You might have heard of Andrew Yang. He’s running for president as a Democrat. A long shot, for sure, but he’s already generated considerable interest and support. Last month, he announced that he had received contributions from over 65,000 donors in over 20 states, enough to qualify him for the first round of debates by the Democratic candidates.
Yang, from a Taiwanese immigrant family, was born in Schenectady, NY, went to elite schools, and became a corporate lawyer working for startup companies. Later he served as the CEO of Manhattan Prep, a company which administers the Graduate Management Admission Test (GMAT) for business school applicants. He went on to run a non-profit, Venture for America, whose internship programs place graduates into startups across the country.
As a presidential candidate, Yang stands out for proposing what he calls the “Freedom Dividend,” a $1000/month payment, or guaranteed annual income, to all US citizens over 18 years of age. There’s a long interview on The Joe Rogan Experience explaining his ideas which has received over 2,600,000 views: https://www.youtube.com/watch?v=cTsEzmFamZ8
Yang’s campaign slogan is “Humanity First,” which reflects his big campaign issue: the fact that automation and robotics are displacing human labor throughout the economy. Jobs are a key issue across the country The solution may not be more jobs, but something entirely different, like Yang’s Freedom Dividend.
Cutting labor costs enriches investor/owners, but it’s catastrophic for workers. Self-driving vehicles are going to put truck drivers out of business, just as scanners have reduced supermarket checkout clerks, and online purchasing has devastated retail outlets.
Automation affects not just factory-line workers, but most wage-labor, even on a professional level. Doctors, lawyers, and tax preparers are being replaced by remotely controlled automated services, the way travel agents have been replaced by online booking, and teachers and college professors now compete with online courses. Certain service sectors–plumbers, electricians, contractors, waitresses–continue to resist automation, but they too are vulnerable.
There are still jobs, of course, but they no longer provide the economic security they used to for the bulk of the population. Traditional wage-labor is a shrinking proposition, ever harder to achieve, leaving most of the population redundant, less and less able to support itself. The jobs that remain are all too often low-skill and low-pay, insufficient to support a family.
Labor, Yang is telling us, is no longer the source of security and value it once was. His attempt to restore economic security–a basic guaranteed income–is a radical departure from the usual remedy of trying to “create” more jobs. The government simply prints and sends you the money, instead of trying to find you a job.
If you just give people money, they will spend it, and stimulate the economy. At least that’s the idea. Adding money to the economy–all other things being equal–means more dollars chasing the same goods and services. That’s inflationary, unless the new spending is matched by enough new production to satisfy the new consumption.
And that’s the problem. If money is continuously printed faster than the economy is growing, we will suffer inflation, perhaps hyper-inflation. Yang and other guaranteed income advocates have yet to explain how their schemes will avoid inflation.
There might be a clue, however, in his use of the word “dividend.” The word suggests an income from a share of ownership in corporate assets. Alaska’s Permanent Fund Dividend comes to mind. Since 1982 it has distributed an annual royalty share of corporate revenue from Alaskan public resources (mostly oil and gas) to all state residents. The amount fluctuates (up or down) with corporate profits (and losses) over time. In 2018 the payment was $1600 per person ($6400 for household of four).
A guaranteed national income could be modeled on the same idea–an individual dividend paid out of a permanent fund supported by corporations. That would add a measure of public ownership of the means of production. Instead of 100% of corporate stock being privately held, a certain percentage could be publicly held, and form the basis of a national dividend.
Unlike, say, the Green New Deal, there would be no government management, control, or bureaucracy. The permanent fund would receive its share of dividends straight from corporations, and, in a simple bookkeeping operation, send annually to each citizen their equal individual share of the total.
A national dividend would not only give regular citizens a stake in the economy, it would also ensure that the money distributed would be neither inflationary or deflationary, but an accurate measure of the value of the economy, fluctuating with the ups and downs of economic activity.
That’s not socialism–corporations would still be privately run for profit–but it is a way to share ownership more broadly. Call it populism.