Andrew Yang tells a good story but UBI won’t solve our problems
Entrepreneur Andrew Yang has built his Presidential campaign centrally around one issue: Universal Basic Income. He calls it the Freedom Dividend. UBI is an idea that’s been kicked around over the last few years as a solution to the upcoming threat of automation. The theory here is that technology is moving so rapidly that millions of jobs will be wiped out at an alarming rate soon and the solution to this is to guarantee each person a monthly income, no questions asked. Yang has proposed that it should be $1,000 a month for every adult citizen in the United States.
To his credit, Yang’s UBI movement has been pretty successful, especially for someone who has no political experience before this. He has gathered a lot of grassroots support by actually speaking on some real issues and concerns of everyday Americans. He has even polled better than Senator Kamala Harris, Senator Cory Booker, and Senator Amy Klobuchar at times.
So, does Andrew Yang and other’s theories about automation and the loss of jobs hold up? Does their UBI solution make sense in today’s world?
First, we need to analyze how we got in the predicament we are in now. Forty years of neoliberal, free-market solutions have brought the largest wealth and income inequalities ever witnessed in history. Basic needs like health care and education have become unaffordable and the planet is headed for extinction if we continue the path we are on. Yang, at times, does acknowledge some of this but mostly, he focuses on the automation problem of the future. His lack of historical context leads to a short-sighted solution of universal basic income.
Keynes On Automation And Leisure
Andrew Yang isn’t the first person to talk about the potential of large job losses from automation and other factors. British Economist John Maynard Keynes theorized in 1930 that his grandchildren would experience a 15-hour workweek and humans, in general, would have plenty of leisure time. He also predicted economic growth would raise eightfold as well. Keynes had a very optimistic view of technological unemployment. He postured that with machines doing more and more of the work, the rest of society would experience increased leisure time and less time on the job. Despite getting the economic growth prediction correct, we ended up with the worst outcome of technological unemployment — Americans desperately seeking any low-wage work they can find in order to get by.
In the United States, Americans are working more hours than ever, with prime-age workers averaging over 40 hours a week. Workers are not guaranteed any vacation time, federally. At the same time, wages have failed to rise for almost four decades while productivity has soared. Those productivity gains have not gone to the workers, but rather they are reflected in higher profits for shareholders and executives.
Large corporations have hijacked our political system and write the laws that govern them. As a result, unions have been destroyed, benefits and pensions were slashed, and wages have not budged. Free trade policies and yes, technological advancements, have also disrupted large parts of our economy and the workers within certain industries.
What we need to realize, however, is that these are not inevitable outcomes. Those trade deals were voted upon and supported by many in elite circles without taking into account the brutal consequences for millions of working-class Americans. Automation also doesn’t have to result in fewer jobs and a lower standard of living. Keynes’s vision of his grandchildren certainly could be realized with the right economic structure in place.
Marx Was Right About Automation And Capitalism
Karl Marx had many great insights about the shortfalls and contradictions of a capitalist system and economy. He was maybe most accurate on his predictions on technological advancements.
Marx explained that the laws of capitalism, especially the intense competition between capitalists for greater profits would force each of them to find any way to reduce costs in order to sell their products at a lower price. One effective way to do this is to increase productivity by replacing labor with new machinery. Marx, in his own words, explains how this phenomenon leads to an increase in unemployment and allows workers to become more exploited over time:
The fall in prices and the competitive struggle, on the other hand, impel each capitalist to reduce the individual value of his total product below its general value by employing new machinery, new and improved methods of labour and new forms of combination. That is, they impel him to raise the productivity of a given quantity of labour, to reduce the proportion of variable capital [wages] to constant [machinery, tools, equipment, raw materials, etc.] and thereby to dismiss workers, in short to create an artificial surplus population…
The same causes that have raised the productivity of labour, increase the mass of commodity products, extended markets, accelerated the accumulation of capital, in terms of both mass and value, and lowered the rate of profit, these same causes have produced, and continue constantly to produce, a relative surplus population, a surplus population of workers who are not employed by this excess capital on account of the low level of exploitation of labour at which they would have to be employed, or at least on account of the low rate of profit they would yield at the given rate of exploitation.(Capital, Volume Three, Chapter 15, p363–364, Penguin Classics edition)
It is not the technology itself that will wipe out millions of jobs. It is the use of technology under a capitalist system that leads to mass unemployment and subsequent lower wages due to the increased competition for work. With the desperate need for low-wage work, people continue to work very long hours in order to survive.
The Way Forward?
Getting back to the original question at hand — will UBI fix our impending doom? Is it the magic bullet Andrew Yang claims it to be?
Marx’s analysis shows us that technological advances under capitalism will result in large problems for society. The problems are already here, we don’t have to wait. Left to their own devices, corporations will allow workers to suffer from job loss and low wages, just as they always have. Yang has that part correct. However, his root cause is automation alone, not capitalism itself.
Yang actually addresses this briefly in his FAQ under the question, Isn’t this Socialism/Communism?. He states that his freedom dividend is required in order to keep capitalism alive.
Andrew Yang is correct on this point. UBI may be the very thing that keeps the current capitalist system afloat. In essence, it allows corporations and other employers to continue to pay low wages and still take in the majority of this government transfer to their bottom lines. Yang’s method of funding this through a VAT does not help much either. Nor does his recent pivot from Medicare For All and his promise to cut back on other social programs many Americans rely on.
Andrew Yang represents giving up. Andrew Yang is throwing in the towel. What he is saying is that a better society isn’t really possible. He believes that capitalism is the only way forward and that automation is the culprit for the destruction of jobs and the loss of purpose among the masses.
However, continuing with the current system with UBI does not solve many of the underlying issues. Unaffordable housing doesn’t go away. Instead, landlords could simply raise your rents even more since they now know you have an extra $1,000 in your pocket. Even if that isn’t the case, Yang also wants to cut programs that help some Americans with housing costs. Without Medicare For All, insurance companies can raise rates even higher as well. College costs won’t be controlled and the environment surely isn’t going to get better through private means.
Yang repeatedly mentions cutting social programs on his website, even citing Milton Freidman, the far-right economist. Replacing specialized programs with UBI that doesn’t lift one out of poverty is not solving any problems for poor Americans. It pushes them even deeper into the dog-eat-dog world of capitalism. This is just a continuation of the last few decades, as our safety net has been dismantled through welfare reforms, cuts to food stamps, and not properly measuring poverty levels. Increasingly, Andrew Yang’s vision looks like a libertarian’s dream.
Despite what Yang believes, things do not have to be this way. There are other routes we can take. When Keynes envisioned us working 15 hours a week, he foresaw us achieving a life where our basic needs had been met due to technological advancements. Therefore, we only needed to work a few hours a day alongside machines in order to live the same life they once did working 40+ hours a week.
Instead of the capitalist approach of cutting jobs to save on labor costs because of automation, employees could simply work fewer hours to achieve the same outcomes. In this type of society, machines and humans collaborate to actually produce better lives for the vast majority of people, rather a select few at the top. This is summarized by Marxist David Booth,
Man and the machine could co-exist in harmony rather than in competition. Rather than generating the contradiction of unemployment alongside extreme toil, work could be shared out equally and the hours of the working day could be reduced for all, with further investment and improvement leading to an ever increasing amount of leisure time.
Corporations or capitalists aren’t going to just allow something like this to happen without a systemic change in the political sphere. Despite UBI being a new idea to American politics, it doesn’t change our corrupted system of capitalism.
A large grassroots movement that demands that more power is given to workers and unions is what can move the needle. Shareholders and executives care about one thing — profit. Giving employees more say at their workplace ensures that profit isn’t the only goal. They can demand things like more vacation or leisure time and fewer working hours.
Yang misses the class struggle in this. He believes simply giving everyone a handout empowers people. But that $1,000 doesn’t do a whole to actually take control away from the large corporations in places like Wall Street and Silicon Valley. Other candidates in the race, like Bernie Sanders, understand this power dynamic and have put forward real plans of action instead of resigning to the failed system we have propped up.
The Freedom Dividend doesn’t provide much freedom at all. It only shackles us to a failing capitalist system even longer than required.