The War on Normal People: The Truth About America’s Disappearing Jobs and Why Universal Basic Income Is Our Future by Andrew Yang
My rating: 4 of 5 stars
I admit that I hardly paid attention to Andrew Yang during the primaries. I knew that he was for Universal Basic Income (UBI), but little else; and it did not seem to matter, given his pole numbers. But during the economic fallout caused by the coronavirus lockdowns, UBI is starting to look all the more reasonable (especially after I received a direct deposit from the federal government!). So I decided that it was time to take a second look.
This book could easily have been mushy pap—a boilerplate campaign book only published for publicity. Yang could have gone on and on about his good work in Venture for America, all the inspiring young people he met, all the businesses he helped grow, and all of the wonderful places he visited across America. He could have talked about his own story from first generation American to entrepreneur and politician. Some of that is in here, of course; but not nearly as much as one might expect. Instead, Yang has written a serious work on the problems facing America.
Yang covers a remarkable amount of ground in this short book—video game addiction, the importance of malls in communities, the rising cost of universities—but his primary message is fairly simple: Automation is going to eliminate many millions of jobs, and we need to transform the economy accordingly. As someone with many friends in Silicon Valley, Yang speaks convincing on the subject of automation. An obvious example is self-driving cars. Once the technology becomes reliable enough, virtually all driving jobs are threatened. Considering the numbers of people whose work involves transporting either passengers or cargo, this alone can be dramatic. What would happen to all the taxi, bus, and truck drivers of the world?
But according to Yang, self-driving cars would only be the beginning. While automation may call to mind robotic arms laboring in factories, white collar jobs are also liable to being automated. Chances are, if you work in an office, at least some of your work is rote and repetitive; and that means a computer could potentially do it, and do it far better than you can. While most of us are far removed from the world of artificial intelligence, those in the community routinely seem alarmed by the prospect of increasingly powerful A.I. Every year a new program accomplishes another “impossible” task, such as mastering the Chinese game Go. Yang even mentions computer-written symphonies and computer-generated artwork! (I was happy to note, however, that Yang did not seem to think teachers could be automated away.)
This will result in still more intense economic stratification. Many parts of America have already hollowed out as a result of recent economic trends. Most of the country’s factories have closed, destroying some of the most well-compensated blue-collar jobs. The rise of online retail—only accelerated by the coronavirus crisis—threatens to permanently destroy much more employment. Of course, when some jobs are eliminated, other types of jobs come into being. But we cannot rely on this process to correct the imbalance—first, because automation destroys more jobs than it creates (think of the one trouble-shooter for every five self-checkout registers), and second, because the new jobs usually require different skills, and exist in different parts of the country.
There are many proposed solutions in this book, but Yang’s signature idea is UBI. This would be a monthly payment of $1,000, or $12,000 a year, to every citizen over the age of 18; and it would be given a very patriotic name: the Freedom Dividend. Yang proposes to pay for this with a Value Added Tax (VAT) of 10%. (I was actually unaware of the difference between a VAT and a sales tax before reading this book, which is that a VAT must be paid at every step in the production process. This has the added advantage of taxing automated industries, since robots do not pay an income tax.) But the hefty price tag of UBI would also be partially compensated by the reduction or elimination of other government welfare programs. And, of course, if you put more money into the hands of consumers, most of them will spend rather than save it, and this will in turn increase tax revenue.
One obvious objection to UBI is that, by giving money indiscriminately, we will inevitably be giving it to people who do not need it. The most apposite reply to this objection, for me, is that subjecting government assistance to means-testing creates a host of problems. For one, there is a great deal of cumbersome bureaucracy involved in determining whether a particular person ‘deserves’ aide—bureaucracy that would be rendered entirely redundant by UBI, since the checks can be sent out through the IRS. Indeed, this cumbersome bureaucracy only creates added waste, since many NGOs exist simply to help people navigate the complex government paperwork. Of every, say, $100 spent on welfare, what portion of that goes to those in need, and what portion to the paychecks of bureaucrats laboring to determine who gets the money and how they can spend it?
Indiscriminate giving would also eliminate the pesky problem of disincentivizing work. At the moment, Republicans and Democrats are in a dispute over this very issue, as Republicans are arguing that the extra $600 of unemployment money (as part of the coronavirus aid package) will encourage people not to work. While some on the left disagree, personally I think this is a rather strong objection—not to giving people money, but to making the money conditional on not having a job. The same issue is present in many other sorts of government aid, such as disability payments, which cease as soon as the recipient becomes employed. If the money were unconditional, however, then people would have no disincentive to work; on the contrary, they would be able to substantially improve their economic situation by working, perhaps even making enough to start saving and investing.
UBI, then, has potential appeal for both those on the left and on the right. Those on the left may like it because it is a way of redistributing wealth, while those on the right may like it since it is a way of shrinking the government. The latter statement might seem more far-fetched, but I do think that a solid, conservative case could be made for UBI. After all, Milton Friedman was quite an avid supporter of the concept, for a multitude of reasons: it shrinks government, it reduces government paternalism, it promotes both work and consumption, and it would avoid dividing people into different categories.
This last point merits some comment. Presently, a great deal of anti-welfare rhetoric is concerned with parasitism—the idea that lazy people are simply ‘on the dole,’ dragging down the rest of society. It is the perfect recipe for shame and resentment, since inevitably it divides up society into groups of givers and takers; and even the best government bureaucracy in the world could not hope to distribute money in the fairest way possible. Inevitably, some people who ‘deserve’ aid will not get it; and others who do not ‘deserve’ it will—since no definition of ‘deserving’ will be perfect, and in any case there is no way of perfectly measuring how much somebody ‘deserves.’
UBI works against this psychology in a powerful way, by being entirely indiscriminate. Though the rich would be paying more in taxes than they receive back, they too would receive their monthly payment, and I think this fact alone would help create an added sense of social solidarity. UBI would be something shared by everyone, everywhere, rather than something that marks you out as being poor and dependent, a mark of stigma and shame. This strikes me as quite a positive thing in the age of dramatic political polarization.
Another aspect of UBI that I find deeply appealing is that it will give people the freedom to pursue less well-remunerated, but more socially beneficial, work. As Yang points out, many of the most humanly important jobs—being a parent, an artist, or even an online book reviewer—are quite poorly compensated, if they are compensated at all. An economist might argue that this is justified, since the free market determines the value of work based on supply-and-demand. But I think that this logic will become less appealing as robots start to out-compete humans. Indeed, perhaps automation will erode our faith in the wisdom of markets and meritocracy, since it will be difficult to believe that a delivery drone is more deserving than a delivery driver, even if it gets more work done.
There are, of course, many objections to UBI, one being that it will encourage widespread free-loading. But the evidence for this is quite weak. As Yang demonstrates, in the many UBI trials that have been conducted, work reduction was quite low, mostly taking place among new mothers. And as I mentioned above, our current welfare system arguably encourages free-loading far more effectively than UBI would, since UBI does not disincentive work. In any case, I think all of us—especially new mothers!—could do with a modest reduction in work hours, given the fact that study after study shows that long hours do not benefit productivity. Instead of having humans emulate work machines, then, it would be far better to automate as much work as possible—since machines never sleep, never eat, and never get sick—and focus on the remaining work which really does require a human touch.
Yang addresses many other objections to UBI, and most of his arguments are convincing. I do have one nagging question, however, and it is this: If the purchasing power of the general population is increased across the board, will prices of food and housing correspondingly increase? Though I am economically naïve, it strikes me that this is bound to happen, at least somewhat; and this may partially offset the gains of UBI. But perhaps I am mistaken. Another question is whether automation will go as far as Yang predicts. I found most of his forecasts—particularly about self-driving vehicles—quite compelling. But it does seem possible that the affects will be less sweeping than Yang supposes. For example, I cannot imagine couples turning to an A.I. marriage counselor with the voice of Morgan Freeman, as Yang somewhat fancifully imagines.
In any case, while Yang’s twin themes of automation and UBI are his central message, his book has far more to offer. I particularly appreciated his portrayal of the economic plight facing many parts of America, and the increasingly stark divide between those with and without a college degree. For example, I often find myself forgetting that the majority of American adults do not have degrees, if only because almost all of my friends and family have one. Considering how many jobs—including low-skilled jobs—require a degree, this is a major economic disadvantage nowadays.
The fact that I can forget about this economic disadvantage is a measure of the degree to which different parts of the country are insulated from one another. And the university system is not helping to even the playing field. After all, most of the people who do obtain degrees are already from comparatively better-off families. The university system also does not add to economic diversification, since students are pursuing an increasingly narrow range of majors; and after college, most graduates move to one of a handful of large cities. The result is an increasingly stark economic divide between Americans with college degrees living in large cities, working in a shrinking number of industries, and those living in more rural areas, or hallowed out cities, without degrees. It is an inimical process.
Yang also deserves credit for his mental flexibility. Besides UBI, this book contains a range of proposals, all of them quite new to me. Considering the degree to which political debate is dominated by decades-old proposals, I found this extremely refreshing. Admittedly, I do think that Yang’s Silicon Valley message failed to resonate with the voting public for a reason. While he has much to say about the future of America’s economy, he is less convincing on problems besetting many Americans now, most notably health care. Yang does favor a version of universal coverage, and he has some very intriguing things to say about how technology can change the role of the doctor, but I think it is fair to say that this was a minor part of his book.
Yet if this book fails as political marketing, it succeeds in being both a thoughtful meditation on the problems facing the average American, and a set of bold proposals to address these problems. While so many politicians come across as blindly ideological, stupidly partisan, or simply as creatures of the political system, Yang is intelligent, imaginative, and unconventional. I hope that this is not the last we hear from him.
View all my reviews
The War on Normal People: The Truth About America’s Disappearing Jobs and Why Universal Basic Income Is Our Future by Andrew Yang