I'm deeply puzzled by Harry Brighouse's laudatory review of Charles Murray's income transfer scheme from In Our Hands. I've written on the book before, both in a review (of sorts) for The New Republic and on this blog. Suffice to say: we are not amused.
The problem with Murray's scheme -- he liquidates the welfare state and instead offers every American a $10,000 annual check, which gets clawed back to $5,000 if you make more than $50,000 -- is that it, uh, wouldn't work. For instance -- Murray requires that you spend $3,000 a year on health insurance. If you start paying that into the system when you're 20, you can negotiate it so your price won't rise when you're 80. One problem: you can't do that. The footnote for this part of the plan is pretty laughable. Murray got the number from the head of Cigna who then admitted that he would never in fact offer such a plan, because who knows what'll happen to health costs down the road. But the entire viability of Murray's plan is based on that guarantee, which doesn't exist. And thus the foundation crumbles...
Nor does The Plan make financial sense. It keeps up with inflation, but isn't changed for cost of living, or needs, or anything else. This will work because Murray believes The Plan will usher in a consumerist utopia that'll force down health costs, cut growth, and convince us to effectively ration care. To be sure, it will do the last -- folks won't be able to afford care, and they won't get it. That is rationing, at least of sorts. But whether Murray simply misunderstands the fundamental drivers of health spending or is ignoring them, The Plan's $10,000 sum would rapidly become inadequate. Lucky thing, then, that it's been ratified into the Constitution, and all other government transfer schemes have been rendered unconstitutional.
That's not to say his proposal lacks any merit. It would be good if we gave all poor folks $10,000 of discretionary cash a year, and better if we forced them to have bank accounts to receive it. But the plan is a massively ineffective -- and inadequate -- replacement for most portions of the entitlement state. Its primary financial proposal, the health care mandate, disintegrates under examination. The money is inefficiently allocated with only the barest feint at progressivity, and there's next to no effort to seriously grapple with coming fiscal realities, the benefits of collective action, or the need for serious risk pooling. I don't understand Harry's level of positivity towards the book, nor his decision to accuse it's left-leaning critics of lacking intellectual seriousness. I'm a fan of basic income guarantees, but not at the expense of necessary functions of the welfare state. Murray is forcing an either/or choice, and serious progressives would be foolish to buy into it. Give me a plan that's $10,000, plus universal health care, funded through transparent means, and ratchets back in a more intelligent way, and we'll talk. As it is, I prize workability, and Murray's proposal doesn't have it.
