Freedom Dividend & Ditching The GDP?

An Interview With Presidential Candidate Andrew Yang

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freedom dividend

Ten days after the midterm election, Andrew Yang gathered a group of about forty people, mostly college students and active community members, in Iowa City, Iowa, to discuss the 2020 presidential election. Yang one of six Democrats already declared, and maybe the most active one so far. He’s spent the second most money, behind John Delaney, who announced last year, and he’s appeared at Iowa state Democrat functions and held rallies across the country. I had the chance to sit down with him after his rally and discuss his lengthy platform.

One thing that was clear about Yang is that he is intelligent, articulate, and has done his homework. His website has his views on 73 different issues and policy proposals. He could talk in depth on just about all of them. The biggest piece of his platform is his idea for a Universal Basic Income, which he calls a “freedom dividend,” but it isn’t the only idea he’s trying to bring to the forefront of political discussion. He also wants to modernize the metric for national success, which is currently the Gross Domestic Product, and provide an alternate currency for community involvement. Make no mistakes, he’s not a libertarian. But he has interesting ideas that merit discussion.

If I was a Democrat and could only have five candidates to choose from, I’d want Yang to be one. His ideas are new and different, and still boldly progressive. He’s a genuine, intelligent, and well-spoken man. And if I was a Trump supporter and wanted a sure victory, I would not want Andrew Yang to be nominated. That is not to say that Trump couldn’t defeat Yang (his ideas are fringe, and UBI is largely untested anywhere, let alone in the US), but it wouldn’t be as sure as facing Elizabeth Warren or Cory Booker, polarizing politicians with a wealth of public exposure to pick at. Instead, Yang is the opposite of Trump, without picking up the incredible baggage of a career politician. He also is focusing on solutions for the swing-state voters who handed Trump the 2016 victories, who were largely blue collar.

The following is a transcript of an interview between Andrew Yang and myself. It has been edited for length and clarity.

 

Bartholomew: So to start off, for those who are unfamiliar, who are you, and why are you running for President?

Yang: I’m Andrew Yang, and I’m running for president in 2020 because I’m convinced that we’re going through the greatest economic and technological shift in human history, and our government and leaders are asleep at the switch. So, I’m running to modernize our economy, which includes a “freedom dividend” of $1,000 per American citizen, adult, per month.

B: And, I guess, what’s more of your background? What did you do for a living?

Y: Sure, so I’m a serial entrepreneur, I’ve started several companies, I was the CEO of an education company that grew to become #1 in the United States and was acquired by a public company in 2009, and then after that I started an organization called Venture for America to help train hundreds of entrepreneurs around the country to create thousands of jobs. And so I spent seven years doing that, and during that time, I realized that we’re automating away the most common jobs in the economy. We started with 4 million manufacturing jobs, around the country, over the last 15 years, and we’re about to do the same thing to retail workers, call center workers, truck drivers, and so that’s why I’m running for president: to wake us up to the reality of what’s happening around us, and also to implement meaningful solutions that would strengthen our society.

B: Why are you the best candidate to defeat Donald Trump?

Y: Well, the opposite of Donald Trump is an Asian man who likes math, and I’m running to solve the problem that got Donald Trump elected, which unfortunately most politicians do not seem to understand or be focused on. So, that’s why I’m the best candidate to defeat Donald Trump. He actually said at a rally last month that he’s excited to run against all of the people that are primed to run as Democrats against him and his one worry is that some new figure would come out of nowhere, that people had not heard of, to run against him, and I am his kryptonite. I am Donald Trump’s nemesis.

B: We are only 10 days out from an election, why start so early?

Y: I’m relatively new, most people haven’t heard of me, so I need the time to introduce myself to people and get them excited about what we can do as a society and an economy if we get our acts together.

B: To shift gears a little bit, back to the basis of your platform, do you have a philosophy, and who are some people who have influenced you?

Y: I certainly studied many of the thinkers during my education, because I studied economics and political science, with a dash of philosophy in college, and I did go to law school so there is a little bit of that sprinkled. So some of the thinkers that influenced me: I think Mill’s idea of utilitarianism really stuck with me, I think Hobbes’s ideas of the state of nature were really powerful and influential. Milton Friedman has been a big influence on me, he’s influenced all of Western economic thought, so he’s someone that I’ve internalized a lot of his thinking. Yeah, so there are a lot of ideas I think I have in common with many libertarians, I believe.

B: Could you put a label on that?

Y: Well, part of is that, is just the reality, and I’m a serial entrepreneur and this is true of many entrepreneurs, is that I think the enemy of humanity is now bureaucracy. I think that the larger an organization gets the more inhuman and irrational it tends to get. And so, I’ve as an entrepreneur started businesses, and when you start, it’s just you, and you’re completely integrated because, you know, you’re incentives are aligned with yourself, and then you start hiring people and you can still maintain alignment and integrity through three, five, ten people, but then when it gets to ten thousand people, it becomes this giant machine where you have tons of processes and staff and departments and everything else, so in terms of my philosophies about this, it’s that we have to try to make it so that we’re all more human, and bureaucracy is really the enemy of that.

B: On the note of philosophy, would you consider yourself a capitalist, or perhaps more fairly, what would you describe as your brand of capitalism?

Y: Yeah, so I think capitalism is responsible for a ton of the progress that we’ve experienced over the last number of decades, but at this point, to quote Eric Weinstein, we did not know that capitalism was going to get eaten by its son, technology, and at this point we need to become both radically capitalist and radically socialist in different arenas, and that in many ways that capitalism and socialism dichotomy is now out-of-date and unproductive and not very useful. So I consider myself a capitalist, but I’m framing it as a human capitalist, and I think that we need to start moving our market towards things that actually benefit us, and that right now, capital efficiency benefits fewer and fewer of us.

B: Would you ascribe yourself more to the Nordic model, where you allow capitalism to grow, and then social democracy to sort of reap the rewards, or more of the East Asian model where capitalism is more confined to certain areas?

Y: Yeah, I think both of those models are very useful and powerful, I think there are a lot of things we can learn from the Nordic countries. Their retraining is actually genuine, they have significant family leave, which I think makes perfect sense as someone who has had children, and in the East Asian model, also, I think has some lessons for us, so I would be for a hybrid of those two.

B: Back to Universal Basic Income, you talked about the Freedom Dividend, a thousand dollars to every American every month, my thought here is that we are going through a technological change but we’ve gone through two major ones in the last half-millennium. We had people, like the Luddites, who did have a great deal of fear there. What makes this different, what makes this fear more realized, because obviously then we saw population booms but we also saw employment booms and we saw new fields emerge. What makes this different?

Y: We just have to look at the numbers, where according to Bain, we’re looking at three to four the times the level of displacement as the last industrial revolution by 2030. And if you look at our labor force participation rate right now, it’s down to 62.9%, in large part because many people have already been displaced in various fields and they did not find new work. They went on disability, they left the workforce, they took drugs, they killed themself. So, if you look at the numbers, there’s no reason to think that this is going to magically align itself, and when people talk about the last industrial revolution, what they tend to forget is that the last industrial revolution brought about the formation of labor unions, brought about mass riots and protests that killed dozens of people and caused billions of dollars worth of damage, inauguration of labor day, implementation of universal high school, this was all the last industrial revolution, so if you think that it’s going to be three to four times faster than that, then you would expect massive unrest, even based upon historical precedent. So there’s no reason to think like, hey, we went through this before. If you look it, yeah, we did go through this before, and it was hellacious, and this is going to be several times more hellacious.

B: As we move back to the libertarian perspective on universal basic income, do you see this replacing welfare programs and the bureaucracy that runs them, or do you see this running largely supplementary?

Y: I see it as largely replacing welfare programs, and the bureaucracy that administers them, and I think that there are many perverse incentives to the current systems. I think that it is infantilizing to many Americans, and I think that it’s even debilitating, because the disability programs, for example, have the perfect incentives to keep you disabled, because if you feel better, then your benefits got to zero. So right now there is a zero percent churn rate from long-term disability, where no one ever feels better. So I’d want to replace a lot of those programs, we have 126 programs right now, it’s like a patchwork, and no one thinks that it’s working well. So the freedom dividend would replace, hopefully, a lot of that, maybe most of it.

B: Could you name specifics?

Y: So the way I’m modeling the freedom dividend is that it’s opt-in, but if you opt in, then you lose any other benefits that you’re getting. So the issue is that because people rely upon different programs for different things, you don’t want to step in and say I’m gonna take it all away from you, because some people are receiving more, some are receiving less, and if they’re relying upon it to that level you could rely destroy someone’s survival mechanism if you were to replace or eliminate programs, so what you do is you say, look, you can make a determination, if you opt in to the freedom dividend, then you lose everything else you’re getting. And you end up substituting for many of those programs because someone would look at it and say, I’m getting $700 worth of food stamps and housing assistance, I’d much prefer a thousand dollars cash. And so then you would end up eliminating many of these programs.

B: We’ve got an $800 billion deficit, the freedom dividend would cost about $2.5 trillion a year, how do we manage that, where’s that money coming from?

Y: So the big change we have to make, is that the big winners of artificial intelligence and big data and autonomous vehicles are going to be the mammoth tech companies, and the mammoth tech companies are great at not paying a lot of taxes, because they will just move it through Ireland or their favorite tax shelter, so we have to join every other advanced economy and have a value-added tax, which would then get the public a sliver of every Amazon transaction or Google search. Because our economy is so massive at $19 trillion now, a value-added tax at even half the European level(1) would generate about $800 billion in new revenue. So that, plus our existing welfare spending(2) which is about $800 billion, which substitutes in for part of the freedom dividend, plus the new tax revenue from growing the consumer economy by 12%, which is about $500 billion, plus cost-savings in our healthcare, incarceration, and homelessness services, and the value gains from having a stronger, healthier, more educated, more mentally-well population ends up balancing out the $2.4 trillion so that it’s deficit neutral.

B: What is the biggest piece of your platform if you had to take UBI out of it?

Y: It’s evolving our economic measurements to include things that are, right now, not included in GDP that are core to the human experience and human well-being, so that’s health, mental health, affordability, like median income, and updating our measurements for the twenty-first century, because we’re in the midst of the biggest measurement problem in the history of the world, and it threatens to destroy us if we don’t get it right.

B: You did mention the digital social credit, you talked about that rewarding things like community activities, like volunteering at a food bank, but also things like this. What difference can the government see between a political rally with somebody with good intentions and new ideas, and a Klan rally? Where does the government ethically have the room to make that decision?

Y: In my opinion, it would not. So the digital social credit would probably be based upon convening people for almost any purpose, and then having people spend a certain amount of time. We’re really just trying to re-integrate the fabric of community, and so we’re not going to judge the reasons for getting together. You could be knitting, you could be reading campfire stories, you could be having a music festival, we’re not gonna judge the quality of the offering.

B: This would certainly require a constitutional amendment, would you include in that amendment that you cannot discriminate on the basis of activity?

Y: I don’t think it would require a constitutional amendment, because all you’re doing is you’re just putting up, like, community incentives for various things, so I don’t see any constitutional obstacle, but I would favor that there is no judgment of the nature of the activity.

B: Do you have an unrestricted view of the first amendment, of freedom of speech, to include hate speech?

Y: I think that our culture has definitely gone too far in trying to police various statements and terms in a way that’s very unproductive, that said I do think that there are limitations to the first amendment that involve, you know, yelling fire in a theatre or directly inciting violence, so there are limitations. To me, some of the more interesting first amendment issues actually revolve around pornography, because I think that, at this point, child access to pornography is a major issue, particularly with the internet, and so I’m less worried about hate speech and more concerned about desensitizing children to various sexual images.

B: One last question, if it comes down to it, and it’s you and Donald Trump, why should a libertarian pick you?

Y: Because I want to genuinely put economic power and freedom into the hands of every American, and as far as I can tell, Donald Trump does not.

 

(1)The average European rate is nearer 20%, which would mean one can double the projections made by the CBO, linked. Of course, that can’t be done exactly, and actual numbers would shift for a 10% tax rate projection.

(2)Because the opt-in nature of his UBI program, people can choose to remain on their welfare. This means that while the cost will go down slightly, the savings will be less from our welfare programs. Thus, his system would benefit from higher enrollment.

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Andrew Bartholomew

Andrew Bartholomew is a politics and election news writer from Iowa City, Iowa. He has previously worked for Young Americans for Liberty and was most recently the political director for a Republican congressional bid.

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