Chris Hughes bites off a bit more than he can chew in his new book. / PatrickSeabird
Max B. Sawicky,  March 7

Foul Shot

Chris Hughes's Fair Shot makes the good Democrat's case, but does little else

Chris Hughes bites off a bit more than he can chew in his new book. / PatrickSeabird
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By the standards of Facebook’s titans, co-founder Chris Hughes was an also-ran. His payout from early participation in the company’s launch, which stemmed from the good fortune of having been Mark Zuckerberg’s college roommate, was only $500 million. To his credit, Hughes—a former fundraiser for Barack Obama now best known for his short-lived reign as The New Republic’s would-be Silicon Valley savior—is preoccupied with the injustice of his windfall and has investigated how best to give an appreciable chunk of his money away, in the service of good causes. This turns out to be a difficult project. One of his solutions is to devote himself to the advocacy of a new program to guarantee income for all Americans. He could have done worse.

I should probably lay bare a few biases before proceeding. I don’t like rich people. If you have more than couple of million dollars and are still focused on making money rather than giving it away, you’re an asshole. To be sure, I know a couple of people in this station who are not assholes, but if I don’t know you, that’s my presumption.

Another of the issues I have with Hughes’s new book, Fair Shot, is that in seeking to redress inequality via top-down wealth redistribution, Hughes is proposing a reform that raises several technical quandaries. He has worked some to understand them, but he has more work to do. His weaknesses in this respect are mirrored in the advocacy group he has set up to promote a guaranteed income, known as the Economic Security Project. This group is well salted with people from liberal foundations and the Obama campaign, but economists are not to be found. Nor is it clear if anyone there knows much about public assistance or social insurance. (Dorian Warren, a well-regarded political scientist, might be the exception.)

I should probably lay bare a few biases before proceeding. I don’t like rich people.

Finally, you could be forgiven for suspecting that I’m bringing to Hughes’s proposals some combination of “hey you kids get off my lawn” and “not invented here,” since I’ve done research on how to guarantee incomes. Hughes, like most of the world, betrays no awareness of that work.

Still, I want to be generous. I, too, am for a guaranteed income. Hughes’s sophisticated advocacy is a cut above the plethora of parallel appeals. Hughes’s book will be unsatisfying to wonks because it is light on technical matters. Its real value is its attempt to proselytize the lay reader. In this respect, it has some notable strengths and weaknesses. I’ll start with the good parts.

Like most advocates of a guaranteed income, these days often described as a “universal basic income” (UBI), Hughes is at pains to make the case that giving people money will not lead to indolence and a disinclination to work. He does a creditable job of this, dispensing with longstanding policymaking obsessions about the capture, care and feeding of the “deserving poor.” I’ve never needed to be convinced of the fallacies surrounding this project myself, but I’m in the minority.

Hughes’s second major contribution is his case that if you want to assist the economically bereft, cash payment is an indispensable component. He is not set against additional forms of assistance, such as child care, pre-K education, health care, and other remedies. But he is surely right that, by hook or crook, folks need money to support their families, and that such outlays will aid immeasurably in something that any healthy society should care about—the meaningful development of less-than-privileged children.

The large implications of the latter point may be unappreciated. It upholds the salience of individual agency. Contrary to generations of right-wing myth-making, the poor are capable of making responsible, rational decisions. They don’t need to be confronted with requirements on how to spend cash assistance. They are better situated than donors, however generous, to determine what expenditures are in their best interest. Hughes offers a blizzard of academic studies to this effect. The gist of all these findings can handily be summed up in a little bit of Twitter-style folk wisdom: “I get $10,000 a year; that’s enough for me”—said nobody ever.

There has arisen a cottage industry of research into cash grants that seeks to investigate their promise and limitations. Does giving people cash make them better off, in terms of a variety of measures of well-being, or do they spend it all on drugs and porn? Like me, you might not have needed to be convinced of this, but again: wonder of wonders, giving cash is damn helpful across a variety of wholesome dimensions. Insofar as Hughes can convince more people of this, it’s all to the good.

The other constructive theme running through the book is Hughes’s awareness of what is now called “precarity.” This refers to the proliferation of irregular work arrangements, and the corresponding lack of stable, 9-to-5 full-time, year-round employment. To an increased extent, the terms of U.S. employment fail to include such crucial benefits as group health insurance or time off for illness and vacations. The so-called gig economy is one facet, which harkens back to the ancient institution of “piecework.” At least with piecework, one could earn as much as one could spare the time and effort to produce. With gigs, however, the worker bears the inventory cost of his or her own idle time between calls. The upshot is that even though some work is available, and people are willing to work, their incomes remain depressed.

As he fleshes out the argument for a UBI, Hughes also manages to steer clear of two pitfalls that often greet such cases. One is the objection from budget keepers that a cash grant that can legitimately be called an adequate income floor is not realistic. You might not think that, say, $10,000 a year a person is adequate to make ends meet. Even so, such a UBI grant would cost over three trillion dollars, which in federal budget discourse does not pass a laugh test.

Nor does Hughes resort to trendy and misleading canards about the disappearance of jobs, though he was drawn to them until disabused by former Obama administration economist Jason Furman.

Hughes is also usefully mindful of the gambit underlying some libertarian support for a UBI—the objective of swapping out the gamut of existing safety net and social insurance benefits for a universal cash payment that would be subsequently naked before endless, vicious right-wing attacks.

In all these qualifications, Hughes’s case is that of a good, moderate Democrat. And that’s where the trouble lies.

The book launches with a ventilation of the current agitation over income inequality and the financial exaltation of the super-rich (among whom Hughes ruefully includes himself). Jobs may not be disappearing, but they’re often shitty jobs unequal to the needs of a family.

Hughes grew up in modest circumstances, so he has a feeling for what it’s like to live on very little. He turned out to be sufficiently industrious and bright to get full rides at Phillips Andover and Harvard. He can take full credit for that. Rooming with Zuckerberg was the jackpot lottery ticket, but without that he would probably be doing reasonably well today—not plunked down among the .1 percent, in all likelihood, but probably within the top three percent. In any case, he returns to the power of luck in shaping both his own fate and the fortunes (and misfortunes) of his peers.

Luck is a bad word in a self-regarding pseudo-meritocracy. It puts the lie to the delusion that everyone who attains great wealth did so by virtue of their own talent. Even talent isn’t necessarily enough: If Michael Jordan had suffered a bad leg injury in his youth, we would have never heard of him.

The role of luck goes against the value of fairness, and Hughes wants everyone to get a “fair shot.” There are two implicitly disparate values involved here—and unfortunately for Hughes’s argument, they tend to get confused.

On the one hand, there is the value of “equal opportunity,” or in economic terms, of mobility. We would like people with talent who exert effort to be rewarded, since the economy benefits, and because it’s just the right thing to do.

But mobility isn’t enough. For one thing, it’s a two-way street. Everybody having an equal shot at destitution does not, as a social goal, inspire much pluck and stick-to-it-iveness. We would also like to see some foundation of economic security, which is not the same thing as equal opportunity. Hughes recognizes that this foundation, for him supported by an income guarantee, should ideally ease the exploitation of opportunities.

And here’s the rub. Hughes’s problem is that his income guarantee is too low. He falls prey to the basic problem of the UBI—an income that is “basic” (adequate) is unrealistic in federal budget terms, and an income that is realistic (for Hughes, $6,000 a year) is inadequate. It’s certainly helpful, but it falls short of securing anything close to a stable livelihood. Hughes notes that such a foundation would help those stuck in the gig economy or in other types of precarious employment relations, but for some critics of the neoliberal employment regime, this might be viewed more as a bug than a feature.

The main current of the left today is focused on changing the institution of employment, on upgrading labor standards. The primary objective is full-time, year-round employment available to all comers, buttressed with universal health insurance and paid time off. Hughes’s income guarantee will help those able to advance up the income ladder, but it is of lesser help to the majority who will not, for one reason or another, start that advance. Hughes devotes a lamentable page to a potted critique of the idea of a national jobs guarantee. The provision of public employment is likened to a DMV—i.e., a lumbering, rage-inducing bureaucracy—which reads like the sort of thing you would hear on Fox News.

Evidently, Hughes’s own service in the 2008 Obama campaign and immersion in elite diagnoses of poverty narrows his view of other worlds that are possible.

From Hughes’s standpoint, as for many of his confreres in the house of neoliberalism, the devolution of labor standards is a force of nature. Much the same refrain routinely issued from the Obama administration and the 2016 Clinton campaign. Precarity is a natural result of technological progress and globalization, this line of thinking holds. To thrive, individuals need to augment their “human capital,” be ready to relocate, be willing to undergo retraining, be willing to change jobs six and seven times over the course of their lives. If workers accommodate themselves to the necessities of “markets,” then markets will work.

One feature of the economy of work-that-doesn’t-pay is the growth of monopoly. At one point Hughes alludes to four companies that control the internet (one of which is you-know-who), but otherwise he rolls right past the implications of burgeoning employer power over the terms that bosses can enforce in the labor markets.

The neoliberal view of market naturalism glosses over the reality that “markets” are in point of fact, largely constructed by government. The nature of markets is a policy choice arising from politics. Markets are plastic; they can be molded to our preferences, or to those of the “one percent.” After all, the Obama administration decided not to break up the big banks after the blowout of 2007-2008, when any rudimentary grasp of laissez-faire dogma would have dictated downsizing them to the point at which they could, indeed, fail.

Hughes’s new peers have given us a result that offends him, but when it comes to engaging the unlovely social forces that produced that result, he is like the fish who don’t know what water is. He speaks often of the vast accumulation and concentration of wealth, but his interest in taxing wealth is as an option to finance his limited income guarantee. The unearned political sway of the super-rich really commends an energetic approach to mountain-top removal of the wealth pyramid.

If you don’t mind a little policy talk, we can end with a closer look at Hughes’s income initiative. This might, among other things, dispel some of ways in which Hughes himself unwittingly undermines his own case.

First, Hughes’s income guarantee seems to morph as the book goes on. At the start it’s like the UBI, which is to say an unconditional cash grant. Then he alludes vaguely to some kind of work requirement, where “work” is defined very broadly to include caring for relatives or attending college. Finally, he settles on augmenting the Earned Income Tax Credit—a favorite, though limited, measure to mitigate inequality among neoliberal policy hands.

All this definitional confusion opens on to the second, more substantive problem with the Hughes plan: it turns out that Hughes’s $6,000 per person is actually much less than he cracks it up to be. To begin with, it would be offset by the existing EITC, which can currently provide as much as $6,000 per family in some circumstances. In other words, if your existing EITC was $6,100, his program would provide $100. In addition, the EITC is a family benefit—meaning that family labor compensation is added up to determine the benefit. Under Hughes’s set-up, heavy redesign of the EITC would be called for.

Hughes’s work requirement is likewise gauzy. If I worked one month a year, do I get the $6,000? If not, how would it work? How would work be defined, and how would you defend that politically?

To be sure, it’s a little unfair to subject a book like this to a wonk’s analysis; Fair Shot is clearly intended to be an opening salvo in a discussion of government-based remediation of rampaging inequality, and not a detailed set of policy prescriptions. Still, the fact is that the proposal as outlined is very far from fully baked. The work I did on a proposed expansion of the EITC was better elaborated, if I do say so myself. It ended up in separate legislative proposals by Rep. Dennis Kucinich (D-OH) and Rahm Emanuel (D-IL). There are ways to expand the EITC, but a perfected EITC remains inadequate as a national income guarantee. Too many people are likely to fall through the cracks of Hughes’s work requirement. For one reason or another, many people will end up not working much, or at all.

More to the point is a negative income tax that fills the gap in our existing system of income guarantees. We already have income guarantees for retirees (Social Security Old Age Insurance), disabled workers (Social Security Disability Insurance), the survivors of deceased workers (Social Security Survivors Insurance), the indigent elderly (Supplemental Security Income), the employed (the EITC), and families with children (Temporary Assistance for Needy Families,  or TANF).

In this roster of income supports for economically precarious populations, TANF is the weakest link. It is the only cash benefit for able-bodied adults, conditional on them having children and living in a state that makes use of the federal grant. TANF was the replacement for Aid to Families with Dependent Children under Bill Clinton’s welfare reform. It’s been a wretched failure and badly needs a makeover.

Besides bolstering all the programs named above, which are already up and running and working, the quest for a guaranteed income really ought to rest on reversing the TANF debacle and instituting a new negative income tax. A new negative-income tax with a minimum benefit would support families whose able-bodied adults are unable to find and keep work. It would be higher for those with children, but not limited to them. It would plug the largest hole in our safety net. In addition, the institution of a job guarantee would be a vital, foundational element of income security, one that would complement an expanded EITC.

Evidently, Hughes’s own service in the 2008 Obama campaign and immersion in elite diagnoses of poverty narrows his view of other worlds that are possible. The problem is not that his proposal is unambitious. Personal circumstances have obliged him to take abrupt notice of inequality, but he has yet to rethink the issue in any sustained way.

Max B. Sawicky is an economist and writer in Virginia. He runs MaxSpeak.Net and co-edits ThePopulist.Buzz.

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