16 October 2019

He won’t win, but Andrew Yang’s policies deserve a hearing

By

Much of the focus during the Democratic Party Presidential Primaries has been on the three frontrunners of Joe Biden, Elizabeth Warren, and Bernie Sanders.

Andrew Yang has had to battle for attention, though he has gained some ground thanks in part to a savvy social media campaign and the help of his very enthusiastic supporters. Yang is, unfortunately, unlikely to win his party’s nomination. Nevertheless, he has many excellent policies which politicians in both the US and the UK would do well to adopt.

His best known proposal is the ‘Freedom Dividend’, in which every household would receive $1000 every month. This is essentially a form of universal basic income and should be given serious consideration. Although many arguments for a UBI are driven by misplaced fears about massive job losses caused by automation, the policy still has real merit.

Although Universal Credit has gone some way to simplifying the welfare system in the UK, it still remains complex and requires an army of civil servants to administer it. What is more, it often fails in its function as a safety net, with too many people being failed by the system and falling into poverty due to the time taken to process payments.

A UBI would solve many of these problems. Giving everybody over a certain age enough money to live on each month, no strings attached, would provide a true safety net for people and free up the civil servants at DWP and job centres around the country to do something more productive with their time. It could also help to improve the UK’s sluggish productivity by allowing people to acquire new skills or to find a role which is a good fit for their current skill set, rather than the current system which effectively forces people to take the first job that comes along.

It could be economically and socially beneficial in other ways. For example, a guaranteed income could encourage entrepreneurs to launch new products and services which disrupt old ones, benefiting consumers. It could also allow people to undertake more charitable and volunteer work and also take on caring responsibilities, reducing the burden on public services.

No doubt many people would object to such a policy, claiming that people would become shiftless, or simply spend the money on alcohol, cigarettes, and drugs. However, there is very little evidence to suggest that cash transfers lead to decreases in unemployment or an uptake in consumption of demerit goods.

One might also object to the idea of the very wealthy receiving money from the government. However, it should be remembered that this money would be clawed back through the tax system, and so would be of no benefit to them.

Another excellent Yang proposal is to decriminalise cannabis and opioids. This has a great many sound arguments in its favour.

There is the moral case for reform: the State has no right to dictate what somebody does with their own body and to deprive them of their freedom for doing so. There is also a case to be made for harm reduction. A legalised and regulated market for drugs will ensure that drug users will know exactly what they are taking and how much of it, thereby reducing the likelihood of overdosing.

It would also bring huge savings for the public finances as burdens would be removed from the health service and the criminal justice system. For example, just legalising cannabis has the potential to bring in savings of almost £900 million each year.

People struggling with drug addiction should be offered the help they need, not left to languish in a prison cell. This approach would free up police time and ensure that addicts receive medical treatment which will help them to recover.

A related policy is to reduce mass incarceration. This is obviously a major problem in the US, which imprisons a higher proportion of its citizens than any other country. What is more, it is ethnic minorities who are disproportionately impacted by this. Although not as bad as the US, prisons in the UK are overcrowded and out of control.

Decriminalising drugs would be a good first step in reducing the prison population. However, we can go further. The government needs to scrap many of the laws which criminalise trivial offences. Ideally we’d reach a point where the State restricted itself to protecting individuals from force, theft, and fraud.

There are also some policies which might seem quite niche or not that important but would actually make a positive difference. For example, extending Daylight Saving Time would make a huge difference. I have previously argued on this site that the UK should adopt such a policy. Instead of putting our clocks back an hour every October we should just leave them as they are. This will lead to people exercising more and spending more money in shops, restaurants, and pubs. It will reduce crime and also be good for international trade. Keeping British Summer Time all year round will lead to fewer accidents and even save lives.

Another example would be the proposal to scrap the one cent coin. The UK should adopt this policy and get rid of one and two pence coins. Not only are they practically worthless, there are other costs associated with them. For example, they are expensive to produce. The Royal Mint refuses to answer freedom of information requests regarding how much it costs taxpayers.

However, in the US it costs more money to make the coins than they are worth, so it is reasonable to assume that it is the same in the UK. They are also a burden on banks and businesses who have to spend time counting them. Although fears have been raised that abolishing 1p and 2p coins would increase inflation, the research suggests that it would not have a significant impact on prices.

Not all of Yang’s policies are good. He is far too pessimistic about automation, AI, and the future of work. What is more, his proposals for taxes on financial transactions would be a mistake. However, many of his policies are interesting and workable and should be seriously considered on both sides of the pond.

CapX depends on the generosity of its readers. If you value what we do, please consider making a donation.

Donate

Recurring Payment

Thanks for your support

Something went wrong

An error occured, but no error message was recieved.

Please try again, or if problems persist, contact us with the above error message. We apologise for the inconvenience.

Ben Ramanauskas is a research economist at Oxford University