In 1966, sociology professors Richard Cloward and Frances Fox Piven wrote an article for The Nation magazine contending that many people eligible for welfare were not getting money from the U.S. government. The solution, they said, was a welfare sign-up drive. It would strain state and local budgets to the breaking point, which would allow Democrats, who controlled the presidency, the House and the Senate, to ride to the rescue with ... a guaranteed annual income.
That did not happen.
In 1969, however, Donald Rumsfeld, director of the Office of Economic Opportunity under President Richard Nixon, recruited a young Dick Cheney as his special assistant, and the two explored a minimum income paid to poor families.
“When you look at a period like the 1960s – with high employment, low unemployment and at the same time escalating dependency – you ask yourself what would be the story in less prosperous times,” Rumsfeld told The New York Times then.
“When this happens in such a period of general national prosperity, it’s obvious something has to be wrong with the present system. So ... let’s find out what’s wrong, and let’s change it.”
The future secretary of defense and future vice president ran an experiment in New Jersey and Pennsylvania. The control group were poor working families who got no other subsidies. The experimental group was paid enough to bring their incomes above the poverty line.
There was an assumption, then as now, that if people were given money without working for it, they would have no incentive to work long hours in menial jobs. Not true, Rumsfeld and Cheney found.
Nixon – “to the amazement of most of Capitol Hill” – liked it. And then the House passed his guaranteed income program. It was deep-sixed in Senate committee, but it was only sleeping.
Lately, the idea of a universal basic income (UBI) has come into vogue. Such a program would have no means test. It would be distributed automatically to all citizens. Part of what is propelling interest in it is the assumption that robots and artificial intelligence will soon eliminate many soul-crushing jobs.
Last year, eBay founder Pierre Omidyar financed a UBI trial program. The Silicon Valley startup fund Y Combinator financed another. This is when media theorist Douglas Rushkoff smelled a rat.
Digital behemoths like Amazon and Uber only exist to extract all available wealth from economies and transfer it to the super-rich, Rushkoff argued in an article with a title that left nothing to the imagination – “Universal Basic Income Is Silicon Valley’s Latest Scam: The plan is no gift to the masses, but a tool for our further enslavement.”
Digital monopolists drain markets so completely that consumers go broke, Rushkoff said. “To the rescue comes UBI. ... In this new incarnation, however, it merely serves as a way to keep the wealthiest people ... entrenched at the very top of the economic operating system.”
The answer, Rushkoff contends, is to give people not income but shares of assets – “everything from national parks to mineral and cultural resources to critical parts of physical or digital infrastructure.”
It is a radical idea – so radical, in fact, that in 1795, the apostle of the American Revolution, Thomas Paine, advocated much the same thing, a dividend paid to all American citizens for the “loss of their natural inheritance, by the introduction of the system of landed property.”
One more spin of the wheel and we are going to get this right.