Carte Blanche: CARES Act Could Be A Trial Run For Universal Basic Income

Quartz Image featuring Andrew Yang

Let me preface this argument by saying how I hope each and every individual remains safe and healthy during this crisis, and I offer the most sincere condolences for any and everyone affected by this catastrophic event.

In response to the nearly complete shutdown of global and American society due to COVID-19, Congress passed the CARES Act: a 2 trillion dollar relief bill to cushion the fiscal blow to American citizens. Among the provisions of this enormous spending bill, is a $1200 stimulus check for individuals making below $75,000 a year as well as extended unemployment insurance worth up to 600 extra dollars on top of previous benefits.

Economists, political theorists, and policy analysts are going to salivate over the economic impacts and viability of this bill and another policy proposal that has recently been in the American political discussion: universal basic income. Of course, trying to maintain this level of spending once the economy entirely reopens would not be feasible due to the tremendous deficits we could see under current government expenditures.

Universal basic income has been a divisive topic in the Libertarian community because many Libertarians believe that a UBI could justify reducing other inefficient government programs and effectively reduce the size of the government to the specific action of distributing funds. On the other side of the debate, a fiscally conservative libertarian would consider this sacrilege to Libertarian ideology. 

First of all, we should treat CARES as a temporary remedy tailored for a dire situation, since this bill is already 50% of what the government expected to spend in its budget. Not to mention previous experiences with extended unemployment benefits, such as the 2009 Obama-era ARRA legislation, did not result in permanent legislation but stimulus checks have become a token remedy for economic recessions.

Secondly, CARES does not function as an ideologically adequate form of UBI since a true libertarian would argue that, at least, every citizen would receive this income in order to be truly egalitarian. A government that could pick and choose who was and was not eligible would be seen as tyrannical and could evolve into something even more sinister. However, this experiment is on a large enough scale to properly gauge public interest.

It would be reasonable to say that I am getting ahead of myself for suggesting that the CARES Act would lead to the implementation of a UBI. However, I would argue that such a dramatic shock as this pandemic will render economic effects that will carry on well beyond the creation of a vaccine. 

Proposal for UBI links its origins back to the 16th century from famous renaissance philosophers, Thomas More and Johannes Ludovicus Vives, when thievery was rampant, severely punished, yet unsuccessfully deterred. The most prominent and recognizable voice for UBI in the US would be the former Democratic Presidential candidate, Andrew Yang, who proposed the Freedom Dividend.

A UBI, on the surface, seems to be a libertarian’s nightmare: legitimizing the government in its role of redistributing the wealth as well as supporting taxation to support such an endeavor. I will admit, having seen the government bungle handling the coronavirus response, my faith in government capability has never been lower in my times as a libertarian.

However, COVID-19 has sped up the advancement of tech-driven business models, and it will only further push businesses to seek tech-driven options in order to maintain their business. Of course, tech has not been invincible against the effects of COVID-19, but disruptions in normal operations have necessitated transitioning to more technologically advanced operations. 

For example, supply chains have been seriously debilitated due to shutdowns and government protocols, however, blockchain technology has seen a massive increase in investment and implementation due to its ability to deter corruption. Therefore, autonomous operations, AI, etc. are essential for businesses that cannot rely on humans due to safety protocols designed to stymie the effects of COVID-19.

In the words of Andrew Yang, “once those jobs are automated away, we won’t get them back”. A libertarian should view automation innovation with awe of the market and concern for the individuals. Do we expand the welfare state, and increase the caseload of the government, which is already stretched thin, or do we elect to decrease regulations and give laborers more bargaining power, but at the risk of tyrannical corporations?

I would argue that libertarians should get ahead of this issue and compromise on a program that could place them at the forefront to mitigate the effects of an evolving society. There are libertarians who argue that a UBI is the most libertarian-friendly social program, and one of the best arguments I have recently read has been from University of San Diego School of Law Professor, Miranda Fleischer, and her paper titled “Atlas Nods: The Libertarian Case for a Basic Income”. 

Fleischer makes the distinction between the “anarcho-capitalists”, “minimal statists”, and then “classical liberals” on the spectrum of libertarian thought with the anarchists and classical liberals being on opposite ends of the spectrum while minimalists being in the middle. Fleischer appeals to minimalists with the argument that such a massive social endeavor could justify eliminating wasteful government programs and streamline operations to focus primarily on distributing checks to the population indiscriminately.

This is a compelling argument considering the anarcho-capitalist dream and even the “Nozickian” utopia of a minimalist society might be too idealistic for the American people since the state has already been established as a provider. It is utilitarian in approach, compromising on such principle tenets of libertarianism, but it could be the most effective approach to protect another core tenet: freedom of the individual. 

Trusting the decision-making of individuals to best allocate their own funds is the very essence of libertarian ideology; no longer can the government continue paternalistic practices and allocate aid in the form of food stamps or healthcare, when individuals might not value those as much as the freedom to spend capital most effectively for their situation. Placing money in the hands of consumers that they could reliably expect would alleviate the miserly attitudes that arise from having too little.

The use of “miserly” is not to condemn anyone for saving money, but it is a natural reaction to preserve and ration when there is a fear of scarcity. An indiscriminate safety net for all could cultivate innovation at the most fundamental grassroots of American society because individuals would feel more comfortable pursuing a risky venture if they knew that their access to essential funds would not be at risk if they failed. 

Of course, there is easily a strong libertarian counter-argument that would argue stress and fear of failure could be the strongest drivers of innovation, however, a UBI would increase the likelihood of innovators and entrepreneurs since the regular stresses of life could be overcome by the basic financial provision. 

In the end, this is quite idealistic, however, even a rudimentary form of UBI might be necessary after the American people have already tasted what it is like to have basic financial assistance. If we don’t, at least, consider such an approach, then we risk other political factions seizing power to the detriment of the individual.