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'Give People Money' and 'The War on Normal People' Review: The Cure for Poverty?

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'Give People Money' and 'The War on Normal People' Review: The Cure for Poverty?

The Wall Street Journal July 10, 2018
EconomicsEmploymentIncome Inequality

A guaranteed income does nothing to address the misery of joblessness, nor the associated plagues of divorce, opioid abuse and suicide. Edward Glaeser reviews “Give People Money” by Annie Lowrey and “The War on Normal People” by Andrew Yang.

The concept of a universal basic income, or UBI, has become part of the moral armor of Silicon Valley moguls who want a socially conscious defense against the charge that technology is making humanity obsolete. The logic of UBI runs that if every adult received $12,000 annually in free, unfettered cash, then we would not need to worry about an ocean of underemployed men who numb their feelings of worthlessness with computer games and opioids. The folly of UBI is that it sees a cash payment as a substitute for purpose and accomplishment and that it enables joblessness when we should be encouraging employment and job-creating innovation.

Two new books examining UBI are better than their subject deserves. Annie Lowrey’s “Give People Money” advances the general progressive case for UBI as a new link in the safety net. Andrew Yang’s “The War on Normal People” is squarely targeted at the techno-dystopians who see UBI as a response to a jobless future in America.

Ms. Lowrey’s case is stronger, even though her best chapter, “The Kludgeocracy,” focuses on India and other poorer countries rather than the U.S. She argues that these nations should “shift away from subsidy programs toward cash transfers or other simpler benefit programs.” Providing cash, rather than, say, rice or a “sprawling rural employment guarantee scheme,” has the virtues of “universality, simplicity and unconditionality.” Universality is important because “the Indian government struggles to determine who is poor and who is not.” Simplicity is important because complexity invites corruption and inefficiency. Unconditionality is important because many programs create perverse incentives: Urbanization provides the best path from poverty to prosperity, yet rural-employment schemes keep workers home on farms.

The evidence from cash-transfer experiments abroad, like GiveDirectly in Africa and Brazil’s Bolsa Família, is quite positive. Mr. Yang notes that, among cash recipients, “domestic violence rates dropped, mental health improved, and people started eating better.” Poverty is the defining problem of the developing world, and cash is the most direct weapon against poverty. But does that logic carry over to the wealthy, but underemployed, U.S.?

Continue reading the entire piece here at The Wall Street Journal

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Edward L. Glaeser is the Glimp professor of economics at Harvard University, a senior fellow at the Manhattan Institute, and contributing editor at City Journal.

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