The Corner

Tentatively for Universal Basic Income

Michael Strain, as is only to be expected, does a great job outlining the pros and cons of a universal basic income (UBI) before ultimately coming out against it. I’m not necessarily in favor of a UBI, but I’ve been leaning in that direction ever since reading Charles Murray’s In Our Hands. Even after reading Michael’s piece, I still lean that way, for the following reasons:

  • First, as Charles is at pains to point out, restructuring the welfare state bureaucracy to give everyone the same entitlement would almost certainly not give people enough money to shirk work. It would avoid people starving on the streets, but it wouldn’t enable them to do much more. The truly indolent would not be able to “benefit shop” to collect the levels of income that really annoy people (see the UK’s Benefits Street for a great example of how this is a western world problem). Anyone who wants some creature comforts, which most of poor do (see The Road to Wigan Pier, for example) would be encouraged to work rather than the reverse.
  • Secondly, the evidence I’ve seen from unconditional cash transfer payments suggests that the worries about them being squandered are not realized. Most people will use money to make their lives better. Indeed, there is some evidence that most poor people suddenly presented with what amounts to capital will become capitalists. This is surely a good thing.
  • The lack of a welfare bureaucracy will also encourage charity and mutual aid for the really hard cases. Charity has, all over the world where welfare states rule, been crowded out by bureaucracy. Mutual aid (see Section II of the linked PDF), which probably provided better outcomes for the poor than its welfare state replacements, is all but unknown today. They will have a chance to bloom in a UBI world.
  • Michael’s concerns about the disabled and the like are more appropriately health care questions rather than welfare questions, but i imagine they will be amenable to the same flowering of charity and mutual aid I have just mentioned.

Having said all of that, two big concerns do make me worry about a UBI world:

  • First, unless we were to find some way of exempting this from the political process, politicians would indeed, as Michael suggests, turn it into a UBI plus extra, targeted, welfare system. 
  • Secondly, and this is the big one, it still relies on robbing Peter to pay Paul, even if Peter gets some of the money back. But, as Hayek noted, we may be stuck with such redistribution for “provision for the indigent, unfortunate, and disabled.”

So overall, I’m still leaning in favor of a UBI, with those two big, and possibly irresolvable, caveats.

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