Is it time we adopted a Universal Basic Income?

One of the reasons that Mitt Romney and the Republicans lost Tuesday came down to one simple thing: people like free stuff. No, really. They want politicians to give them free stuff. The 47% comment rings true. It is, as Bastiat said, legal plunder, and people will totes vote for guys who will make sure they’re on the receiving end of the plunder.

Maybe conservatives and libertarians should go for more of this.

Okay, now that you’ve picked yourself up off the floor, having fallen there in shock, or reinflated your forehead, having violently flattened against your desk, hear me out. I’m not suggesting that conservatives and libertarians give up their principled stand for the free market and become socialists. Quite on the contrary, what I suggest has been supported and proposed by no less conservative/libertarian luminaries as Frederich Hayek, Milton Friedman, and Charles Murray.

You can probably see where I’m going with this: I think it’s time we start to seriously discuss the idea of a basic income guarantee. In a nutshell, this would be an annual payout to all citizens, establishing a “floor” of sorts for people’s income. Charles Murray, an intellectual titan residing at the American Enterprise Institute, put this idea into book form in 2006 with In Our Hands. He explained his idea in a publication by the Foundation for Law, Justice, and Society in the UK [PDF]:

To frame the discussion, it is useful to think in terms of a specific proposal. The one I have proposed in a book entitled In Our Hands converts all transfer payments to a single cash payment for everyone aged twenty-one and older (Murray 2006). It would require an amendment to the American Constitution that I am not competent to frame in legal language, but its sense is easy to express: ’Henceforth, federal, state, and local governments shall make no law nor establish any program that provides benefits to some citizens but not to others. All programs currently providing such benefits are to be terminated. The funds formerly allocated to them are to be used instead to provide every citizen with a cash grant beginning at age twenty-one and continuing until death. The annual value of the cash grant at the program’s outset is to be US$10,000.’

This version of a GI, does not involve much bureaucracy, besides the administration of a national identity card attesting to citizenship, establishing eligibility for the GI. The grant itself would be electronically deposited in monthly instalments into a bank account established by the recipient (no bank account, no grant). Earned income has no effect on the grant until it reaches US$25,000. From US$25,000 to US$50,000, surtax is levied that reimburses the grant up to a maximum of US$5000. The surtax is 20 per cent of incremental earned income. The grant is administered for individuals without regard to earned income from other members of the household.

The GI eliminates programmes that are unambiguously transfers — Social Security,  Medicare, Medicaid, welfare programmes, social service programmes, agricultural subsidies, and corporate welfare. It does not apply a strict libertarian definition of transfer, leaving activities such as state-funded education, and funding for transportation infrastructure and the Post Office in place. Services that are required for the operation  of the courts and criminal justice system are also retained. For example, the enforcement of child abuse laws sometimes means that children must be taken from their parents. Doing so requires that the government provide for the well-being of that child through facilities and services.

Part of the program would have to be eliminating all current welfare programs, including all entitlements. This is something the GOP is weak on, alongside military spending; although Republicans constantly call for smaller government, they simultaneously uphold massive amounts of spending for economy-sapping entitlements. Make no mistake, a basic income would cost less than these programs, if only because we would be zapping the huge bureaucracy and overhead needed to manage those programs.

Even Frederich Hayek was in favor of this idea, as Kevin Vallier of Bleeding Heart Libertarians blogged about several months ago:

Let’s consider the relevant passages:

The assurance of a certain minimum income for everyone, or a sort of floor below which nobody need fall even when he is unable to provide for himself, appears not only to be wholly legitimate protection against a risk common to all, but a necessary part of the Great Society in which the individual no longer has specific claims on the members of the particular small group into which he was born (55).*

So Hayek is for a minimum income. This much is clear. But notice the next passage:

It is unfortunate that the endeavor to secure a uniform minimum for all who cannot provide for themselves has become connected with the wholly different aims of securing a ‘just’ distribution of incomes (55).

What? Isn’t the point of the UBI to secure a just distribution of incomes? Isn’t the UBI legitimate because people it is owed to people in order to justify the social order as a whole?

I think Hayek’s critique of social justice does not apply to the evaluation of the rules that govern a society’s basic structure. Instead, Hayek meant to refute the idea that we can make specific claims about whether certain domains of goods and services are justly distributed. An example might be a claim that social justice requires a price floor for coal miner wages. Hayek claims that these practices cannot be evaluated as just or unjust because no one decides that miners should be paid a certain wage. Distributive justice can only apply if we have a decider. As a result, miner wages on the market cannot be the proper subject of evaluation.

But doesn’t Hayek’s argument against social justice therefore apply to evaluations of a society’s basic structure?

The answer seems to be no. Consider the following fascinating passage:

The basic conception of classical liberalism, which alone can make decent and impartial government possible, is that government must regard all people as equal, however unequal they may in fact be, and that in whatever manner the government restrains (or assists) the action of one, so it must, under the same abstract rules, restraint (or assist) the actions of all others. Nobody has special claims on government because he is either rich or poor, beyond the assurance of protection against all violence from anybody and the assurance of a certain flat minimum income if things go wholly wrong. Even to take notice of the factual inequality of individuals and to make this the excuse of any discriminating coercion, is a breach of the basic terms on which free man submits to government (143).

On Hayek’s view, the UBI is required as a condition of democratic legitimacy within the framework of a social contract. I’m not saying Hayek is a social contract theorist, but he sounds like one in this passage. In order for a democratic government to be legitimate it must treat people as equals by imposing only abstract rules on them. Government gives no one special privilege, and this requirement is compatible with providing them with means to secure basic goods and services.

In a New York Times obituary, they talk about Milton Friedman’s idea of a “negative income tax,” which while not the same thing, is similar enough.

I think we need to get back to this idea, and start seriously discussing it on the right, for multiple reasons. One, I think it is far better than the current mess we have now. For one, its not a transfer program; it doesn’t transfer resources from one group to another. It is universal, with everyone receiving the same amount (with some limited exceptions.) It also establishes something akin to a “floor” for people, which establishes a bit of economic security. I’m not going to pretend that $10,000 a year is a lot, but it’s surely better than $0 a year.

Second, it can also help Republicans and conservatives win elections. There’s a lot of people out there who won’t vote Republican because they don’t think Republicans have any interest in helping to take care of them. Well, to be fair, Republicans rightly don’t want government to take care of people from cradle to grave, but there are a lot of pro-poor policies out there that Republicans can and should adopt, and this is one of them. By putting this proposal out there, Republicans can finally push back against Democrats who raise the question “But what about poor people?” And let’s be honest—none of us wants to see people starve on the streets.

Third, if we cut away all that bureaucracy, all that overhead, it might get us several steps closer to doing away with government welfare entirely. A major interest group that prevents programs from being trimmed back are the bureucrats who administer them, and don’t want to lose jobs. That’s why they never, ever actually fix the problems their agency or department is ostensibly formed to fix. By scrapping all of these programs, we’ll have a net reduction in the size of government, and get just that much closer to a libertarian society.

Fourth, there is an argument to be made for this on libertarian grounds. Jessica Flanigan—also, unsurprisingly, of Bleeding Heart Libertarians—made this argument many months ago. And like I said, with the bureaucracy, it would probably shrink the government on net, at least in administration, so I think libertarians can get behind it.

And fifth, I hate to break it to you guys, but in one form or another, the welfare state is here to stay. Yes, we are heading towards a fiscal cliff. Yes, nearly every welfare country is deep in debt and may collapse. But people are not going to turn away from it. To have an economy where there is no safety net whatsoever for the poor violates people’s moral subconscious; they instinctively flinch away from it (unless they’re an Objectivist; if you want to change society to become an Objectivist one, be my guest.) We have to operate within those parameters, and while it definitely sucks, it’s what we’ve been presented. Running away from that and “working” within a fantasyland bubble will not get us anywhere; it will just give us a repeat of 2012.

So far, conservatives and libertarians have been painted as cruel, cold, privileged people who want the poor to just starve. Most of us are completely the opposite, however, and we need to start educating the public on that. This would be a great first step. If we’re going to make any gains, any sort of victories, we’re going to have to change things on this front. We’re going to have to challenge a lot of our assumptions. And we’re going to have to engage on this front. Maybe later, down the road, we’ll be able to eliminate the welfare state entirely. I wish for that day with all my heart and soul. But we’re not there yet. So let’s operate with what we have.

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