The Freedom Dividend
In this post, I want to look Andrew Yang’s Freedom Dividend. As of the writing of this post, Andrew Yang is running to be President of the United States for the Democrats. His key policy proposal is the Freedom Dividend. It is a proposal to give every American over the age of 18 $12,000 a year, with no strings attached. I want to stress that this is not a political post. I will not be examining the feasibility of the Freedom Dividend, nor will I be tackling any of the thorny issues of automation. Instead, I will look more at why the Freedom Dividend is such a clever turn of phrase.
The Freedom Dividend is a “rebranding” of an older concept of the universal basic income or UBI. Yang and his campaign decided on the name after finding it tested well in focus groups. Proof that not all focus groups lead to banal clichés or meaningless slogans. Universal basic income has its place – it is descriptive, but also sanitized and clinical. The “Universal” part is straightforward. It is available to everyone and is not discriminatory. “Basic” is vague but suggests that it is enough to meet some or most of your needs. And we understand “Income,” at least in our modern society, as payment for services rendered (usually as an employee).
So Universal Basic Income is descriptive. But it also has many drawbacks as something to build a political platform around. It is, as with most terms from economics, both descriptive and dull. It is not the kind of phrase that will stir one’s soul. Each of the words serves a purpose in being explicit. But what is useful for communicating an economic idea may not be any good for winning hearts and minds.
We use the word “universal” in many guises. Sometimes it is a noble example like The Universal Declaration of Human Rights. Other times it can be politically volatile, such as with Universal Healthcare. Right or wrong, it carries the baggage of our preconceptions. “Basic” means different things to different people. You risk getting into debates about what constitutes basic. Income can also mislead. We all have implicit understanding of the employer/employee relationship and income. Finally, as an acronym UBI is very close to UTI (Urinary Tract Infection), something which most people are far more familiar with. Silly or not, for most people the initial association is a rather unpleasant one.
Enter the Freedom Dividend. Right off the bat, it is shorter and more memorable. Freedom is a versatile word and has all kinds of connotations in the United States. A $1,000 a month with no strings attached gives you the freedom to choose. You can invest, start a new venture, or rent a bunker for the impending AI apocalypse. It gives you (some) freedom from debt concerns. It strives to have some bi-partisan appeal. The government will only issue you your freedom dividend, how you use (or squander) it is on you. What could be more American than that? There is also the meme-aspect of “freedom”, like “freedom fries”. It’s a little hokey, a little goofy, and a little playful. All things Andrew Yang has embraced on the campaign trail.
The use of the word “dividend” is also interesting. Andrew Yang speaks the language of capitalism, VC’s, and technology. This is not surprising given his history in the startup world. Unlike an income, your relationship is not one of an employee; but as a shareholder in the country. It’s a clever turn of phrase. A company issues a dividend (at least in theory) when they think investors can better invest the capital than the company can. That he uses the language of finance, intentional or not, is a clever little wink. Some are skeptical of any government plan to hand out yet more money. Mr. Yang is very aware of this, often citing Milton Friedman’s support of universal basic income. Though in fairness, Freidman thought of it as a replacement for our current system, not an adjunct to it.
The Freedom Dividend hopes to create a different dynamic between the government and its citizens. We describe traditional welfare programs as a safety net. It is there to catch you when you have stumbled. There is an emphasis on compliance. You must submit your life to examination by the government to ensure you are not cheating the system. This creates a stigma. A stigma further exacerbated by the American penchant towards the Puritan work ethic. The Freedom Dividend (and universal basic income in general) is an attempt to move beyond a punitive way of thinking about the social good.
The critical point of the Freedom Dividend is that it is universal. There is no means testing, no blame allotment, no judgment. As a citizen of the United States of America, you are part of the grand experiment. We the people, and by extension of that the government, trust that you will take your commitment seriously and use it well. It does not matter whether you are rich, poor, down on your luck or recovering from a poor life choice. The fact that it we give it to all American citizens means it is both impartial and free from stigma. It is a certainty that some people will not use the money well – but that is part of its appeal. For traditional (in the mold of John Stuart Mill) liberals, one ought not to take away liberty on account of someone not using it well.
Programs run by the government to deal with social problems is the sine qua non of the progressive moment. Where disagreements arise is from what program to implement, not whether to use a program at all. Not so for those on the other side of the aisle, where they view government intervention with skepticism. A universal basic income in principle ought to be more palatable. The government is handing out checks. As Andrew Yang noted, that is something it is already quite good at (though the thorny issue of how to pay for it remains). But the phrase “universal basic income” might immediately set off alarm bells. For better or worse, the debate over universal healthcare bleeds in. The Freedom Dividend, then, is an attempt to rebrand the idea so people do not reject it out of hand.
You can argue that it is irrational to think that you can make something palatable by changing the way you describe it. But that misses the point that no matter your leaning, we as humans are almost always irrational. We do not notice it in ourselves or those we agree with. One of the curious hallmarks of irrationality is that it is always the other side. That rebranding is such a common practice also suggests that it works rather well. To those outside the circle, it is yet another slogan hoping to catch airtime in a crowded space. To those inside the circle, the Freedom Dividend has implications and meaning. It also has the added benefit of disavowing some of that meaning should it prove expedient.
As of the publishing of this article, the Iowa caucuses for the Democratic Primary of 2020 will have occurred. It may mark the end for Andrew Yang’s quixotic campaign to be the candidate for the Democratic party. It may mark the end of the media calling his campaign quixotic, and he moves into the upper echelon. More likely than not, neither will occur. In the meantime, the Freedom Dividend will continue to trundle along and tie in with the Yang campaign narrative. It is short, sticky and memorable. And like the candidate itself, not afraid to be self-aware or take everything so seriously. Make America Think Harder, indeed.
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