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who really stands to win from universal basic income by nathan heller
500 minimmum, 1000 maximum essay due tonight. instructions in files below

A Critic at Large July 9 & 16, 2018 Issue

Who Really Stands to Win from
Universal Basic Income?
It has enthusiasts on both the left and the right. Maybe thats the giveaway.

July 2, 2018

By Nathan Heller

I

n 1795, a group of magistrates gathered in the English village of
Speenhamland to try to solve a social crisis brought on by the rising price

of grain. The challenge was an increase in poverty, even among the employed.
The social system at the time, which came to be known as Elizabethan Poor
Law, divided indigent adults into three groups: those who could work, those
who could not, and thosethe idle poorwho seemed not to want to. The
able and disabled received work or aid through local parishes. The idle poor
were forced into labor or rounded up and beaten for being bums. As grain
prices increased, the parishes became overwhelmed with supplicants.
Terrorizing idle people turned into a vast, unmanageable task.

The magistrates at Speenhamland devised a way of offering families measured
help. Household incomes were topped up to cover the cost of living. A man
got enough to buy three gallon loaves a week (about eight and a half pounds
of bread), plus a loaf and a half for every other member of his household. This
meant that a couple with three children could bring home the equivalent of
more than twenty-five pounds a weeka lot of bread. The plan let men
receive a living wage by working for small payments or by not working at all.

Economics is at heart a narrative art, a frame across which data points are
woven into stories about how the world should work. As the Speenhamland
system took hold and spread across England, it turned into a parable of
caution. The population nearly doubled. Thomas Malthus posited that the
poverty subsidies allowed couples to rear families before their actual earnings
allowed it. His contemporary David Ricardo complained that the
Speenhamland model was a prosperity drain, inviting imprudence, by
offering it a portion of the wages of prudence and industry. Karl Marx
attacked the system years later, in Das Kapital, suggesting that it had kept
labor wages low, while Karl Polanyi, the economic historian, cast
Speenhamland as the original sin of industrial capitalism, making lower
classes irrelevant to the labor market just as new production mechanisms were
being built. When the Speenhamland system ended, in 1834, people were
plunged into a labor machine in which they had no role or say. The
commission that repealed the system replaced it with Dickensian workhouses
a corrective, at the opposite extreme, for a program that everyone agreed
had failed.

In 1969, Richard Nixon was preparing a radical new poverty-alleviation
program when an adviser sent him a memo of material about the
Speenhamland experiment. The story freaked Nixon out in a way that only
Nixon could be freaked out, and although his specific anxiety was allayed,
related concerns lingered. According to Daniel P. Moynihan, another Nixon
adviser, who, in 1973, published a book about the effort, Speenhamland was
the beginning of a push that led the Presidents program, the Family
Assistance Plan, toward a work requirementan element that he had not
included until then.

Nixon had originally intended that every poor family of four in America with
zero income would receive sixteen hundred dollars a year (the equivalent of
about eleven thousand dollars today), plus food stamps; the supplement would
fade out as earnings increased. He sought to be the President to lift the lower
classes. The plan died in the Senate, under both Republican and Democratic
opposition, and the only thing to survive was Nixons late-breaking,
Speenhamland-inspired fear of being seen to indulge the idle poor. By the
end of his Administration, a previously obscure concept called moral hazard
the idea that people behave more profligately when theyre shielded from
consequenceshad become a guiding doctrine of the right. A work
requirement stuck around, first in the earned-income tax credit, and then in
Bill Clintons welfare reforms. The core of Nixons planwhat Moynihan, in
The Politics of a Guaranteed Income, called a quantum leap in social
policywas buried among his more flamboyant flops.

Recently, a resurrection has occurred. Guaranteed income, reconceived as
basic income, is gaining support across the spectrum, from libertarians to
labor leaders. Some see the system as a clean, crisp way of replacing gnarled
government bureaucracy. Others view it as a stay against harsh economic
pressures now on the horizon. The questions that surround it are the same
ones that Nixon faced half a century ago. Will the public stand for such a bold
measureand, if so, could it ever work?

Give People Money: How a Universal Basic Income Would End Poverty,
Revolutionize Work, and Remake the World (Crown), by the economic

journalist Annie Lowrey, is the latest book to argue that a program in this
family is a sane solution to the eras socioeconomic woes. Lowrey is a policy
person. She is interested in working from the concept down. The way things
are is really the way we choose for them to be, she writes. Her
conscientiously reported book assesses the widespread effects that money and
a bit of hope could buy.

A universal basic income, or U.B.I., is a fixed income that every adultrich or
poor, working or idleautomatically receives from government. Unlike
todays means-tested or earned benefits, payments are usually the same size,
and arrive without request. Depending on who designs a given system, they
might replace all existing governmental assistance programs or complement
them, as a wider safety net. A UBI is a lesson and an ideal, not just an
economic policy, Lowrey writes. The ideal is that a society, as a first priority,
should look out for its peoples survival; the lesson is that possibly it can do so
without unequal redistributive plans.

People generally have a visceral reaction to the idea of a universal basic
income. For many, a government check to boost good times or to guard
against starvation in bad ones seems like an obviously humane measure.
Others find such payments monstrous, a model of waste and unearned
rewards. In principle, a government fixes the basic income at a level to allow
subsistence but also to encourage enterprise and effort for the enjoyment of
more prosperity. In the U.S., its supporters generally propose a figure
somewhere around a thousand dollars a month: enough to live onsomewhere
in America, at leastbut not nearly enough to live on well.

Recent interest in U.B.I. has been
widespread but wary. Last year, Finland
launched a pilot version of basic income; this
spring, the government decided not to
extend the program beyond this year,
signalling doubt. Other trials continue. Pilots
have run in Canada, the Netherlands,
Scotland, and Iran. Since 2017, the startup
incubator Y Combinator has funded a

multiyear pilot in Oakland, California. The municipal government of
Stockton, an ag-industrial city east of San Francisco, is about to test a
program that gives low-income residents five hundred dollars a month. Last
year, Stanford launched a Basic Income Lab to pursue, as it were, basic
research.

One cause of the programs especial popularity in Northern California is also
a reason for the urgency of its appeal: it is a futurist reply to the darker side of
technological efficiency. Robots, we are told, will drive us from our jobs. The
more this happens, the more existing workforce safety nets will be strained. In
Raising the Floor: How a Universal Basic Income Can Renew Our
Economy and Rebuild the American Dream (2016), the labor leader Andy
Stern nominates U.B.I. as the right response to technological unemployment.
Stern, a lifetime labor guy, is a former president of the two-million-member
Service Employees International Union. But he thinks that the rise of robots
and the general gig-ification of jobs will marginalize the role of collective
bargaining, so he has made a strategic turn to prepare for a disempowered
working class. You go into an Apple store and you see the future, he quotes
an economist saying. The future of the labor force is all in those smart
college-educated people with the T-shirts whose job is to be a retail clerk.
(This presumes that people will frequent brick-and-mortar shops in the first
place.)

T

A

By Lowreys assessment, the existing system would falter and fail if
confronted with vast inequality and tidal waves of joblessness. But is a U.B.I.
fiscally sustainable? Its unclear. Lowrey runs many numbers but declines to
pin most of them down. She thinks a U.B.I. in the United States should be a
thousand dollars monthly. This means $3.9 trillion a year, close to the current
expenditure of the entire federal government. To pay, Lowrey proposes new
taxes on income, carbon, estates, pollution, and the like. But she is also
curiously sanguine about costs, on the premise that few major initiatives
balance out on the federal books: The Bush tax cuts were not paid for. The
wars in Iraq and Afghanistan were not paid for. When the country wants to
launch a big project, she insists, the double joints and stretchy tendons of a
giant, globalized economy come into play.

This open planning wont exactly soothe the cautious. A big reason for
chariness with a U.B.I. is that, so far, the program lives in peoples heads,
untried on a national scale. Then again, by the same mark, the model couldnt
be called under-thunk. The academic counterpart to Lowreys journalistic
book is Philippe Van Parijs and Yannick Vanderborghts recent Basic
Income: A Radical Proposal for a Free Society and a Sane Economy
(Harvard), a meticulously comprehensive, frequently persuasive accounting of
U.B.I.s superiority by measures economic, philosophical, and pragmatic. Like
Lowrey, they see basic income as a sound social program and a corrective
hope: not a perfect system, but better than anything else.

raditionally, a challenge for means-tested aid is that it must determine
who is most deservinga vestige of the old Elizabethan system. Often,

theres a moralizing edge. Current programs, Lowrey points out, favor the
working poor over the jobless. Race or racism plays into the way that certain
policies are shaped, and bureaucratic requirements for getting help can be
arcane and onerously cumulative. Who will certify the employee status of a
guy whos living on the streets? How can you get disability aid if you cant
afford the doctor who will certify you as disabled? With a universal income,
just deserts dont seem at issue. Everybody gets a basic chance.

Observers often are squeamish about that proposition. Junkies, alcoholics,
scam artists: Do we really want to hand these people monthly checks? In
2010, a team of researchers began giving two-hundred-dollar payments to
addicts and criminals in Liberian slums. The researchers found that the
money, far from being squandered on vice, went largely to subsistence and
legitimate enterprise. Such results, echoed in other studies, suggest that some
of the most beneficial applications of a U.B.I. may be in struggling economies
abroad.

Like many students of the strategy, Lowrey points to Kenya, where she
reported on a U.B.I. pilot in a small village. (She wont say which, for fear of
making it a target for thievesa concern worth counting as significant.) The
pilot is run by a nonprofit called GiveDirectly, and is heavily funded through
Silicon Valley; in that respect, its a study in effective philanthropy, not a new
model of society. But the results are encouraging. Before GiveDirectly sent
everyone the equivalent of twenty-two U.S. dollars a month (delivered
through a mobile app), Village X had dirt roads, no home electricity, and what
Lowrey genteelly calls an open defecation model for some families. Now, by
her account, the village is a bubbling pot of enterprise, as residents whose days
used to be about survival save, budget, and plan. (The payments will continue
until 2028.)

A widow tells her, Ill deal with three things first urgently: the pit latrine that
I need to construct, the part of my house that has been damaged by termites,
and the livestock pen that needs reinforcement, so the hyena gets nothing
from me on his prowls. A heavy-drinking deadbeat buys a motorbike for a
taxi business, sells soap, buys two cows, and opens a barbershop. His work
income quadruples. He boasts to Lowrey of his new life.

Purely as a kind of foreign aid, Lowrey suggests, a basic income is better than
donated goods (boxes of shoes, mosquito nets), because cash can go to any
use. The Indian governments chief economic adviser tells her that, with a
U.B.I. of about a hundred U.S. dollars a year, India, where a third of the
worlds extreme poor live, could bring its poverty rates from twenty-two per
cent to less than one per cent. Those figures are stunning. But India is in the
midst of major bureaucratic change. Would there be any chance of a U.B.I.
finding a foothold in the entrenched U.S. political climate?

VIDEO FROM THE NEW YORKER

How the Coronavirus Is Affecting New York Citys Food-Supply Chain

dvocates have noted that the idea, generally formulated, has bipartisan
support. Charles Murray, the conservative welfare critic, was an early

enthusiast. His book In Our Hands: A Plan to Replace the Welfare State
(2006) called for a U.B.I. of ten thousand dollars a year, plus catastrophic
health insurance, to replace existing social programs, including Social Security.
Rather than fester for years under the mismanaging claws of Big
Government, he thought, money could flow directly to individual recipients.
The UBI lowers the rate of involuntary poverty to zero for everyone who has
any capacity to work or any capacity to get along with other people, Murray
declared.

But although politically dissimilar people may support a U.B.I., the reasons
for their support differ, and so do the ways they set the numbers. A rising
group of thinkers on the left, including David Graeber and Nick Srnicek, tout
a generous version of U.B.I. both as a safety net and as a way to free people
from lives spent rowing overmanaged corporate galleons. Business centrists
and Silicon Valley types appreciate it as a way to manage industry side effects
such as low labor costs and the displacement of workers by apps and A.I.
without impeding growth. In The War on Normal People: The Truth About
Americas Disappearing Jobs and Why Universal Basic Income Is Our
Future (Hachette), Andrew Yang, the Venture for America founder who has
already filed for Presidential candidacy in 2020, recommends the model as a
way to bypass kludgy governmental systems. He imagines it paired with
something he calls human capitalism. For example, a journalist who
uncovered a particular source of waste, an artist who beautified a city, or a
hacker who strengthened our power grid could be rewarded with Social
Credits, he explains. Most of the technologists and young people I know
would be beyond pumped to work on these problems.

Many of the super-rich are also super-pumped about the universal basic
income. Elon Musk has said it will be necessary. Sir Richard Branson speaks
of the sense of self-esteem that universal basic income could provide to
people. Whats the appeal for the plutocracy? For one thing, the system offers
a hard budget line: you set the income figure, press start, go home. No new
programs, no new rules. It also alleviates moral debt: because there is a floor
for everyone, the wealthy can feel less guilt as they gain more wealth. Finally,
the U.B.I. fits with a certain idea of meritocracy. If everybody gets a strong
boost off the blocks, the winners of the economic racethe ultra-affluent
can believe that they got there by their industry or acumen. Of course the very
rich appreciate the U.B.I.; it dovetails with a narrative that casts their wealth
as a reward.

A

F

notable exception is Chris Hughes, who, in Fair Shot: Rethinking
Inequality and How We Earn (St. Martins), seeks to shed the idea that

special skills brought him success. Hughes, who is helping to fund the
Stockton U.B.I. experiment, was part of the dorm-room crew that founded
Facebook. By his late twenties, when the company went public, he was worth
around five hundred million dollars. Before the I.P.O., he worked for Barack
Obamas first Presidential campaign; afterward, he bought a majority stake in
The New Republic, mismanaged it so brazenly as to prompt a huge staff
exodus, then sold it. Hes forthright about his failures, and hes diffident about
his putative triumphs. Fair Shot tells an interesting success story, because its
author has doubts about how he succeeded. Its Charlie and the Chocolate
Factory if Charlie said Why me? and Wonka shrugged.

Hughess book is divided between policy and memoir. When he was growing
up, in suburban North Carolina, he writes, his mom clipped coupons and he
went to an after-school program with mostly nonwhite kids. He dreamed of a
bigger life, and applied to top high schools. Andover offered financial aid, but
not enough. He called up its admissions office and pleaded for more. Once
there, Hughes felt poor, and sought validation in schoolwork. This led him to
Harvard, where he ended up rooming with three guys he didnt know too well,
including Mark Zuckerberg.

Hughes had no technical knowledge. But he was there when Facebook was
being set up, and he could talk and write, so he was put in charge of its early
P.R. On graduating, he found himself leading Facebooks communications
and marketing and watching venture capitalists invest jaw-dropping sums. It
bemused him. I didnt feel like some kind of genius, and while Mark was
smart and talented, so were many of the other people I went to college with,
he writes.

Hughes searches for points of exception that explain why he, not someone
else from another middle-middle-class family, ended up with half a billion
dollars and a speaking circuit out of the gate. His scramble to get into
Andover, for one thing, seems central. But should the randomness of this
early ambitionwhich, even if it doesnt have to do with resources, does
reflect community information transferreally determine whos in with a
chance? Hughes thinks these individual zaps of opportunity have a large-scale
correlate: the very economic setup that made him and his roommates super-
rich. In a winner-take-all world, a small group of people get outsized returns
as a result of early actions they take, he writes. Massive tech companies such
as Facebook have been possible because of deregulation, financialization, tax
cuts, and lowered tariffs rolled out, he thinks, at a cost to ordinary people
since the nineteen-seventies.

The solution, Hughes has decided, is a
modest basic income: five hundred dollars a
month for every adult in a household making
less than about fifty thousand dollars. He
sees it as a boost to the current system, and
argues that the money can be found by
closing tax exemptions for the ultra-wealthy
people like me.

Six thousand dollars a year is not a lot of
money. But Hughes believes that a light
padding is enough. He describes receiving
his first big payout from Facebooka

hundred thousand dollarsand realizing that if he set aside a five-per-cent
return each year he could count on a lifelong annual income of at least five
thousand dollars, no matter what. It was a little, but it meant a lot. The
further you get from subsistence, the easier it is to ask fundamental questions
like: What do I want, and how do I get it? he writes. The covetable entity
that the Andover kids of his youth possessed wasnt actually wealth. Their
crucial asset was the assurance of choice.

raming basic income in terms of choice, not money, helps to clarify both
its opportunities and its limits. On the immediate level, one might

wonder whether Hughess proposal of five hundred dollars a month is really
enough to boost ones existential swagger. That number, he says, would lift
twenty million people over the poverty line, but any three-hundred-billion-
dollar program should. More to the point are Hughess qualms about a
universal basic incomeor even a lower-middle basic income, like his
replacing means-tested aid. (Trading in benefits earmarked for the poor for a
benefit like guaranteed income, which is designed to provide financial stability
to the middle class and the poor alike, would be regressive, he says.) Why
spray so much money over people doing fine, he wonders, when you could
direct cash as needed?

One answer is that it makes the program palatable to those who cannot
stomach anything resembling government handouts. A wide range of people
stand to benefit from a cushion: any worker with an abusive boss is free to
take the basic wage and leave. By certain measures, in fact, giving everyone a
flat check naturally rebalances opportunities for choice. A thousand bucks
handed to a multimillionaire means almost nothing, but its significant for a
middle-income person, and for a poor person it could open up the world.

Skeptics might point out that what was meant to be a floor can easily become
a ceiling. This was Marxs complaint about Speenhamland: a society with a
basic income has no pressure to pay employees a good wage, because the
bottom constraint, subsistence, has fallen away. We see such an effect already
in the gig economy, where companies pay paltry wages by claiming that their
endeavors are flexible and part-time and that workers surely have subsistence
income from elsewhere.

Supporters of the U.B.I. frequently counter that the raised floor will lift other
things. If workers are no longer compelled to take any available job to put
food on the table, supporters say, work must be worth their while. Certainly,
this will be true for highly undesirable jobs: the latrine cleaner can expect a
pay bump and an engraved pen. But for jobs whose appeal goes beyond the
paycheckin other words, most middle-class jobsthe pressures are less
clear. Competitive, prestigious industries often pay entry- to mid-level
employees meagrely, because they can; ambitious people are so keen for a spot
on the ladder that they accept modest wages. And, since that is an easier
concession for the children and intimates of the moneyed classes, influential
fields can fill up with fancy people. This is not a problem that the U.B.I.
would solve. If anything, paychecks in desirable jobs would be free to shrink
to honorarium size, and choice opportunity would again redound to the rich,
for whom the shrinkage would not mean very much.

In that sense, whats at issue with U.B.I. isnt actually the movement of money
but the privileging of interestsnot who is served but whos best served. An
illuminating parallel is free college. One criticism of Bernie Sanderss no-
tuition plan, in 2016, was that many American families could afford at least
part of a tuition. With no fees to pay, that money would be freed to fund
enrichments: painting lessons, private tutoring, investments, trips to rescue
orphans and pandas, and other things with which well-resourced people set
the groundwork for an upward-spiralling bourgeois life. Especially among the
small subset of colleges that have competitive admissionsthe sector of the
education market which, today, serves most reliably as an elevator toward
class, influence, and long-term employment accessthose who truly have no
cash for college would still be starting from behind. Opportunity would be
better equalized, at least while other things in America remain very unequal,
by meting out financial aid as kids actually need it.

T

Hughes was one such kid, of course, and then he stepped into a jet stream
leading from Harvard Yard to the cover of a business magazine. Now he is
part of the one per cent, which means that his son is seventy-seven times as
likely to end up in the Ivy League as his counterpart from the bottom fifth in
the income distribution. These effects relate to whats often called structural
inequality. Since, his story suggests, they have little to do with the details of
Hughess childhood finances and a lot to do with the decades-long diversion
of profit from workers to shareholders, any program to protect the workforce
in the long term must go deeper than just redisbursing cash or benefits. Such
a solution would need to privilege public interests, not just public awards. It
may even require what many U.B.I. fans hate: a rejiggering of regulation.
Simply lifting the minimum-income level leaves the largest, most defining
foundations of inequality intact.

he realization that a universal basic income is useful but insufficient for
the countrys long-term socioeconomic healththat you cant just wind

up a machine and let it runmay cause attrition among some supporters who
admire the model precisely because it seems to mean that no one will have to
deal with stuff like this again. It may also dampen the schemes sunny political
prospects, since a healthy U.B.I. would have to be seated among other
reforms, the sum of which would not be cost- or interest-neutral. This doesnt
mean that its not a practical idea. It means only that its not a magic spell.

Or perhaps the difference could be split. A couple of years ago, the Dutch
professional thought leader Rutger Bregman championed universal basic
income in his popular book Utopia for Realistsa title that reflects the

Thus far, U.B.I. lives entirely in peoples headsuntried at any major scale. Illustration by Anna
Parini

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volumes tone. Bregman, who studied history, hoped that we could abolish
poverty, border control, and the forty-hour workweek. (He prefers fifteen.) He
pointed out that G.D.P. is a questionable metric of prosperity, since it doesnt
reflect health, clean air, and other attributes that now define First World
success. His interest in a basic income was meant to synthesize the wishful
and the practical; like many supporters, he touted it as a matter of both
categorical principle and maximized good, and tried to make these virtues
square. The effort brought him back to Speenhamland, whose reputation as a
failure Bregman called, flatly, bogus.

According to Bregmans analysis, accounts of Speenhamlands disastrousness
were based on a single report by the commission empowered to replace it. The
report was largely fabricated, Bregman writes. The eras population growth
was attributable not to irresponsible family planning, as Malthus thought, but
to an excess of responsibilitychildren, once they reached working age, were
lucrative earners for a householdplus declining rates of infant mortality.
(Parallel population explosions happened in Ireland and Scotland, where the
Speenhamland system was not in effect.) Wages were low during
Speenhamland, but, the historian Walter I. Trattner has noted, they were
nearly as low before Speenhamland, and the extra falloff followed the
adoption of the mechanical thresher, which obviated an entire class of jobs.

Speenhamland does offer a lesson, in other words, but it is not the one most
widely taught. In The Failed Welfare Revolution (2008), the sociologist
Brian Steensland suggests that, if Nixons Family Assistance Plan had passed,
conservative policy might have evolved along a different path. George H. W.
Bush, then a congressman, supported the guaranteed-income scheme. So did
Donald Rumsfeld. From the late sixties into the seventies, he and Dick
Cheney helped run trials on thirteen hundred families to see how much a
modest financial top-up discouraged them from working. The falloff was
smaller than expected, and the researchers were pleased. We might hope that,
with Speenhamlands false myths finally cleared, the United States will do
better going forward. But our aptitude for managing the future is no stronger
than our skill at making sense out of the past.

Published in the print edition of the July 9 & 16, 2018, issue, with the headline
Take the Money and Run.

Nathan Heller, a staff writer at The New Yorker since 2013, is at
work on a book about the Bay Area.

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https://www.newyorker.com/tag/incomes

https://www.newyorker.com/tag/books

https://www.newyorker.com/video/watch/the-immigrants-deported-to-death-and-violence

https://www.newyorker.com/magazine/reflections

https://www.newyorker.com/magazine/1999/10/18/my-misspent-youth

https://www.newyorker.com/business/currency

https://www.newyorker.com/business/currency/student-debt-revolt-begins

https://www.newyorker.com/magazine/the-financial-page

https://www.newyorker.com/magazine/2016/06/20/why-dont-we-have-universal-basic-income

https://www.newyorker.com/

https://www.facebook.com/newyorker/

https://twitter.com/NewYorker/

https://www.snapchat.com/add/newyorkermag

https://www.youtube.com/user/NewYorkerDotCom/

https://instagram.com/newyorkermag/ American Politics Reading Response Guidelines

Length: 500 words minimum, 1000 word maximum

Format: Single-spaced, 12pt font, 1 inch margins, no title page

Citation style: Chicago Style (find instructions here: https://www.chicagomanualofstyle.org/tools_citationguide.html)

# of citations: You should cite the supplemental reading/podcast, your textbook, and one credible outside source

Submission: Submit via link provided on Canvas within corresponding module

Summary of assignment: A reading response should accomplish two primary things: first,

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