Michael Eliason has a great piece (hosted at David Roberts’ substack) describing the kind of experiments with the urban built environment that are common in parts of Europe but unheard of the in United States. Eliason writes:

It should be noted that these developments are largely the result of urban planning competitions. This is in stark contrast to the US, where we incorporate little to no urban planning and essentially let the market drive development, with no forethought to livability, open space, schools, walkability, and so forth.

Citizen participation is also a major component of these projects. Unlike in the US, this participation isn’t a wasteful exercise whereby local homeowners get to block new homes and preserve the status quo. Rather, these processes allow residents to have a say in what their new district can look like, where things should be located, and what kinds of open space or car-free areas it will have. It is true democratic planning, facilitated by spatial planning policies that are both top-down and bottom-up. We should probably take note.

Eliason describes the development of whole districts, while in the United States we are caught in trench warfare over piecemeal infill, waging a conflict that has foolishly polarized into “YIMBYs vs NIMBYs”. It’s great that progress has been made towards legalizing ADUs and polyplexes among the single-family homes. Not everything has been futility. But ultimately activism framed in terms of righteous conflict against greedy homeowners is a political mistake. The characterization is not accurate, and even if it were, car and parking dependent homeowners in the contemporary United States are too large and well enfranchised an interest to be simply defeated. They have to be coopted. Their support, or at least acquiescence, has to be won somehow.

Otherwise, the pace of any progress will remain dangerously detached from the urgency of the problems that derive from insufficient housing. With abundant housing in quality communities, we would have much less homelessness, despair, madness, and crime. Even if the politics were better, creating infill housing quickly is hard, physically and in terms of social equities. Infill is retrofit, limiting the scope of “forethought to livability, open space, schools, walkability, and so forth”. To address housing scarcity deliberately and at scale, the unit of work should not be individual buildings, but neighborhoods, districts, quarters, “new towns“.

But in the United States, don’t new towns just become Levittown or Columbia, Maryland — car-centric, shopping-mall centered, suburban sprawl? By default, yes they do. If you let the market do its thing, the national homebuilders will build out tracts of cul-de-sacs and detached homes in their sleep, hardly even noticing what they’ve done. The “market” is a local optimizer, a risk-averse creature of habit. Even under the best of circumstances the market would build too little, given the asymmetry of social costs of housing scarcity versus overabundance. We want more experimentation than the market would provide, and as Eliason points out, we want planning during which future residents exercise a meaningful franchise. The United States used to be a site of utopian experiments. It ought to be again. We’ll need activist government, some form of social housing, in order to make that happen. But what form should that take?

“Social housing” codes left, and trading NIMBY/YIMBY gridlock for left-right culture-war gridlock sounds unhelpful. Would it be possible to design some form of social housing that would accommodate concerns of the cultural right while providing bulk, credibly non-dystopian housing in the form of walkable, transit-connected, mixed-use development? Yes, I think so.

The basic idea would be this: What if the government committed to financing “microcities”. These would be high density exurban developments, subject to constraints including a minimum population size and, importantly, a requirement that the entire city be built within walking distance of a central transit station. There would be just a single glorified bus stop, for an area roughly one and a half square miles, housing between thirty and eighty thousand people.

In the United States, microcities would be located where the good lord intended us to live: along interstate highways. However, there would be almost no automative access within the microcity (with exceptions for commercial deliveries and disabled service). The microcity itself would be pedestrianized. Frequent express bus service would connect each microcity to traditional cities nearby, key employers, and to other microcities. An interface to private automobiles would sit only at the edge (or perhaps beneath) the microcity. Residents who wish to own cars could, but at a walk away. However, given the sociable convenience of pedestrian commerce and the existence of online discount stores, residents would not need private cars for everyday living. For nearish outings, transit and ridesharing would suffice. For infrequent longer trips, car rental could replace car ownership.

If the microcities are designed well, parking would be used less by residents than by neighboring exurbanites, for whom new microcities would be an amenity. It is already the case that developers build “main streets” or “town centers” with restaurants, retail, and entertainment in America’s exurbs. What if instead of faking it, we built what actually are main streets, designed to support fine-grained street-level urbanism, with a residential clientele large enough to support that? Microcities transform exurbs into near suburbs of new, thoughtfully designed urban centers, without upsetting the character of the exurbs themselves or threatening existing residents.

Microcities complement, rather than seeking to alter, displace, or shame, the approach to comfortable living that has predominated in the United States since the muscle car and the GI bill. They also compete with that approach, not by damning segregated suburbanites and forcing them to change, but by offering as options ways of living that are more appealing and at least as affordable, but also more integrated and sustainable. Microcities don’t ask anyone to eat their vegetables. They don’t demand existing neighborhoods acquiesce to changes to which residents don’t consent in the name of a greater good. Microcities are things that we can just build, at will, a bit more thoughtfully, a bit more carefully, but as ultimately as readily as another tract of cul-de-sacs. We should build them like we built shopping malls in the 1980s.

Microcities also compete with “superstar cities”, whose price and exclusiveness have soared for lack of elastically supplied alternate suppliers of employer-proximal urban amenity. San Francisco’s homeowners — which is to say, San Francisco’s political class — won’t consent to disruptive change in the name of undercutting their own home values. They’ll resist risking the stability of neighborhoods they love in order to make room outsiders clamoring to live there. [*] What might drive greater tolerance of development in superstar cities is not higher home values (current values are way more than high enough to entice developers, absent regulatory barriers), but the threat of lower home values, if living there came to seem not so special any more. A San Francisco whose high home values depended on quality of urban amenities, rather than mere scarcity, would build more rather than less. That San Francisco’s Pacific beachfront is developed with nothing more appealing than a four-lane highway is a reflection of the same forces Lily Tomlin mocked about the phone company in 1976. “We don’t care, we don’t have to.”

But would microcities work? I mean, in the United States, “social housing” is a nice name for “public housing” whose other name is “the projects” whose other name is hell. Traditional public housing in the US had two characteristics. One is it was extremely dense, as an economic efficiency. The other is it was reserved almost entirely for the poor. That was and would still be a toxic combination. However much or little it is the fault of the poor themselves, social pathology often correlates with poverty in liberal, unequal societies. Urban density can be a force magnifier. It can turn what might otherwise have been nice neighborhoods into vibrant, creative centers, or what might otherwise have been stagnant neighborhoods into sites of crime and violence. Microcities should be mixed income housing, and include attractive upscale options as well as inexpensive apartments. In order for microcities to do any good for anyone, they must first and foremost succeed as urban communities that deliver desirable housing at scale and so reduce pressure on home prices throughout their region. Building de novo cities is a capital-intensive risky business, which is why the private sector on its own won’t deliver them. A wise public sector will use the tools at its disposal to rig outcomes, to skew the landscape towards Red Vienna, away from Cabrini-Green.

But the state’s reputation for wisdom is pretty spotty. It’s one thing to talk about artful urban planning, top-down design of prerequisites for what, in its details, must succeed or fail via chaotic bottom-up processes. It’s hard to imagine the self-dealing to-and-fro of state and Federal legislative processes actually delivering smart urbanism.

However, among things government can do are set goals, define constraints, and write checks. Microcities should be a Federal initiative, balancing funds availability across the states as necessary to win political support. It should then rely upon local formations of people who commit to become long-term residents to manage the process through milestones from conception through construction. The model would be urban cohousing or baugruppen, but at a larger scale. Each microcity would begin as a nonprofit development company whose employees include professionals with competences relevant to city building, whose compensation would consist of cash salaries augmented with free, perpetual tenancy or outright ownership (depending on the economic model adopted) of an apartment in the finished city, conditioned on completing a multiyear residency. Besides employed professionals, the development company would also convene a larger group of future residents willing to pay a bond and participate in the planning process, who would also earn discounted ownership or rent conditional on residency for a period of years. Planning processes should favor diversity, experimentation, innovation. Construction quality in the United States is abysmal, compared to the state-of-the-art in Europe and Asia. As Eliason suggests, microcity founders should solicit competitive visions from urban architects and dreamers globally. They should import best practices, and push boundaries of passive, carbon-absorbing, sustainable habitation. Each microcity should be an aspiration, a dream made imperfectly real, a cathedral to the possible improbable, a sketch of that shining city on the hill that we’ve lost in recent times to some tsunami of cynicism.

What about the NIMBYs? Every plot of earth has some stakeholder who demands it stays exactly the way it is, whether due to fear of parking competition or real concern for the local ecosystem. But the square miles adjacent to our interstates are not unspoiled wilderness, NIMBY concerns decay with each mile and highway interchange, and the county-level balance between “homevoters” and the “growth machine” when the scale of growth proposed goes from several million dollars to several billion dollars. Microcity entrepreneurs would have to find sites whose local and state governments would welcome them and help. I don’t think that will be so hard.

But if you build it, would they come? Who would live in these new microcities? The founders, the people who participated in the city’s design and committed to live there, would. But they would be only a fraction of the city’s desired population. Leaving things to the market, potential residents might fear failure, vacancy and blight, and that fear could become self-fulfilling.

So, don’t leave things to the market. In addition to founders, once the city is built the state should offer heavily subsidized ownership or tenure in the new city until a critical degree of occupancy is achieved. This might take the form of Singapore-style housing assistance for younger people on the cusp of household formation, or regional lotteries to encourage a more representative and age-diverse population for the new city. The subsidies should be sufficiently generous that, in combination with the amenities of the appealingly designed new cities and proximity by transit to important elsewheres, many people find the offer difficult to refuse.

Would microcities be affordable? Yes, despite the sticker shock of billions of Federal expenditure, which, after subsidies, would be only partially or very slowly recouped from sales or rents of residences and commercial space. Microcities look very expensive as standalone initiatives. But consider the social costs of housing scarcity, from delayed household formation to mass homelessness, crime, overdose, and incarceration. The financial costs associated with failing to address these problems, for government at every level, are not small. Now compare the cost of adding housing for 30,000 people as a microcity versus the cost of doing so via infill housing in prosperous urban cores, taking into account the resources that will inevitably be lost to permitting squabbles and lawsuits, and the need for expensive retrofits of existing infrastructure. Greenfield development is a cheaper, faster, surer way of adding housing to metro areas than building new housing where market actors would on their own strive to place it.

To be sure, this lower overall price tag would hit the public purse, while the higher price tag of grinding infill through the opposition of neighborhoods falls upon developers and the residents that they battle. In a narrow way, the state saves money by letting private parties engage in their war of attrition. But the state’s interest should be in accomplishing the task at the lowest real resource cost, not in avoiding visible expenditures on public balance sheets. And the state’s interest very definitely lies in actually accomplishing the task of housing humans in a (much better than) functional built environment, quickly and surely.

Microcities are also arguably better urbanism for the age of the automobile than traditional contiguous cities. A great city is a collection of great neighborhoods, and neighborhood greatness emerges at pedestrian scale. But one cannot pedestrianize a whole metropolis. Everything about automotive convenience, from expressways to parking, is destructive of urban quality of life. The typical American city includes a few lovely “microcities” isolated in a sea of ugly car-centered quasicity, bound by a mix of expressways and commercial “arteries” cluttered with parking lots and strip malls.

With microcities, we reimagine the contemporary city as an archipelago of almost arcologies in an exurban sea, with point-to-point transit connections between. Like The City & The City, the urban core and traditional exurb coexist in the same space, with well-defined interfaces between. Mixed-use pedestrian density and leafy, car-centered suburbs each have their appeal, but the neither/nor compromise that now constitutes much of the American cityscape satisfies no one.

Macro-level pathologies — economic precarity, housing scarcity regionally and nationally, pervasive availability of opiates and methamphetamine, pervasive availability of firearms — push local government towards negative-sum, tacitly brutal, competition to establish and sustain themselves as islands of segregation from the prevailing dystopia. Small communities usually fail but sometimes succeed. Large cities cannot simply insulate themselves from macro-level pathology. Citizens demand “solutions” to problems that a municipality simply cannot solve on its own. The predictable result is within-city segregation (sustained by authoritarian policing) that renders life materially tolerable for the affluent and well enfranchised, combined with a performative politics whose function is to render the affluent and well enfranchised tolerable to themselves. Housing issues in this kind of city are existential, as the affluent threaten to displace (“gentrify”) communities tacitly ghettoized, or ghettoized communities threaten to break the segregation and strip the affluent of their insulation. Urban politics becomes neurotic in the strict psychoanalytic sense. The id knows what it needs, the superego insists this is wrong, politicians’ role as ego is to repress and paper over the conflict.

Microcities would face the same macro pathologies as other cities, but a Federally coordinated, actually effective, initiative to make housing abundant nationwide is our only hope of remedying those pathologies. By virtue of compact geographies, within-city segregation would be off the table for microcities, demanding an actually functional politics, rather than the mere performance of virtue, to protect the material interests of even affluent residents. Microcities would enfranchise citizens into manageable units for which the trade-offs faced by municipal government might be less cacophonous and more tractable than those plaguing larger cities.

Individually, each microcity might be utopian, but in aggregate networked microcities constitute a pragmatic counter to contemporary dystopia, a solution tailored to augment and improve rather than rage against the existing built environment, with the constraints, political as well as physical, that our past choices do impose.

There is this notion, proclaimed on all sides of the political spectrum, that if you want to solve a problem, the first step is to name it, center it, because only then can you properly address it. It sounds very rational, very modern. To address a problem, list it on the clipboard. Then we can get together and devise the 19-step plan that will remedy it.

This is often counterproductive for social problems, where the names that we demand be given have connotations that are far from neutral.

From 9/11 through the Obama era, Republican constituencies were scolding us we had to publicly name and call out “radical Islamic terrorism” as a problem, the enemy. Beginning in 2016, Democratic-aligned constituencies demanded that we center and call out “racism” and “white supremacy”. That continues, with a litany that includes “patriarchy” and “transphobia”, wrapped in a bowtie under the unobjectionably objectionable name “hate”. Now Republican-aligned constituencies demand that we publicly call out illiberal “wokism” and activist/academic movements like “critical race theory”.

I’ll try to put this gently, so as not to commit the same error I am criticizing. This approach to politics is unhelpful. The things partisans demand we call out can in fact be bad. All terrorisms, defined as violence or threat of violence against innocents to compel political change, are bad. Nearly all of us agree that racism, white supremacy, and “hate” are horrible. Even the “wokest” people will cop to existence of excesses in social justice activism, though they may argue that cynical overstatement of those excesses is a bigger problem than the excesses themselves.

We are asked to name, and then to publicly call out, problems not because there is some insight gained in the naming. What, we didn’t realize that racism was appalling before contemporary anti-racisms put it front and center? Was the Obama administration unaware of the existence of Islamic terrorism while it was drone assassinating weddings in the Middle East?

We are asked to name and denounce because some coalitions are better immunized, while other coalitions are put on the defensive, when public debate is structured around certain names. The Democratic Party’s coalition includes religious minorities, including Muslims, who are not terrorists but whose social networks and religious traditions are more proximate to groups that prosecuted atrocities in the name of Islam than the white Christians who overwhelmingly define the Republican Party. When we are naming white supremacy, the shoe is on the other foot. The point of this politics is to polarize in a way that gives one coalition the high ground, and sows division in the other while portraying them as apologists for evil.

There may be some electoral value to this, in the sense of persuading a sliver of swing voters or drawing habitual nonvoters into your great moral struggle. The polarization it provokes “usefully” helps stabilize partisan gerrymanders. It is emotionally delicious, as we grunt in our tribes, to hold up mirrors through which we are awesome and they are not. While naming problems and demanding denunciations may move some people to vote your way, it may entrench others and undermine your purported cause. A virtue weaponized ceases to be a virtue at all, and those who might be tarnished by association often perceive demands to denounce even things that they concede are bad as attacks. Because defiance of unjust coercion is itself a virtue, insistent calls to denounce may instead rally sympathy or support. When Republicans call out “critical race theory”, does that render progressives more or less supportive of social justice activism, whatever its excesses?

However things actually shake out at election time, whether demanding denunciations helps or hurts either party, the tactic reliably delivers revenue to media and political institutions. You can’t fundraise off quietly persuading a reasonable but mistaken public. When there are monsters to battle, partisans shower champions with cash.

If you are actually interested in constructive social change, this is a terrible politics. Durable change does not in fact come from crushing a near-equally-matched social enemy. It comes from cooptation until the rump social enemy is small, and can then be cleanly defeated. Gay marriage is no longer controversial in the United States, because the broad public was pretty quietly won over before the Supreme Court delivered a final victory. If the political parties had remained actively polarized around the issue, if nonsupporters strongly identified as objectors, there would have been no victory. An (unlikely) Supreme Court win would have become a new Roe vs Wade, a battle cry rather than a final outcome. The campaign for gay marriage was waged in favor of a solution, rather than as a fight against homophobia, which might have polarized the public into factions more or less implicated by the charge. It was a campaign for something that like most things, most people had never taken a strong position on, and could be content to accommodate what seemed kind without ever having to admit defeat or prior error.

You can’t coopt people while you are calling them out. You can’t achieve durable victories — win the peace rather than a continuing war — without bringing people into what becomes a broad consensus. When it’s the 99% against the 1%, you can crush the opposition. When it’s the 52% against the 48%, you can’t. If you try you get civil war, hot or cold. Both sides in every civil war are sure they have God and justice on their side while they destroy first the prerequisites of civilized life, then lives directly. At home as abroad, the real struggle is always for hearts and minds. The rest is just carnage.

Naming problems and demanding denunciations hardens the battle lines, digs trenches. Making everybody confess the people’s enemy is not a rational path to positive change. On the contrary, what reason demands is a politics that welcomes and improves the imperfect but well-intentioned creatures that we nearly all of us are, a politics that is generous with redemption rather than fierce with judgment of our fellows. By all means, hold policymakers (and pundits!) to account. But never publics. That’s a fool’s errand. Offer solutions and be grateful towards people who sign on, rather than name problems and condemn people for insufficient zeal in demanding their extirpation.

A straightforward objection to the style of policy I proposed as “market dirigisme” in the previous post is that it’s too expensive for the central government to pay to subsidize all the behavior it wants from the public. As Peter Dorman writes in the comments

With so many objectives to pursue, if policy mainly took the form of bribery — excuse me, incentives — the state would be overwhelmed. It’s necessary to have negative incentives, taxes, as well as positive ones, feebate systems for instance.

The taxation-based complement of my market dirigisme is just Pigouvian taxation. Instead of purchasing from the citizenry the behavior the central government desires, the central government can penalize citizens who fail to behave as the central government prefers. That seems “cheaper”, but also meaner and more contentious. People generally don’t mind being offered an opportunity — “Hey! I’ll pay you if you do this thing. You don’t have to, but if it’s worth the money to you you can!” People object vociferously to, and organize politically against, state coercion that takes the form of “You should do this thing, and if you don’t we will punish and fine you.”

So it’s usually politically wise, I think, to prefer the former. Subsidize the behavior you want.

Revenue-motivated taxation should be broad-based and imposed gently on things mostly coded as good (like income). Pigouvian taxes, to be politically sustainable I think, require a strong consensus among the influence-weighted citizenry that the thing to be taxed is “bad”, that people, at an individual level, deserve to be punished or at least to compensate society for the behavior. Matt Yglesias has been talking up alcohol taxes, and that’s probably fine as a Pigouvian tax, because most of us have been persuaded at some level that drinking is a vice and even if we ourselves enjoy it responsibly, it’s fair that we should make some compensation to society for indulging. Gas taxes or carbon taxes are not fine. It is not a vice, at an individual level, for a person to drive to the grocery store or commute to work, even if they live far away. It’s not a vice for a person to live in an exurban or rural place where ordinary life requires long drives. On the contrary, many of us consider rural living an outright virtue. Yes, these choices have social costs, “externalities” in the language of Pigouish economists. But unless those social costs have been pervasively internalized as sin by the broad public (no, your own politically engaged friend group isn’t enough), Pigouvian taxation is “partial equilibrium“. A polity won’t allow large, enfranchised publics to be selectively penalized for behavior they think is fine. Michael Bloomberg can get a soda tax passed maybe in snobby elitist towns whose enfranchised publics look down paternalistically on frequent pop drinkers. But that’s pushing the limits. I’m all for a (refunded!) carbon tax, higher gas taxes, etc. I, um, voted for the proposed soda tax in San Francisco. But, realistically, it’s not a smart approach. You’re not going to save the planet by punishing large, influential blocks of citizens for behavior intrinsic to what they see as legitimate ways of living.

So, what about the expense? Are subsidies to encourage desirable changes by the citizenry affordable? Yes, absolutely. There are two broad points to make here. First, the real cost of such subsidies is lower than it appears. As always, we should be wary of a dollar-for-dollar accounting frame when considering the costs of public policy. Public expenditures are not alike in their effect on price stability, distribution, and other social desiderata. Secondly, to the degree that we are forced to ration net outlays, balancing conditional subsidies with broad-based taxes can be made equivalent to Pigouvian taxes fiscally, while retaining the benefits of relying on subsidy politically.

Subsides of citizen behavior are cheaper than they look for a bunch of reasons. Very narrowly, subsidies are not expenses at all, they are only transfers. They do not directly recruit or put pressure on real resources. To the degree the state is conditioning subsidies in order to “purchase” something from the public, that isn’t quite right, but usually the behavior that will be purchased displaces minimal alternative uses of real resources, or even increases the availability of such resources, making them negative expenditures in a sense.

Let’s unpack that. If the state hires people to build dense housing, that imposes a direct real-resource cost. People who otherwise would do different work are diverted to building these homes. Brick and timber and steel that otherwise would go elsewhere go here. In a broad sense, we can argue that the dense housing net-frees resources, because the people who move in might otherwise have lived in resource-costly exurbs. But that’s a complicated, very contestable, calculation. However, if the state subsidizes people who live in densifying neighborhoods, and the voters in some communities encourage construction they otherwise would have forbidden, very little of the recruitment of real resources should be attributed to the state. The people the state pays with its subsidy are not hired away from their old jobs or withdrawn from the labor market. The choices about which real resources will be recruited and deployed to the now popular densification will remain with the local governments, communities, and developers, displacing their own alternative uses. Mostly what will have happened is we’ll have (i) gotten the policy outcome we might have wanted but failed to achieve if we tried to induce local governments to change their laws despite the resistance of their citizenry; and (ii) made a very-broad based, rather than targeted, transfer to citizens of that community.

In distributional terms, broad based-transfers are often scored as “expensive” relative to counterfactual programs targeting the needy (although when the cost of attrition is taken into account, they shouldn’t be). But relative to ordinary expenditures, broad-based transfers are desirably progressive. When the government hires a contractor to do something, some of the funds may go to modest wage workers, but lots also go to well-paid professionals or flow through as capital income to business owners. None go to people who are neither investors or workers. Business revenue from government expenditures is distributed like market income generally. To the degree a more egalitarian distribution is desirable, broad-based subsidies are “cheaper” than ordinary expenditure in the sense that they incur less of the social cost that comes with making the rich richer.

Finally, on a per capita basis, broad-based subsidies intended to alter citizen preferences with respect to local governance can be cheap even in accounting terms. Most voters are not rich, a little bit of money can make a big difference relative to the costs and benefits they perceive from local policy and the convenience costs of voting. Often when you want to get something done, you have to purchase things from rich people who control access to scarce resources or capabilities, for whom it takes a lot of money to move the needle. But when the state wants to purchase changes in behavior or political preference from the citizenry, most people are very far from rich, and small amounts of money can go a long way. (The current vaccine lotteries are a great example. The per-person cost of the lotteries is pretty tiny, yet they have seem to be effective.)

However inexpensive subsidies are in the senses I’ve described, in some contexts and for some purposes, fiscal limits in an accounting sense will sometimes bind, politically or institutionally. These cases should be infrequent. Well-arranged governments don’t face purely financial constraints on socially valuable investments, just like firms in a well-arranged financial system can always issue securities to fund high NPV investments. But sometimes, pathologically, firms are subject to hard capital rationing, and sometimes governments may have to tax in order to subsidize. In these cases, you use the ordinary tax system to ensure you have the revenue you will need to purchase changes of behavior from the public, just like any other public expenditure. We have property taxes, income taxes, sales taxes. If we want to pay citizens of neighborhoods that tolerate densification and our expenditures are revenue constrained, we can raise those other taxes. The tax increases should not take the form of matched “pay-fors”. That’s a very bad style of public policy. But financially constrained governments should use the tax system to ensure the revenue they require for public purposes, including purchasing behavior from the general public.

A certain kind of wonk will object and say that this is really dumb. Why tax everybody and pay some people a subsidy when you could more “efficiently” impose the same net financial flows by levying a tax on the people who don’t do what you want?

This is a point I’ve made before and I suspect I will make again. There is social meaning, and political effect, in gross financial flows. An income-tax-financed UBI is not the same thing as a negative income tax even when the net financial effect of the two would be the same. Besides the stuff wonks will deign to recognize (like that paying first and taxing back later ensures more certain and prompt payment to those who will ultimately be entitled), different program forms create different social facts. A UBI informs the public in the straightforward language of cash that we are all together receiving a benefit, for which we are paying according to our means. A negative income tax shouts that the poor get a benefit for being poor that the rich must pay for. How the public understands a policy is part of the policy, inseparable from its effects on behavior, its political sustainability, and its ultimate effectiveness. Gross flows condition the meaning of a policy to the public, in addition to net outcomes.

Sure, increasing general taxes in part to pay for conditional subsidies to the public can be equivalent in net terms to just imposing a conditional tax. But imposing a conditional tax has the social meaning that the payer is being punished or asked to compensate for doing wrong, and is politically unsupportable when influential publics think the taxed behavior is legitimate or virtuous. Offering a subsidy communicates no such judgment. I don’t feel judged by the state for not driving a Tesla, even though had I purchased one, I’d probably have been eligible for some government cash. An offer of a subsidy is a market bid, an opportunity. You can take it or leave it, but the option is no injury. The general schedules of taxes on property, income, and sales are… schedules of taxes that apply broadly to everyone and carry no judgment about the lifestyles or choices of segments of the public. Combining those two elements, a general tax schedule and a lucrative offer, yields an entirely different social animal than a tax targeted and conditioned on behavior, even when from a high level you could argue the net financial flows would be similar.