Fair Shot: Rethinking Inequality and How We Earn – Chris Hughes
Chris Hughes is one of the founders of Facebook. Through his own experience he came to conclude that hard work mixed with a very large measure of pure luck can produce a few ultra-wealthy individuals nearly overnight. He believes that the same forces that made Facebook possible, however, make it harder for everyone else in America to make ends meet. I read this book when it was first published a couple of years ago; I decided to re-visit and reconsider his perspective in light of the our current economic reality.
Since leaving Facebook the author has studied poverty and financial insecurity mitigation programs around the world, especially in underdeveloped countries. He has learned what works and doesn’t work in addressing the issues. He thinks the successful programs he has seen overseas would work equally well if adapted for the US. To that end this book focuses on economic inequality in the US and how he suggests we address it. He has also personally committed to invest all of his own vast wealth during his life time in programs that actually demonstrate significant, effective, and efficient progress in eradicating poverty.
To help Americans who are struggling, Hughes proposes a simple, bold solution: provide a guaranteed income for working people. The source of funds to pay for such a plan is taxation of the wealthiest one percent of Americans. According to the author a guaranteed income is the most powerful tool we have to combat poverty and stabilize America’s middle class. Cash distributed with no strings attached gives people the freedom, dignity, and ability to climb the economic ladder, he says.
The author distinguishes his proposal from universal basis income (UBI) in that in his proposal only working people would be eligible. He does suggest though a broader definition of working people to include unpaid caregivers and adult students. His proposal also includes a gradual phase out as total income rises. Probably the best part of the proposal is that it utilizes and builds on the already existing framework of the Earned Income Tax Credit (EITC).
The final point is that his basic concept is not new, but has been promoted in various forms for decades by both conservatives and liberals. He sites a number of pilot programs, some going on now, testing the efficacy of the approach. Virtually all these programs show the fears that people would not work, but would spend the money on alcohol, gambling, tobacco, or other vices are unfounded. People know best what will improve their lives and that is how they send the money. Getting the political will to implement his proposal is the real problem with the idea. I encourage everyone to read this book and participate in a dialogue about the concept.