This post is part of our symposium on universal basic income.
Modern welfare reforms from both red and blue politicians tend to skew towards the restrictive–adding limitations and replacing cash benefits with vouchers, subsidies, and specific goods that limit recipients’ choices. For instance, in 2018 Trump proposed replacing food stamps with “harvest boxes” in order to promote healthier eating and prevent unauthorized uses. Many moves towards in-kind benefits are motivated by patronizing notions of health, coded fears of fraud or abuse, and ideals of self-sufficiency. In this way, in-kind benefits are often intentional in their ability to control and surveil, especially targeting lower-status means-tested programs such as food stamps, while higher-status benefits like social security are rigorously cash based. This divide demonstrates how in-kind orthodoxy often reflects notions that poor recipients are incapable or irresponsible when it comes to managing their money.
In response, liberal welfare reform advocates have long pushed for cash benefits as liberty enhancing mechanisms. The argument goes that cash benefits, such as Universal Basic Income (UBI), afford recipients the dignity to choose what they need, versus in-kind benefits which paternalistically define that need for them. In fact, in his 2020 presidential bid, Andrew Yang literally called his UBI proposal a “Freedom Dividend.” Cash benefits sound good in this sense. By removing government restrictions on spending, they allow recipients the freedom to consume on their terms. However, this so-called choice is in name only without a guarantee that basic needs will be met. The context of housing provides one example of this. The reality of cash benefits is that even where choice is not restricted by the state, it remains restricted by the failures of the market.
No Choice In Scarcity
Both liberals and conservatives have theorized that the best way to provide housing to low-income to those who can’t afford it is to give them cash, which they could use to obtain housing if they so desire. Cash benefits provide the ability to prioritize where one’s money is spent. Therefore, if families prefer to spend their money on other necessities than housing they are free to do so under this system. From this perspective, the unrestrictedness of cash benefits liberates people in ways that no in-kind benefit could. But this vision falls short; it is impossible to imagine what other needs a family might choose while happily eschewing housing. Thus, this freedom is formal at best.
Yang’s “Freedom Dividends” of $1,000 per month are not enough to afford the average rent in the U.S. Coupled with the weakening of other parts of the welfare state, this vision of UBI would leave recipients with an appearance of expanded choices, but really no better off than they started. Current cash benefit programs for low income folks, such as TANF, are also woefully inadequate. In this way, the focus on the freedom promoted by cash benefits obscures the larger issue that public benefits are just not sufficient to provide for all the needs of their recipients. Cash benefits also do not address other common problems of public benefits such as the bureaucratic disentitlement that prevents many from accessing any form of aid, whatever the form (a truly universal UBI could alleviate this to some extent). All in all, cash benefits are not the solution to the failures of in-kind benefits if all they provide is the choice of what basic needs recipients go without.
Market Failures
Even if cash benefit amounts were increased beyond their current paltry amounts, cash benefits are not the solution they are held out to be. For one, without real forms of rent control or community control of land, an increase in cash benefits may simply incentivize private housing providers to raise rents, effectively cancelling out any positive effects of an increased income. Cash benefits as currently imagined may also serve as nothing more than a safety valve, allowing the tiniest bit of economic pressure to be removed from tenants such that they can continue to participate in and legitimate the commercial housing market, but never truly become free from its ills.
More than this, the preference for cash benefits relies on notions of market-participation through consumption as a key marker of citizenship. And it assumes that more than having good housing, we want to pick our housing, even if the options are terrible. Liberal and conservative theorists have argued that in-kind benefits harm the poor by removing their ability to bargain on the market. This vision puts far too much faith in the ability of the market to produce the goods needed for the flourishing of all humankind. The fact that cash benefits create demand does not mean that the suppliers will be inclined to provide good housing. The truth is that the speculative real estate market is actually pretty bad at guaranteeing all but the absolute wealthiest renters good housing.
Housing voucher programs, in which the government subsidizes portions of tenants’ rent through direct payments to landlords, provide another example of how poorly suited the market is to actually provide necessities for all. Perverse combinations of in-kind and cash, housing vouchers often leave recipients unable to find housing and contribute to housing discrimination.
Public housing is often lambasted as an example of the government’s inability to provide goods as well as private entities, thus justifying programs like housing vouchers, if not outright cash. While some criticisms are more honest than others, when it comes to public housing, we need not throw the baby out with the bathwater. The solution isn’t to abandon public housing. Instead,we should double down on the direct provision of well maintained, beautiful housing that promotes flourishing for all, instead of fighting for such outcomes to come from the private sector.
In this way, there is a plain leftist argument in favor of in-kind housing benefits. And there seems to be a consensus at least among broad swaths of the left that this is the right choice. Even where the public benefits system is not implicated, leftists housing projects such as Community Land Trusts demonstrate a drive away from market solutions to in-kind solutions. Directly providing people housing prioritizes communitarian values of ensuring that everyone is cared for over the strawman of market freedom. It recognizes that the ideal of choice upon which justifications of cash benefits rely is a fallacy when the cash is not sufficient to obtain necessities and when the market fails to even produce those necessities. It also imagines that by taking housing off the market, other priorities can come to the forefront. For instance, in the COVID-19 pandemic, HUD has encouraged public housing agencies to retroactively adjust rents such that tenants do not owe more than they can pay. Tenants of private housing cannot expect any such option.
More than just ensuring housing for all, a return to public housing also signifies the collapse of the increasingly powerful and parasitic real estate industry, disincentivizing displacement through gentrification and the hoarding of land for profit.
Complexities of Need
This logic extends beyond housing, as other forms of direct provision of needs also seem preferable. Medicare For All is another easy example of a recent leftist drive for in-kind provisions of benefits. The same reasons come to the forefront, the disempowerment of predatory insurance companies and the assurance that needs will be met for all.
As this vision continues to expand, it gets more complicated. While it may be attractive to say “just give people what they need,” there are real questions that arise from such a promising statement.
The question about what comprises a human “need” is not an easy one. There are many things that may seem like necessities for some but not for others. While some argue that internet access is a necessity, others contend that computers are luxuries. And generally, those who decide what is a necessity are influenced by norms informed by class, race, gender, and sexuality. Therefore, there is a real risk that in attempting to ensure that everyone gets enough through direct provision, some may get too little, or the wrong things. A way out might be to provide so many in-kind benefits that nobody would be left lacking, but not only does this seem impossible, it seems unethical in the midst of a climate crisis fueled in part by vast overproduction.
There is no perfect solution to this problem. Cash benefits generally leave recipients with impossible choices, and vulnerable to the whims and pitfalls of the market. A resurgence of in-kind benefits would provide new opportunities for collectivized resources and the guarantees of basic needs, but those needs are not so easily defined. The answer probably lies somewhere between a flexible and adaptive administrative state that is actually accountable to the needs of all people (won through persistent and powerful social movements) and outside the state completely in the form of community care.
