A large fraction of the book is basically the history of Facebook, how the author got to know Mark Zuckerberg in college, and how Facebook gradually grew and took over the media sphere. He also goes into detail about his own childhood—he grew up in a middle-class family, but goes out of his way to depict himself as not having had a particularly privileged life. This opening section has little to do with his proposal for a guaranteed income, but seems calculated to cultivate an emotional connection with readers in preparation for making his policy argument. I wasn’t surprised to learn that Hughes was responsible for marketing and communications at Facebook.
Following this, there’s a strong focus on the importance on luck in one’s life. Hughes stresses that it was no just his talents that made him part of Facebook, but mostly just the sheer luck of ending up as Mark Zuckerberg’s roommate. I think his point about luck rings true—I remember how Malcolm Gladwell addressed this issue in his 2008 book Outliers: The Story of Success, but there is a lack of empirical evidence here to support the contention that luck is the primary driving force of success in one’s life.
Indeed, there aren’t any graphs or calculations in the book—unlike, for example, Charles Murray’s similarly-themed In Our Hands: A Plan to Replace the Welfare State, which is full of them. He does address some economic arguments to back up his defense of a guaranteed income from time to time, but mostly it is full of anecdotal examples and appeals to emotion. I found that rather unfortunate and unconvincing, but such arguments might appeal to a lot of people reading about the issue for the first time.
Importantly, Hughes is not an advocate for what is generally meant by a “universal basic income” (UBI). Instead of proposals like the one by Murray, he does not want to introduce a UBI that would replace the welfare state. He argues that such a UBI would be too expensive and how his solution is cheaper—an additional $500 a month for every working American with an annual income below $50,000, including caregivers and students—but given that all of this would be established on top of the current U.S. welfare state, I doubt it would be cheaper. He argues that we should not replace something that is “working,” even though the U.S. has the second largest welfare state in the world, per capita, while still being incredibly ineffective.
Hughes relies heavily on the largely unsupported assumption that most Americans receiving social benefits would be worse off if the welfare state was replaced with direct cash through a UBI. His proposal would be financed by taxing those with an income over $250,000 at about 50%, which according to Hughes was their “historic tax rate” and something we should return to. I find it strange how he keeps saying that people like him, the rich, should pay for this guaranteed income, but ignores the effect on regular doctors, lawyers, and small business owners. Many of the latter have an income above $250,000, especially when one considers total household income. He also seems unaware of (or at least declines to engage with) the issue of the marriage penalty, which his proposal would increase, as the New York Times review of Fair Shot pointed out.
His defense for keeping the existing welfare state with its multiple targeted benefit programs is especially strange because he devotes an entire chapter to the fact that generally, people do better with direct cash handouts instead of specific aid, like programs that allow individual donors to give a goat to a family living in a developing country. He cites several studies and experiences by effective altruist groups like GiveDirectly to back this up, yet he is opposed to establishing a similarly transparent system of cash transfers in the U.S. That doesn’t make sense—and again, it seems as if he is appealing mainly to emotions here. His argument is that replacing the existing welfare state just “feels” wrong and we should follow the calls of historical figures like Martin Luther King, Jr. who advocated an expansion of the welfare programs. Related to that, there’s lots of praise for the Progressive era and the social reforms introduced during that time.
But what bothered me most was a statement on economic growth and poverty he kept making throughout the book. Without backing it up, he kept saying how people who become extremely rich through starting companies like Facebook make it harder for lower-class people to attain wealth. I kept waiting for an explanation, data—anything on this dubious statement, to no avail. It seems as if he assumes that the economy is a stagnant pie and if some people attain lots of wealth, they cut away a large portion, leaving less for others. In more specific terms, this is an economic misconception called “The Fallacy of Static Wealth” and its twin fallacy, “The Fallacy of The Zero-Sum Game”. These fallacies are guided by the mercantilist idea that the sum of wealth is constant. Thus, a few people becoming extremely rich by starting successful tech companies inevitably makes it harder for others to attain wealth, since there is just less of it left.
This is quite a juvenile view of economics, as memorably debunked by Adam Smith. Smith underlined how wealth is not something static, like a lump of gold, but rather consists of goods and services that can be created. He observed that if someone agrees to pay for a service in a market economy, both people taking part in the exchange improve their previous position. The value of the given good is not a magical number out of nowhere, but rather indicative of the appraisal and desire of the interested buyers in the transaction.
I tried to approach Fair Shot with a charitably attitude, but I wasn’t very impressed. In the end, it is comprised of lots of anecdotal fluff, appeals to emotions, logical inconsistencies, and a lack of data.