2 million 16 to 64 year olds not in the labor force, an increase of 16.5 million since 1997 as labor participation declined. How many more would join those ranks under Zuckerberg’s plan?

Ultimately, like utopianists of the years past, Zuckerberg’s political program of “universal basic income,” if implemented, will be judged by what it led to. If his vision leads to even less growth, fewer jobs per capita and lower incomes, combined with declining living standards and more debt, it will end up on the same ash heap of history as other failed ideologies that couldn’t keep their promises.

Robert Romano is the senior editor of Americans for Limited Government.

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