Elon Musk Wants to Give You Money for Nothing

Hindustan Times

11 hours ago

A Journal report last week explained how tech titans, including Tesla's Elon Musk and OpenAI's Sam Altman, envision a 'massive wealth-redistribution system' to placate worries over technology displacing human work. Twitter co-founder Jack Dorsey and Facebook co-founder Chris Hughes have spent millions in recent years on pilot projects that offer unconditional monthly cash payments to low-income people. Software billionaire Marc Benioff, another 'evangelist for universal basic income,' according to the Journal, 'sees Covid-19 stimulus checks as a model for broader income distribution.' Oh, brother.
It's often forgotten that in the early days of the country's 'war on poverty,' the general understanding was that you alleviate privation by reducing dependency on the government and creating incentives to become more productive. The goal was 'to help our less fortunate citizens to help themselves,' President John F. Kennedy said. 'We must find ways of returning far more of our dependent people to independence.' Paying people not to work might lift families above the poverty line, but it also increases dependency. In the 1960s and '70s, as welfare-state programs proliferated, the number of people receiving public assistance more than doubled.
Giving out money for nothing is a concept typically associated with the political left. Yet over the decades luminaries on the right—Richard Nixon, Milton Friedman, Charles Murray—have advocated policies that would provide a federally guaranteed income floor and relieve able-bodied adults of the need to work. Given the economic uncertainty surrounding AI, the idea of a social insurance program in the form of a minimum level of income for everyone has an understandable appeal.
But be wary of tech moguls preaching supposedly altruistic wealth-redistribution schemes to burnish their public image. As with the environmental, social and governance advocacy, there's an agenda beneath the happy talk. Silicon Valley would do better to focus less on some liberal concept of social responsibility and more on innovations that will improve productivity and produce profits for shareholders. Mr. Musk and company didn't become rich at the expense of the poor, and taking from workers to give to those who refuse to work is a recipe for resentment and a bumper crop of layabouts.
Some argue that we already have a kind of guaranteed-income system that's implemented haphazardly via hundreds of welfare programs at the federal, state and local levels. A single unrestricted cash-transfer system that replaces the welfare state bureaucracy, the thinking goes, would be more efficient. Unfortunately, the country's thriving poverty industry, which includes powerful lobbyists and politicians who get elected to protect it, are unlikely to take that trade. The more probable outcome is that an income guarantee would be added to the hundreds of existing entitlement programs instead of replacing them.
Nor do we have any reason to believe that issuing no-strings-attached cash stipends to poor families works as intended. 'Significant but indirect evidence has suggested that unconditional cash aid would help children flourish,' the New York Times reported last month. 'But now a rigorous experiment, in a more direct test, found that years of monthly payments did nothing to boost children's well-being, a result that defied researchers' predictions.'
The study, titled 'Baby's First Years,' concluded that after four years of monthly payments of $333, children whose parents received money 'fared no better than similar children without that help.' Co-author Greg J. Duncan, an economist at the University of California, Irvine, told the Times that he was 'very surprised—we were all very surprised' by the results. 'The money did not make a difference.'
That study didn't find that mothers worked less, but other research involving larger stipends has concluded they can negatively affect work habits. Last year, the National Bureau of Economic Research published a working paper on the employment effects of guaranteed income, which was described as the most comprehensive study of its kind to date. Researchers found that families who received $1,000 monthly payments for three years worked fewer hours.
The problem America faces today is a lack of work incentives, and that problem is exacerbated by government programs that make not working more attractive than getting a job. 'Nearly 7 million men in the prime of life—over a tenth of the 25-to-54 age group—are neither working nor looking for work these days,' writes Nicholas Eberstadt of the American Enterprise Institute. 'Today, for every 'prime age' man who is actually unemployed—out of a job but looking—there are three who are neither working nor looking for work.' The reasons for this are complex, but it isn't hard to understand why giving people more money to live on without working won't help matters.